Business Page - GO-INVEST – Investment and reality
BY Christopher Ram
Stabroek News, 17 August 2008
http://www.stabroeknews.com/features/business-page-go-invest-investment-and-reality/
Introduction
As we conclude the series of columns on the QA II privatisation, we turn our attention to the Guyana Office for Investment (GO-INVEST), an entity established in 1994 under the Public Corporations Act 1988 to replace GUYMIDA, an agency with similar objectives closed down soon after the change of government in 1992. GUYMIDA had operated a very structured process for incentives including tax holidays but as is so often the case we throw the baby away with the bath water and there is no documented evidence of the experiences, lessons and mistakes of that agency that would have avoided some of the failures we are now witnessing. The functions of the GO-INVEST as set out in the Order creating it include the facilitation of investments though the identification of investment opportunities and providing profiles for such opportunities.
These functions were expanded in 2004 with the passage of the Investment Act that reposed in GO-INVEST responsibility for setting up and operating the Secretariat of the Investment Promotion Council (IPC). In fact it is that act that placed GO-INVEST in the eye of the QA II storm since GO-INVEST is required to, “at least once annually, review and recommend to the Government alterations in the Priority Lists for Investment categories under section 2 of the Income Tax (In Aid of Industry) Act” – the section that allows the Minister of Finance to grant discretionary tax holidays and to “annually recommend to the Government alterations to the regime of fiscal incentives established for investment including incentives relating to tariffs and taxes, import duties and to export-oriented enterprises.”
Any amendments to the regime of fiscal concessions should therefore have emanated from GO-INVEST and the haste with which Bill # 14 was passed to restore wide-ranging discretionary concessions to the hands of the Minister of Finance was another case of the abrogation by the politicians of a function embedded in the law to be performed independently and professionally. The considerable reduction in the scope for discretionary concessions under a change in the law in 2003 was not only a condition of the multilateral financial institutions and donors but was a way to provide better and more transparent governance. That the status quo is being restored so soon after our exit from the IMF programme is surely not reassuring.
Confusion
My enquiries concerning this area of GO-INVEST’s statutory responsibility suggest complete confusion at GO-INVEST about whether or not some of its directors are even aware of, let alone, discharge this responsibility. It was simply unbelievable how difficult it was to obtain from that source a copy of the GO-INVEST Order and how confused persons are as to whether the functions of the IPC have been taken over by the National Competitive Council headed by President Jagdeo. We shall leave for later the accomplishments of that council, expenditure on expensive consultants, the usefulness of no less than six ministers sitting around discussing matters that have been fully ventilated and decided on more than a decade ago, and why we need to borrow $5.4 billion dollars on what, from occasional publications issued by the National Competitiveness Council, appears to be a complete waste of resources. Just think of the many better uses to which that money can be spent.
The executive head of GO-INVEST is Mr Geoff DaSilva, a long-time PPP activist in Canada whose appointment as Minister of Trade ended with his replacement by Mr Manzoor Nadir of the TUF. GO-INVEST’s acting chairman is Mr Keith Burrowes who heads a number of other government controlled entities. Apparently because the government treated QA II principally as a privatization the role of GO-INVEST was secondary to that of the PU/NICIL headed by Mr Winston Brassington. GO-INVEST did take a lead salesman’s role in representing the transaction and in language not quite suited to an investment promotion agency attacked “the very small cabal of self-appointed business leaders” who had called for an apology from President Jagdeo for his widely criticized response to business leader Yesu Persaud’s call for the rest of the private sector to be granted similar concessions as QA II. Repeating the language of the President, GO-INVEST described a statement by the Private Sector Commission as “reflecting ignorance of the privatisation framework.”
No head
While falling short of an apology, it must have taken some guts then for Mr DaSilva at the PU/NICIL’s seminar on taxation to admit that “we made a mistake” in awarding tax holidays to two of QA II’s companies, an admission that none of the other players in the saga has so far had the courage to make. At the time of the seminar the misrepresentation of the $50 million per annum rent had not yet been revealed, nor was the claim about a textile mill, a misrepresentation that has so far gone unacknowledged by GO-INVEST, an agency that had described as “totally dishonest” an innuendo by the Private Sector Commission.
GO-INVEST has had no chairman for some time and the acting position is held by Mr Keith Burrowes, who is, among many other public offices he holds, the Chairman of the Guyana Chronicle, which was another entity cheerleading for the QA II deal. While the Guyana Revenue Authority is represented on the Board there has been no private sector representative since the withdrawal of Mr David Yankana several years ago on account of ill-health.
