Chiri’s 2019 audit report doctored to protect powerful elites 

Source: Chiri’s 2019 audit report doctored to protect powerful elites – NewsDay Zimbabwe

Alex Magaisa
WHEN Auditor-General (AG) Mildred Chiri recently appeared before Parliament’s Public Accounts Committee (PAC), she was asked why names of companies and individuals had been omitted from her audit report for 2019. There was concern that the report had been censored to remove and protect names of the powerful elite or entities associated with them.

Chiri explained the reason for the omissions

“This [the omission] was done to minimise the risk of potential litigation. There have been comebacks from some of our suppliers in the past. Normally when you name and shame organisations in public documents like our annual reports, you must have evidence that is watertight and sustainable at law,” she told the PAC.

It was the fear of litigation that prevented her from naming and shaming persons who might have been involved in dubious dealings with the State and its entities. If the committee had probed her further on this point, it might have drawn more specific detail from her. This is because her office is currently battling litigation arising from the 2018 audit report which was published in 2019. The AG lost the battle at the High Court, but an appeal was recently heard by the Supreme Court.

A teachable moment: Public power and individual rights
The statement by the AG and this case presents a good opportunity to analyse the rules about the functions of the AG and their impact on the rights, interests and legitimate expectations of individuals and entities that are implicated in her reports. The public audit function is a critical part of the architecture of the modern State. It is the eyes and ears that identify improprieties in the use and management of public funds. The AG is a sentinel against the abuse of public funds and property. As an institution, it can advance and amplify the constitutional values of transparency and accountability.

Nevertheless, the public audit function is also the exercise of public power, and it goes without saying that the exercise of public power must always be carefully watched because of the potential for abuse. The law has in-built mechanisms to minimise the abuse of public power. One of these important mechanisms is called judicial review. It is a principle by which courts of law can intervene and set aside decisions, actions, or omissions in the exercise of public power where other persons demonstrate that their rights, interests and legitimate expectations have been injured.

This article critically analyses the reviewability of the conduct of the AG and its private contractors. The hope is that it will contribute to the construction of guidance for not only the AG, but also other public authorities that perform public functions directly or through private entities. It may also be useful to private entities that are contracted to perform functions of a public nature by public authorities. Finally, it should be useful to individuals and entities that are impacted by the exercise of public functions, either by public authorities or by private entities. To provide context, I will start with a summary of the litigation in which the AG is involved.

The case of Robin Vela and the AG
The case against the AG and its private contractor, BDO Zimbabwe Chartered Accountants was brought in 2019 by the former chairman of National Social Security Authority (Nssa) Robin Vela between July 12 2015 and  March 27 2018. The lawsuit followed the publication of the AG’s 2018 audit report which included findings of a forensic audit report into Nssa’s financial affairs.

The AG had appointed BDO Zimbabwe to carry out a forensic audit of Nssa’s investments. Objections had been raised over the involvement of Ngoni Kudenga, the managing partner of BDO Zimbabwe, based on a previous relationship that had soured and which meant that he could not be impartial and fair in the conduct of the forensic audit. The forensic audit resumed after Kudenga was supposedly cleared. Although the firm said Kudenga had stepped down from the forensic audit, it carried on with the exercise. With hindsight, the AG should have taken a different route once she became aware of the perceptions of bias concerning the firm. The forensic audit report produced by BDO Zimbabwe was adopted by the AG, who proceeded to publish the outcomes in her 2018 audit report which was submitted to Parliament.

Vela took great exception to and was aggrieved by the contents of the forensic audit report which he believed was false, malicious and injured his reputation. In his view, the forensic audit showed a lack of competence, contained false information, and besmirched his reputation grievously. He argued that BDO was not fit to conduct the forensic audit not only because it lacked the professional qualifications to perform that specialised function, but also because it was biased and lacked the impartiality and fairness required for that task.

Normally, an aggrieved person might let the matter go. They might weigh the costs and benefits and conclude that it is irrational to challenge such a report. Litigation comes with risks of unpredictability and costs. You have no control over how courts might rule, even if you are right. Furthermore, there is always a risk of the law of unintended consequences: when legal action that you are pursuing ends up exposing your privacy. Therefore, an applicant who has the proverbial skeletons in the cupboard would be better advised to avoid litigation as that might lead to the revelation of those things that are best kept in the closet. This, at any rate, did not apply to Vela who was so aggrieved by the audit report that he was determined to set the record right. He must have weighed the risks of litigation and concluded that his professional standing and integrity were worth the sacrifice.

Application for a review
Vela filed an application at the High Court for a review of the AG’s audit report as it related to him. He cited the AG in her official capacity as the administrative authority responsible for the forensic audit report which he found offensive and injurious. BDO Zimbabwe was also cited as the contractor that produced the report on the basis that it was carrying out the public function on behalf of the AG. The application was filed in terms of provisions of the Administrative Justice Act (AJA) and the High Court Act (HCA).

Under both the AJA and the HCA[2] an aggrieved person can approach the High Court seeking judicial review and the High Court has the power to review proceedings of lower courts or administrative authorities. Vela was suing the AG as an administrative authority responsible for producing and publishing the audit report. In this case, the forensic audit report had been produced by the AG via a private contractor, BDO Zimbabwe.

Under the HCA a review proceeding may be brought on various grounds. One might argue that the lower court or administrative authority lacked jurisdiction (legal power to handle the matter); that there were gross irregularities in the handling of the matter or that the court or administrative authority was biased, conflicted, malicious, or corrupt. Vela relied on these grounds to challenge the conduct of the forensic audit report.