Paying former presidents to have secretary ‘problematic’

The payment of a ‘personal secretary’ allowance to former presidents and House presidents is problematic, the Audit Office said on Tuesday, even warning that it might report the matter to the anti-corruption authority unless the government takes immediate corrective action.

The government watchdog pressed the issue of ex-presidents and ex-House presidents receiving an allowance to hire a secretary after the finance ministry last week said the practice would continue as is.

The allowance was instituted in 1988 during the administration of the late president Spyros Kyprianou.

In a statement, the Audit Office said some of these former state officials receive the special allowance without actually employing the person whom they declared as their secretary. And in one case, the person declared as a secretary has self-employed status.

Moreover, for former presidents, the secretarial allowance is not taxed as it’s not considered part of their income. By contrast, the same allowance for MPs is taxed as it is considered part of an MP’s income.

So no uniform policy even exists regarding the taxation aspect, noted the auditor-general.

Under the relevant law, as amended in 2005, MPs are entitled to 7,200 Cyprus pounds – or €12,300 – a year in secretarial allowances.

Back in January, the permanent secretary at the finance ministry had informed the auditor-general the following: “The finance ministry has adopted the practice where the beneficiaries of the said allowance are requested once a year to confirm in writing that they continue to employ an individual with the relevant [secretarial] duties.

“We are not in a position to know the earnings of the private secretaries being employed, as the finance ministry does not keep such data on the persons in question, as they are not civil servants.”

Earlier this month, the Audit Office called on the finance ministry to comply with the provisions of the law and stop payment of this allowance where the preconditions for it are not met.

“As for the recovery of amounts already paid out, we expressed the view that for any amounts that ended up with former state officials, instead of with the persons declared as being employed by them, the finance ministry should request the tax receipts.”

The Audit Office also said it would carry out new checks once payments are made to these ex-state officials for the month of April.

“In the event we ascertain that any person has acted in a way that may constitute abuse of power, we shall duly inform the anti-corruption authority.”