The dangers
Mr DaSilva’s presentation at the July 29 Taxation Seminar emphasised the “investment projects of 285 companies totaling US$835M” between 2002 and 2008. He announced that these projects had attracted some 1006 concessions in the form of duty free concessions for machinery, equipment, vehicles and furnishings amounting to sixteen billion dollars between 2005 to June 2008. Mr DaSilva’s paper did not offer any reason for giving the investment projects for one period while stating the incentives in the form of tax exemptions for a considerably shorter period. In fact not all of the 285 entities are companies and it would have been instructive for Mr DaSilva to have indicated the value of the concessions granted to the self-employed and other unincorporated businesses that continue to deprive the country of billions of dollars of tax revenue each year. In effect these businesses get more in the form of concessions than they pay in the form of taxes or benefit they provide to the economy.
The public is understandably still concerned about the revelations of the QA II details but there is a bigger picture in which there has been exposed a massive failure on the part of key government agencies and officials to discharge a professional quality of coordination, due diligence and necessary follow-up work on concessions granted to investment projects. The entities are set up and officials are paid, often tax-free $US to do a professional job for the taxpaying public, not to act as servants to politicians.
Matching the numbers
GO-INVEST’s numbers have always attracted attention for their lack of support and in their 2006 Budget Focus, Ram & McRae commented that the GO-INVEST “seems to have its own measure of identifying projects, the investments made and the jobs created. This time [2006] it appears to have out-done itself with the minister’s statement that it [GO-INVEST] has facilitated nearly 140 private sector projects, representing investments of $68Bn which generated an additional 9,000 jobs.” Those numbers translate into an average of 65 jobs and an investment of $485M per project or $7.5M per job. Even the economic powerhouse China could not attract such investments! Focus had also noted that the Finance Minister had announced in his 2005 budget presentation that seventy-five investment projects had been facilitated by GO-INVEST which should have created 1,900 direct jobs and the firm suggested that it was unfortunate that the Minister in his presentation in the following year did not indicate how many of the 1,900 jobs were actually created.
Co-incidentally no investment or job numbers were announced in subsequent budget speeches.
Mr DaSilva also told the seminar that only about 60% of the investments are notified or facilitated by Go-Invest. Adding the remaining 40% would put investments between 2002-2008 at US$1.4 billion or in private sector investment. How do these numbers match up with other data in the economy?
2001 2002 2003 2004 2005 2006 2007
Active employed (thousands) 121 120 115 115 117 117 118
Active self employed (thousands) 11 10 9 9 7 7 7
Taxes paid by Self-employed ($M) 725 778 887 993 919 1,030 1,243
Source of information: National Insurance Scheme & National Estimates
Mr DaSilva usually dismisses questions about Go-Invest’s numbers by questioning the effectiveness of the National Insurance Scheme but the GRA which actually grants concessions sits on his board in the person of one of its officials, some of whom have been sent on leave in relation to a high profile tax-evasion scandal. Are we to believe that the GRA is so generous and careless about the billions of dollars of concessions that it grants every year or that the NIS is still troublingly inefficient and expensively incompetent after sixteen years?
Taking a tax holiday
There is undoubtedly a high degree of underreporting by businesses to the GRA and the NIS and many Guyanese taxpayers including companies that are audited do not wait for tax holidays but take them, adding another dimension of “discretion” to them. But Go-Invest’s role is the promotion of investments not tax evasion, even as it expects the GRA to do a better job particularly since up-front concessions are given for investments that are often overstated. There is no single instance of the revocation of concessions or the prosecution of those businesses that provide false information to get concessions from the GRA.
Fanciful
A close examination of the investments for which concessions have been granted by the GRA on the recommendations of Go-Invest leads to questions about some of the information published by Go-Invest. Here are some examples obtained from comparing GO-Invest’s information with that contained in the financial reports of public companies and other verifiable sources.
Sterling Products Ltd is stated as having been granted concessions in 2004 for machinery, equipment and vehicles for an investment of $600M. According to the financial statements of the company the amount invested in 2004 and 2005 was $155 M.
The DDL subsidiary TOPCO is stated as having invested $800M in 2004 and 2005. In fact the bulk of the investment was done in 2003 while the total investment by all DDL subsidiaries in 2003-2005 was under $800 million.
