Sunday Times 2
Build audit skills to stop corruption in construction projectsBy A.L.M. Ameer
View(s):It is interesting to read another loss owing to irregularities in state-funded constructions. Not a day passes without some massive loss on state-funded construction projects being reported in the media. The saddening aspect is that these are public funds for which there are mandatory checks and balances in the form of auditing. Wide powers are held by auditors general. The fundamental question is whether these checks and balances have served their intended purpose as we do not hear of any substantial savings or corrective mechanisms for future projects.
In the early days, whenever there was a suspected fraud, the owner would appoint a person to check and hear explanation. A financial accountant is not able to check and explain construction irregularities owing to a lack of construction skills. Construction auditing is performed by accountants with relevant skills.
Global loss owing to fraud of one type or the other in state-funded constructions has reached US$ 4 trillion a year, according to Transparency International. To put in context, this is US$ 7.61 million per minute or US$ 1.50 per day per person in the world. Ironically, more than a billion people live below US$ 1.25 per day, according to the World Bank.
The conclusion is that present day auditing of Government-funding constructions by financial accountants is outdated. Even the introduction of performance auditing for construction in the 1980s did not serve its purpose as there were no standards or measurements.
Even after three decades, we do not have an international standard for how a government project ought to be awarded, let alone others. There must be a global correction mechanism that can be as follows:
- Government construction auditing to be separated from other auditing and to be conducted by trained, accredited construction professionals;
- There must be a post-graduate course in construction auditing for construction professionals;
- There must be a union for such auditors for the purpose of improvement and evolution of standards and measures.
There are adequate qualified and experienced professionals the world over to do the job, both training of auditors and construction auditing. The Global Organisation of Parliamentarians against Corruption (GOPAC) has recognised this in its Position Paper (Volume 1, Issue 7-April 2015). Governments around the world have shown the political will to punish offenders of corruption with recent high profile cases in the United States, Britain, China, Brazil and other countries.
This cannot be done by an individual. A new and proper Government construction auditing mechanism can only be done by powerful international institutions such as the United Nations or World Bank. There is a moral requirement for them to do something urgently because:
- They regularly spend vast sums on constructions, leading to massive losses from fraud;
- They have many powerful, international organizations to tackle poverty alleviation and anti-corruption;
- Realistically, if 15 percent of Government construction fraud can be prevented, poverty can be wiped out from the face of this earth.
- There is a strong possibility that future historians will take note of this as the losses are continuously reaching record levels;
(The writer is a Chartered Surveyor, Arbitrator & Certified Construction Auditor. Ameer561592433@yahoo.com)