The problem facing the Audit Service due to the "double hat" of the Attorney General of the Republic, in the sense that he is the legal advisor of the state but also has the authority to bring criminal prosecutions, stated the Auditor General Odysseas Michailidis, speaking of a "hostile environment" from the government.
Informing the parliamentary Finance Committee on the Audit Service's budget for 2023, Mr. Michaelidis even said that he would raise the issue of his dual status Attorney General and the problems raised by the Anti-Corruption Commission of the Council of Europe (GRECO), in the context of the 5th audit of Cyprus, on December 14, during which issues concerning the Audit Service will also be raised.
< p>He also reiterated the need to ensure the independence of the Audit Service in the model of the solution found regarding the budget of the House of Representatives.
Speaking before the committee, Mr. Michailidis recalled that the issue of the financial independence of the Audit Service was raised during the accession process of Cyprus in 2003, but was forgotten after the accession of Cyprus in 2004, while it was also raised in the memorandum of Cyprus with the its creditors during the 2013 crisis.
"We met all the conditions of the memorandum except this one", argued Mr. Michaelidis who, addressing the members of the committee, said that the Parliament "has the courage", meaning the solution found regarding the independence of the Parliament's budget.
"We are not asking to approve him ourselves, but for the Parliament to approve him. What we are saying is that it is not compatible with our independence issues to go to the Government to approve our budget, he said.
In the Parliament, the funds for unfreezing funds for the purchase of services from El. Service
Besides, Mr. Michaelidis said that the Parliament is right to cross the funds regarding the purchase of services from the government, to note, however, that in this context, funds of the Audit Service for the purchase of services are also frozen, with the result that the Service requests from the Ministry of Finance to send a letter to the Finance Committee for their release.
"Put a request for the Audit Service to directly ask the Parliament for a release," he said, clarifying that "we are subject to the control of the Parliament, we want the control of the Parliament».
However, Mr. Michaelidis thanked the Minister of Finance for approving additional positions for the Service and made a special reference to IT control positions.
Everything comes to an end "in a person with two hats"
Mr. Michaelidis referred to a problem faced by the Audit Service due to the status of the Attorney General of the Republic as the legal advisor of the state and as the one with the authority to bring criminal prosecutions.
While the Constitution provides that the Auditor General has access to all evidence, there is the framework law (Fiscal Responsibility Act) and there is also the Audit Service Act, and "it all boils down to a person with two hats in the Attorney General" ?, he said.
He referred to the instructions given by the Attorney General, as the state's legal advisor, to officials not to provide information to the Audit Service, giving examples of the Cyprus Investment Program (CIP) or the plan for Akama, adding that when the Service proceeds with a complaint and then some evidence is given, the Attorney General decides that these persons should not be prosecuted.
He said that the Service's access is guaranteed only to “types” as “ultimately everything is judged by one person”.
Saying that he would raise the issue to the 5th review by the GRECO Commission, Mr Michaelidis added how "we consider that the way our Service operates is affected in this way and a solution must be found in this matter".
The "hostile environment"
In the note submitted to the Parliament, the Audit Service states that it works in a "hostile environment", a report with which MPs, especially the Democratic Alarm, disagreed.
Both speaking before the committee and in his statement after the debate, Mr Michaelidis referred to the reactions of the government after the special audit for the KEP was issued in August 2022. The reaction was completely comparable to that which existed in 2020 and our report was called inadequate, inappropriate and so on, he said, adding that it was attributed to him "acting with political motives".
"And I explained that this obviously shows a hostile environment for our service," he said.
Besides, Mr. Michaelidis suggested to the members of the committee that they re-cross the funds related to the purchase of buildings from the state, as well as the funds for advertisements on television channels.
As he said, "it is a very serious issue that should be subject to parliamentary scrutiny, just like our proposal to cross advertising funds". He noted that the Service's recommendation is for the government to draw up a three-year plan for advertising funds, to be able to vary the amount but not to be able to change the proportion to each channel. "Because this can mean that he can put pressure on a channel to take a favorable line towards the government and that means a blow to the Republic", he said.
To the Anti-Corruption Authority the naturalization case referred to the "Mafia State"
Answering questions from MPs, the Auditor General referred to the KEP and to a specific case of naturalization mentioned in Makarios Drousiotis's book "Mafia State", saying that this person was naturalized in the context of the provision for collective investment. He said that today the Service received a response from the Ministry of the Interior that the specific file was located, adding that when it is examined the Anti-Corruption Authority will be informed.
DISY Member of Parliament Onoufrios Koullas praised the excellent work done by the Audit Service, saying that "for the first time since 1960, a strict control is being carried out and the Audit Service has also been expanded". He expressed reservations about the data on the perception of corruption, saying that the perception of the world in Cyprus is due to the reasons for the stricter controls that are carried out and the increased convictions.
DISY MP Savia Orfanidou disagreed with the report about « “hostile environment”. "You can disagree, but I don't think there is a hostile environment, it is not right to write such things", he said.
AKEL Member of Parliament Andreas Kavkalias adopted the hostile environment, saying that "the government tried to screw up" the findings of the Audit Service regarding the KEP. He also highlighted the benefits for society of the work done by the Audit Service in recent years.Besides, the Member of Parliament of DIKO and chairman of the Commission, Chrysis Pantelidis, congratulated the Audit Service for its work, saying the need for control, transparency and purification, where necessary, is imperative. Responding to Mr. Koullas that it was the first time such strict controls were carried out, Mr. Pantelidis said, among other things, that for the first time we have a naturalization plan, which, based on the investigative committee, gave more illegal than legal naturalizations, for the first time Cyprus was included in the INDOSAI reports, while "for the first time we had the President of the Republic and the Attorney General threatening the auditor general that they will take him to the Supreme Court".
And EDEK Member of Parliament Ilias Myrianthous congratulated the Audit Service for its work, while raising the issue of entrusting the audit of small community councils to private auditors, saying that it creates problems.
DIPA Member of Parliament Alekos Tryfonidis Alekos he said that the recognition of the work of the Audit Service is a given and added that the Service must receive support in order to carry out appropriate audits for the benefit of the citizens.
According to a note submitted to the Commission, the budget of the Service for 2023 concerns a total expenditure of approximately €8 million, compared to approximately €7.3 million in 2022, showing an increase of 10.2%.
The largest proportion of the Service's expenditure (approx. 92%) refers to staff costs which were budgeted at approximately €7.3 million (€6.7 million in 2022).
It is also reported that Cyprus, for the first time since 2004 which joined the EU, host in 2024 the Contact Committee consisting of the heads of the EU Audit Services and the European Court of Auditors.
Source: KYPE
