Senora Bejarano and the Internal Control of Socialist State-Run Businesses in Cuba

Gladys Bejerano Portela, Comptroller General of the Republic of Cuba (Cuba Headlines)

14ymedio biggerElías Amor Bravo, Economist, September 8, 2022–Cuban state-run businesses go from one mess to another. They spend more time receiving orders, executing them and subjected to controls than efficiently producing and generating wealth, which is what they should be dedicating themselves to. And now, as if the demands of the regime were not enough for them to be the core of the economic system, the ineffable Señora Bejarano* arrives with her famous National Internal Control Audit. At the worst possible time.

Not for nothing, but this year they have spared no costs and have selected 305 entities from the business system across all provinces (around 30% of businesses) and they announce the participation of more than 2,000 auditors of which almost a thousand will be university students from related fields and experts. They’re doomed. Will there be enough time to work, produce and manage? Then they ask themselves why Cuban state-run businesses cannot meet their goals.

Comptroller Bejarano returns to her old ways positioning herself at the head of a national-level operation, from September 19th through October 31st. During that time, this woman will return as the all-powerful within the regime and the party, directly responsible for the execution of the XIV National Internal Control Audit, conducting compliance audits among a sample of selected organizations.

On the margins of relevance to quantitative estimates which were announced with great fanfare, or of the relative importance the regime assigns to the practice of research and checks on state-run business, carried out by the Comptroller, it is evident that to know what happens with businesses and obtain information on their financial status and compliance with norms, audits are an instrument widely used in all countries.

In fact, they are carried out by external professionals who, working independently or in groups or partnerships, provide services for which they are paid. In any case, audits require independence of the auditor with regard to the business being evaluated which provide all the information requested and which, upon analysis, results in a professional assessment that is based on whatever was analyzed (the accounts, management, procedures, etc.).

Many of us fear that what Bejarano announced in Cuba now, in its XIV edition, has little or nothing to do with international business audit practices. The so-called National Audit appeared at a time of many changes to the Cuban economy, many of these are still in progress, and really little remains today of that initial push, except for checking the box.

What, at the time, was announced as a grand operation to discover pockets of inefficiency and poor management which could be corrected through appropriate measures, amid the pandemic, turned into boring, cumbersome, ungratifying practices of relatively low level compared to expectations.

If anything was unnecessary in this whole process, it is the epic and emphatic language of the state press, when the State newspaper Granma stated that “the auditors and all members of the National Audit System, when facing the challenges as a team, have resolved to contribute to perfecting socialist state businesses, which is much needed for the country’s development.

Well, can anyone cite a result, just one, of the last 13 audits which served to improve the functioning of the socialist state-run businesses in any way? It’s that, in addition, over time, many of the regime’s businesses have become insolvent after the Tarea Ordenamiento [Ordering Task*], and what is worse, they remain, without any hope for improvement.

They announced that “the objective of the audits will be to evaluate the application and impact of the measures adopted by the government, with the goal of contributing to strengthening the socialist state-run business; including management of those that produce goods and services for export, as well as to replace imports and general indications to verify the allocation of liquidity and use of fuel.” Hopefully they will succeed.

I recommend they focus on the Ordering Task and start from there. The rest has resulted because since then, state-run businesses have been struggling to get by and that is where most of their problems lie. Their structural weakness, inability to profitably produce, to replace imports or to export stems from an obsolete and failed economic model that the communist rulers insist on maintaining when it has no future whatsoever. But of course, let’s see how the Comptroller can raise her voice under these conditions and, above all, whether it would make sense for Señora Bejarano to lose her relevance in a confrontation with her regime/party colleagues.

These considerations make the National Internal Control Audit an absurd practice, a waste of time, money and effort among many others which, each year, the regime conducts; waste and more waste which throw the accounts off balance and prevent efficient management. And, in addition, this year’s version arrives at an especially complex moment, with increasing inflation, lack of electricity and financial difficulties.

Señora Bejarano has once again included university students in the “selfless work of auditors and supervisors” as stated in Granma. In principle, as a practicum, it is not bad; if students could later establish themselves as independent audit professionals offering their services to all kinds of businesses. Many of us fear that the catalogue of government-sanctioned self-employment occupations does not include this type of professional; on the other hand, what they learn during the National Audit from Señora Bejarano is of little use to conduct the same task in Spain or the Dominican Republic, where business audit practices follow a completely different path.

It is a shame because it could be a magnificent option for a career path which extends beyond the Island’s borders. A process which results in a useless lie, a mere form which must be completed, even as Señora Bejarano describes the National Internal Control Audit as a “preventive and educational” task, she lies and she knows it. This has ended badly for more than one business leader, although they always find a way out. In any case, complex times are ahead; these will be difficult for socialist state-run businesses and working on the audit is just more communist nonsense. Perhaps they should have left it for another time.

Translator’s note: For an assessment of Señora Bejarano when she was first appointed ten years ago, see here.

Translated by: Silvia Suárez


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