Caribbean Containers Inc, another public company is shown as having invested $310M in 2004 and 2006. In fact, the company’s financial statements show capital expenditure for those years of $6.9M.
The same G&C Sanata Company Inc that has been described by QA II as abandoned for fifteen years is shown as having invested $800 million in 2005 while CGX is shown as having invested $12 billion or US$60 million.
The same level of casualness appears with regard to private companies including clients of Ram & McRae whose investments in their books are nowhere close to those reported by Go-Invest, while in the case of the Omai/IAMGold/Bosai there seems to be evidence of double-counting with the payment by Bosai to IAMGOLD being shown as an investment.
Conclusion
QAII has been more than an embarrassment for this government. It has been a revelation of how government business is transacted, public assets are sold, tax concessions given away and the public is misled by, to use the words of Go-Invest “a very small cabal” of political functionaries and professionals who seem willing to compromise their professionalism to meet the objectives set by politicians. All of the key players involved, the President, the Minister of Finance, Cabinet, the Privatisation Board, PU/NICIL, Guyana Revenue Authority and G-Invest have been found terribly wanting.
The fact that during the revelation of this saga the law was changed to facilitate even looser action by these persons and institutions must be a great cause for concern and reinforces the view that legislation was introduced to legitimize the unlawful.
There is clearly a need to review the operations and mandate of each of these offices and functions with the requirement for considerably more rules-based decisions carried out in a system of proper checks and balances. Too much is at stake for the revenues, assets and welfare of the nation. The rest of society including the accounting profession needs to demand a greater say in these matters.
Next week we will look at the Auditor General’s Report for 2006
Sunday, August 31, 2008
The Auditor General’s report for 2006 (Continued)
Business Page
BY Christopher Ram
Stabroek News. 31 August 2008
http://www.stabroeknews.com/features/business-page-37/
The Auditor General’s report for 2006
(Continued)
Update
In the first part of this review (BP 24.8.08) of the Auditor General’s report for 2006 we examined the several statutory obligations of the Audit Office under the constitution and several other statutes. We noted that the office has failed to carry out a substantial and perhaps a majority of its duties including the audit of entities and funds amounting to billions of dollars, noting specifically the Sugar Industry and Welfare Fund which has not been audited for over ten years. During the week I learnt that this fund amounting to approximately $1.25 billion was subject to a major fraud. This should cause an auditor not only to advance the statutory audit of the financial statements but to carry out a fraud investigation as well. While the Audit Act allows the Auditor General “complete discretion” such discretion surely does not extend to whether or not he can choose to carry out the audit of any entity, and the Public Accounts Committee needs to press him on this.
Two of the most important powers of the Auditor General are those of access to information to carry out the audits for which he is statutorily responsible and the freedom (and duty) to report to Parliament on such matters as he considers necessary. To wait for five years before inserting almost as a footnote to his report that such audits are outstanding, amounts to a dereliction of his duty. It would seem as well that there is a fiduciary obligation on the part of the National Assembly to withhold funds until the audits are brought up to date, as the government has done with certain other entities.
On the President’s statement that the bank balances are not real cash but a book entry, the records show that at the end of 2006 the government had over three hundred bank accounts of which one hundred and eight were dormant, but with balances amounting to hundreds of millions of dollars. These accounts were held exclusively with a third party and represent real cash running into billions of dollars. When the President misspoke in relation to the tax laws, the task of cleaning up fell on Winston Brassington. Now it is the turn of Finance Minister Dr Ashni Singh who has been mandated to educate those described by the President as “financially illiterate” even as the President mistakenly identifies the Minister as the authority for the appointment of the Auditor General. In fact the constitution confers that power on the President acting in accordance with the advice of the Public Service Commission, instead of logically that of the National Assembly through the Public Accounts Committee (PAC).
Independence
In this second column in the series we look at some of the other provisions of the Audit Act and their implications for professional quality work by the Audit Office. The first is the duty to act independently. The role of the Auditor General is primarily to provide Parliament, the people and donors with independently derived audit information about the executive arm of government. Parliament exercises its oversight role of the office by way of the Public Accounts Committee chaired by the opposition which from time to time laments its narrow mandate, while Parliament seems to think its own involvement ends with the handing over of the report by the Auditor General to the Speaker of the National Assembly, often several months late.
