Dr. Chandana Jayalath

As we all know, auditing encompasses a wide array of functions. Construction auditing is in particular keen on investigating overcharges if any for labor and materials, overpriced change orders, why and how for re-work, lost incentives and credits, failure to deliver contracted scope and charges for non-allowable costs. Just a couple of failures detrimental in any typical project and is why audit comes into being. Audit is not just looking for cost recoveries or overbillings, but also provides process improvement recommendations for the project management team. In fact, there are several key risk areas that lend themselves to unnecessary costs that effect overall performance. Auditing function is to provide independent and objective assurance that the public money is handled appropriately.

Amongst the benefits are early detection of non-compliance, prevention of abusive behaviors, minimize the I forgot” and lost document syndrome. Detecting frauds and errors along with the identification of misrepresentation of records, check on construction accounting functions with the analysis of bills and records, identifying information gaps and omissions to check accurate management of the accounts, verifying different costs and expenses to ensure their justified investment, and finally reporting on compliance with policy and procedures are fundamental to any auditing function where technicalities have been involved.  Tender invitations and bid proposals, tender addendums, contract amendments, offers and MOUs, contract document, incoming and outgoing correspondence, field notes, field visits, and interview findings, process and procedure manuals, protocols and guidelines, legal and financial instruments, internal logs and inventories, technical and financial reports, risk and contingency reports are a couple of key inputs integral to this important function at all times.

On the foregoing context, the establishment of an Audit Commission in Sri Lanka is indeed a good move, as a result of the 19^th Amendment. This commission has to be responsible for all the auditing in the government at the end of the saga. Although there is mention of a draft act, we are yet to see it.  HE the President said he is ‘worrying’.  At a juncture like this, policy borrowing from other states could at least be most beneficial; for instance, it would be worthwhile to examine and see how the mechanisms of Audit Committees in other countries operate and then apply it to our own circumstances. It is of no harm of visiting what is happening outside our domain at all times. I would say, an inspection of external mechanisms is an important constituency. In the Middle Eastern countries, there are expatriate quantity surveyors who are experts in technical auditing. This is again, hardly anything being discussed in the media about the role of quantity surveyor in technical auditing. At a time where bribery and corruption are facing harsh penalties, the government must also take measures to prevent it from reoccurring, and in that regard, this act will serve as a crucial piece of legislature. Nevertheless, a national audit act without quantity surveyors on board will be a pitfall in the total process. In addition to the protracted delay, I observe, this is a trivial mistake.

Given the large amount of money associated with building projects, the value for money gained by using standardized building information, combined with budgetary control expertise has made quantity surveying an important role within the construction industry. Beyond the main financial-based concerns in a traditional cost-value system, it now encompasses knowledge of costs, values as well as contractual and commercial matters, claims and disputes. In reality, if the predicted cost is exceeded by the actual costs then the viability of the project may vanish, possibly leaving the client bankrupt, the building abandoned and resources wasted, disputes arisen. This is why the importance of deploying qualified quantity surveyors has become so significant than ever since in the history, predominantly in the state sector undertaking large scale foreign funded projects where the funds are generally taken back via ‘loophole’ engineering. For example, the Southern Expressway project experienced a 6.8 Billion Rs claim against then the government and whether this money has been already paid or not to the claimant is not known. With regard to Central Highway, it was heard of an 8 Billion difference in procuring the works according to the way the work packages have been clustered in form of consortiums, when compared to the previous regime. At a time only a handful of politicians struggle over and probing the finance related issues in connection with large scale mega projects, no one can object to this expertise indispensable for speedy resolutions. I am pretty sure that quantity surveying inputs will definitely act in a lubricating manner to ease out the backlog and add a great value in the process of investigations.

It is high time we revealed the bitter truth behind this menace and whose want has been undermining the positioning of quantity surveyors in the state sector, and especially in the function of auditing. I wondered how then FCID righteously protect those who abide the law without them on board. Construction frauds, malpractices, errors and omissions, inaccuracies, inefficiencies and obscurities are typically the cases of a nature that require intellectual skills and complex detection capacity in order to probe and review contracts, analysis, interpret and make judgment. This is, particularly useful when misappropriation of construction of public housing funds has been notorious for the last couple of years.

Bribery Commission is yet another entity where quantity surveying should be a frequent function as long as they are related to construction contract awards, measurement, certification and payment. Though in 1994, the Act no.19 created the Commission to Investigate Allegations of Bribery or Corruption, I could not come across that the function of technical auditing and the forensic delay analysis has been identified to be key functions. I must say, if the intention of the committee is to ensure the compliance of financial discipline in Public Corporations and other Semi Governmental bodies in which the Government of Sri Lanka has a financial stake, there should be professionals in-house equipped with the necessary tools and means to deal with intricate commercial and contractual issues mixed with some technical elements and features.

Committee of public enterprise, known as COPE also consists of 31 Members reflecting the party composition in the House established under the Standing Order 126 at the beginning of each Parliamentary Session. The duty of this Committee is to examine the accounts of the Public Corporations and of any Business Undertaking vested in the Government and have the power to summon before them and question any person, call for and examine any paper, book, record or other documents and to have access to stores and property. While the Public Accounts Committee exercises oversight in the financial performance of Government Institutions, the Committee on Public Enterprises is to ensure the observance of financial discipline in Public Corporations and other Semi Governmental bodies. The duty of the Committee is to report to Parliament on accounts examined, budgets and estimates, financial procedures, performance and management of Corporations and other Government Business Undertakings. Who does them all is a matter of grave concern. Aftermath, the accounts of these organizations are audited by the Auditor-General and form the basis of the investigations of the Committee. It has the power to summon the relevant officials and such other people as it thinks fit to obtain evidence and call for documents. As far as I know, the Auditor General Department has no single graduate or chartered quantity surveyor on board.

In any developed country, in the Gulf region or even in the former Soviet region, they have cadres in the state sector for quantity surveyors, with clearly demarcated job specifications. Quantity Surveyors in these countries have been largely involved in invigilating and investigative functions for government projects. I have not come across such an opportunity in Sri Lanka for these professionals to serve in the state sector and would like to conclude, though unwillingly, any investigation on construction related abuses without quantity surveying experts is a dupe than anything else.

Corruption needs to be seen in terms of the full scale of the human misery that it creates. This essentially warrants a holistic approach; commercial, contractual and technical. Just see how politicians indulge in technical corruptions that simply falling out of intuition by the non-technocrats.