Cyprus Mail

Taking away audit chief’s power to look at co-ops would be a step back, MPs hear

Auditor-general Odysseas Michaelides

Approval by parliament of a proposal to take away the auditor-general’s power to scrutinise co-op banks would be a regression in terms of transparency and accountability, MPs heard on Thursday.

“We think the audit is imperative for each one wielding public authority and manages public money, and we believe that it should apply for co-ops,” Auditor-general Odysseas Michaelides said.

Michaelides added that passing a law restricting his department’s reach would be a mistake.

“Such a development would be a mistake because it would convey the message that our Republic, our state, wants to leave people managing public money without any control, a setback in matters of public transparency and accountability,” he said.

Disy leader Averof Neophytou has tabled a proposal by which the auditor-general’s office would no longer be entitled to conduct administrative audits of the Central Co-operative Bank (CCB).

Neophytou had asked the finance ministry to communicate the documents comprising the agreements signed by Cyprus and its international creditors – the Memorandum of Understanding and the Relationship Framework Agreement – to Attorney-general Costas Clerides, as he claimed these contained clauses precluding such auditing.

Clerides has given his okay twice for an audit to go ahead.

Michaelides told MPs on Thursday that even if any EU institution had raised such an issue, it should have been opposed by the government.

However, he said, if parliament adopted the proposal to preclude his service from auditing co-ops, it would be respected.

The issue has been debated for quite a while, amid claims of cronyism that touched the finance minister, Harris Georgiades, has denied the accusations.

The sector has received €1.7b in taxpayer money and was now 99 per cent a state-owned business. Because of this, Michaelides says, it is subject to scrutiny. The CCB, along with three other banks, are supervised by the European Central Bank.

Under the terms of the bailout, the sector had to undergo restructuring, reducing – through merger — the number of independent cooperatives from over 90 to 18.

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