A pricey lesson for State Audit
By Pham Vu in HCMC
In a working session in June last year with President Nguyen Minh Triet, State Audit of Vietnam chief Vuong Dinh Hue laid out a vision for turning his agency into one that is highly responsible and credible, and one that can be relied on to ensure the efficiency of state capital use.
This noble vision has been damaged to some extent since four officials of the State Audit were caught red-handed for taking VND290 million in bribes from a state-funded road project in the central province of Quang Nam last week.
The State Audit had long been known for its integrity, truthfulness, impartiality and independence – the qualities that had helped it discover more than VND56 trillion in illegitimate expenditures by provincial governments and state organizations in 15 years to the end of 2009.
But the four auditors – who were looking into how money was being used in the VND144-billion Di Lang-Tra Trung road project financed by the proceeds from government bond sales – had the above qualities compromised by their failure to resist the temptation of money. They asked the project developer for a total of VND500 million in bribes in return for their silence on their so-called audit conclusions. Quang Ngai Province police even found VND600 million at the rooms at Hung Vuong Hotel in the same province where they were staying.
The scandal has made headlines in local media since it came to light last Saturday, because for the first time since the State Audit of Vietnam’s inception 16 years ago, officials of the country’s highest auditing office have been found to infringe the rules.
This is a real blow to the State Audit’s credibility. “Prior to this regretful incident, people in the state auditing sector were recognized as possessing such qualities as straightforwardness and unbias. But after the event happened, credibility must be restored,” says Saigon Tiep Thi newspaper.
Like other law enforcement agencies, the State Audit has issued a standard auditing procedure and a set of rules for controlling quality of audits and governing operations of auditing teams to ensure laws are strictly adhered to.
The State Audit has a National Assembly Standing Committee-approved privilege of retaining 2% of the total amounts of money found to be illegitimately used as a way to improve auditors’ incomes and thus prevent them from deviations, and Saigon Tiep Thi describes this percentage as hefty given the huge sums used for wrong purposes being discovered so far.
However, the four auditors still squeezed money from contractors involved in the road project in Quang Ngai. The paper casts doubt on whether the prevailing rules are not yet enough and the 2% retained is still small. The paper then points to a study which found that however strict the rules are, there exist loopholes which corrupt officials can exploit to satisfy their greed.
The auditors – Nguyen Van Quyen, Ngo Quang Dang, Nguyen Quang Thanh and Ngo Hong Minh – are paying the price for their corrupt practice as prosecutors in Quang Ngai Province on Wednesday decided to seek legal action against the four.
Di Lang-Tra Trung road might not be the only project in which they had taken bribes as, according to Tuoi Tre, a number of contractors have accused them of blatant bribe-mongering.
Hoang Liem, director of Construction Company 20-7, a contractor in the Di Lang-Tra Trung road project, is quoted by Nguoi Lao Dong as saying that when hearing news that the four auditors would be traveling to Quang Ngai, contractors as an unwritten rule had to raise VND40 million to fund the auditors’ accommodation and personal expenses during their stay in the province.
“We gave the money but a day later the four auditors returned it and threatened to audit the entire (Di Lang-Tra Trung) project,” Liem said, adding that after days of auditing, they informed the contractors that unauthorized expenditures in the project amounted to VND8.3 billion. This tit-for-tat sort of revenge drew criticism from Quang Ngai Province’s road projects management unit.
The contractors sought to strike a problem-solving deal but the auditors demanded a kickback accounting for 10% of the unauthorized expenditures, or VND830 million, says a Tuoi Tre report published on Wednesday. Nonetheless, 18 contractors said they could afford to give VND500 million and the auditors agreed, reports the news website vnexpress.net.
The contractors were able to contribute a combined VND290 million. “We were surprised that when handing the money to them, they showed us a lot of audit conclusions coupled with a threat that they would ‘kill’ Quang Ngai businesses if they did not get all of the promised sum of VND500 million by 2 p.m. on August 14,” Liem is quoted by vnexpress.net.
Other contractors and the project management units of six upland districts of Quang Ngai also accused these auditors of illegitimate auditing practices. Instead of making field trips, the auditors ordered the contractors to bring their project files to a hotel for inspection, says a news report by vnexpress.net.
Contractors involved in Di Lang-Tra Trung road and other projects chose not to compromise with the bribe-mongers, so they informed the police.
This is the saddest scandal in the auditing sector’s history. A police probe into the case is underway but at his meeting with local media last Tuesday, Le Minh Khai, deputy head of the State Audit, expressed regret over the case that has caused the State Audit to lose face because of damage to its credibility. “This is a pain for the entire auditing system, a pricey lesson for auditors and other staff of the State Audit,” said Khai.
The Saigon Times Daily