By Angelos Anastasiou
THE AUDITOR GENERAL’S office has long been considered one of the few bastions of transparency and control in a labyrinthine government structure that is not conducive to promoting accountability.
The job was almost single-handedly catapulted into prominence by the former auditor general and now governor of the Central Bank of Cyprus, Chrystalla Georghadji.
She was appointed auditor general in 1998 and stayed on until earlier this year, when she was picked to succeed the departing CBC governor Panicos Demetriades at arguably the most critical time in the institution’s history.
But choices always carry a cost, and Georghadji’s exit had to be addressed, preferably with someone who could pick up the baton and make the transition virtually seamless. Enter Odysseas F Michaelides, former head of the communications ministry’s internal audit department.
“In the midst of the financial crisis and the public’s sweeping disregard toward all institutions, the audit service was the only one that retained its credibility,” he told the Sunday Mail. “This is undoubtedly testament to Chrystalla Georghadji and her staff who have remained unwavering in their mission to combat corruption and improve the appropriation of public funds.”
Corruption is perceived as being particularly widespread in Cyprus, with one February 2014 survey by the European Commission finding that 92 per cent of Cypriots believe that bribery and employing personal contacts – famously termed ‘rusfeti’ in Cyprus – is the fastest way to get anything done when any branch of government is involved.
“I think the root cause for this is our society’s culture, this viewpoint that if someone’s rule-bending does not affect you directly, it’s not your job to say anything, but mostly it’s the impunity that has allowed corruption to take root over the years,” Michaelides said.
While the auditor general’s respect for his predecessor and the way she did things is obvious, in at least one area the difference in approaches is striking.
In the Georghadji years, the service’s annual reports were media sensations – each was a thick volume that included stunning incidents and scathing criticism of government departments and officials – but the rest of the year was mostly a lull. Under the new regime, the auditor general’s name is on the news a lot more often, so much so that Michaelides has been accused of going after the limelight.
“Transparency is of the utmost importance to our efforts,” he said. “Transparency is corruption’s worst enemy. That is why, barring a serious reason, we routinely notify the House of Representatives, the seat of democracy, of our important issues.”
So that’s where the news stories come from. But more than that, the service is on the news more because, well, it’s doing more.
“We aim to increase the number of instances we bring to light, in terms of our capacity to investigate timely and thoroughly,” Michaelides said. “For this reason, we have decided to outsource the auditing of many organisations and community councils to the private sector, so that we can address the workload backlogs that translated into many organisations going unchecked in the past.”
Tremendous staff shortages have plagued the service for years. It was one of the first issues Michaelides tried to tackle when he took over, but his private-sector solution is sure to cause a political stir.
“We are in contact with the finance minister and we are trying, mostly through secondments, to fill our gaps to the extent possible,” he said. “Further needs will need to be addressed by new appointments, but also the private sector will be handed a lot of auditing work, mainly of community councils, which has remained pending for years.”
The targeting of community councils is just one example of Michaelides’ tenacity. In May, for example, he sent a letter to the attorney general asking why no criminal action had been taken against 15 community councils and leaders suspected of criminal behaviour.
Michaelides made specific mention of the former community leader of Klonari village, who he said in 2013 admitted to embezzling €23,000 and staged a theft by breaking his own car window.
The auditor-general also reported the case of Asomatos community leader, who he said admitted embezzling €83,000, returned €50,000 but has not accounted for the remainder.
Michaelides’ relationship with President Nicos Anastasiades was also noticed by commentators. A few weeks ago he was invited to a scheduled cabinet meeting and instructed by the president to show no mercy. This also found its way to the media, yet further reinforcing the Presidential Palace’s determination to offer the service political cover.
“I have had more contact with the president,” Michaelides said of the incident. “He is always friendly and appears prepared to be fully supportive.”
A good relationship and face time with the boss is always useful, but in order to get there one must rise above the fray, be noticed and get picked. How does one make the leap from the corridors of the communications and works ministry to the audit service’s top floor?
“My name was put on the list of possible successors to Chrystalla Georghadji by political persons who knew me personally due to my previous position and performance at the communications ministry,” he said rather cryptically.
It is perhaps no coincidence that until his appointment as auditor general, he was party-affiliated, party membership and all.
“Immediately after my appointment I informed my party that my conscience does not allow party membership, and asked to be removed,” he said. “Today I have no party affiliation, though I keep myself informed and updated politically. I just keep my opinions to myself now.”
Michaelides defends his team’s integrity and competence fiercely. He pounced at the suggestion that he might be less than happy with their performance, leaving no room for doubt on where he stood.
“Of course I am happy with my staff,” he stressed. “This is a service with a select staff of extremely high professionalism and training. The work people see is the result of team efforts and it will be wrong to personalise the work in the auditor general.”
A grateful boss’ protectiveness of his staff notwithstanding, as in most cases there is room for improvement. The audit service is willing to put its money where its mouth is, allowing a private audit firm to place the team under the microscope.
“We have decided that for the first time we will allow a private auditor to go through the service’s financials for 2014, following the logic that even auditors should be audited,” he said. “Any organisation that thinks it is perfect is doomed to failure. We aspire to constant improvement.”