The Audit Office cannot act independently if it is strangled for funds by the Ministry of Finance, arguably its primary client. Parliament needs to be far more forceful in securing resources for the Audit Office which would be one way to secure its independence of the executive and ensure the effectiveness of the office’s work. The Auditor General’s independence is also compromised because his is an acting position, though as we shall see presently it would not be possible for the acting holder to be confirmed in the post.
This lack of independence was most tellingly demonstrated by a press statement in 2005 referring to instructions by the President to the Audit Office in relation to the long promised flood account. Perhaps not too many people are surprised that three years later the Audit Office has gone silent on this matter. More recently we saw the Auditor General being summoned to the Office of the President in connection with another Customs corruption scandal but will this report too never see the light of day despite the requirement of the law that all reports of the Auditor General be submitted to the National Assembly?
Conflict of interest
The second provision is the prohibition of any conflict of interest between the Auditor General’s official role and that in any private or professional entity or activity with which he is associated. The problem is not only that this limitation is narrowly defined but that it applies to the Auditor General only. The second paragraph of the audit report just published correctly assigns responsibility for preparation of the statements and accounts to the Minister of Finance and Head of Budget Agencies. Those who would wish to defend the situation whereby the wife of the Finance Minister in her role as number two and the most professionally qualified person in the Audit Office, is not bound by this narrow conflict of interest limitation simply do not understand how the audit profession works, what conflict of interest means and the damage done by its very appearance. Any such appearance will mean that the report coming out of the Audit Office will be viewed with scepticism.
Qualifications
The third point is in relation to what would seem to be the required qualification for the post of Auditor General. Could Parliament in enacting the Audit Act 2004 giving to the Auditor General the same conditions of service and benefits including tax free salaries as the Chief Justice have intended that the Auditor General would not have to hold a first degree or a professional qualification? That is the case of the current holder of the post of Auditor General whose audit responsibilities dwarf those of all the professional auditors in Guyana combined.
Depleted
The vacancy rate in the Audit Office averages about 50% with a considerably higher rate at the senior levels.
The website of the Australian Auditor General in discussing its role notes that to be seen to be competent, key stakeholders must view the Auditor General as being the right person for the job and must also have the means to acquire resources according to the skill requirements of the job to be done. Without these characteristics, the assurances of the Auditor General would certainly lack credibility, even if the independence of the office was not significantly compromised.
In his 2002 report, then Auditor General (ag) Mr B Balram referred to the “depleting staff situation in the Audit Office” as a result of which he could only adopt a selective approach in his audit. Consequently he warned against relying “upon the findings of his report to reflect the results of a comprehensive review of the financial operations of Government,” adding that he thought such a review desirable. While four years later the situation is now much worse, there is an absence of similar frankness by the incumbent leaving the uninformed reader with a false sense of security about the state of the government’s finances.
Basic
No wonder then that the Audit Office has chosen the most basic areas of cash and bank, purchases and stores and the maintenance of vehicle log books as his focus for the shortened audit report for 2006. This reminded me of a medical client some time ago who chided me for not paying enough attention to petty cash and postage stamps amounting to less than $5,000 but seemed far less concerned about whether his billing system which accounted for hundreds of thousands of dollars in revenue per month was effective! While Value for Money (VFM) audits are indeed very useful and necessary, there are not enough staff for the more routine functions involved, and many audits go undone for several years. Yet, the Auditor General is diverting his limited resources to set up a VFM Unit whose only progress to date “is presently in the initial stage of formulating its first VFM audit plan,” whatever that means in practical terms.
Sadly, the several limitations are reflected in the scope of his audit and the quality of the report which at times uses language more suited to a newspaper column than a professional report. For example, what must the reader assume from paragraph 6 (iv) of the report that refers to “The balances of 66 inactive bank accounts, of which eight had balances in excess of $100M.” It is standard practice that audit reports should not assume financial literacy and should as far as possible state actual values. And more than once the report gives the impression that the introduction of the new system IFMAS was done during 2006 – in fact this was introduced in 2004, and how too does the Auditor General explain his statement that IFMAS operates a single bank account when some 194 active accounts are maintained?
Trinkets and the wood for the trees
And in paragraph 8, the report repeats the “continued lack of reporting for all gifts to Ministries, Departments and Regions” as if we are talking about trinkets. In fact some “gifts” represent hundreds of millions of dollars and the Auditor General only needs to refer to successive Budget speeches and the newspapers to see some of the cases of huge sums of money. In one paragraph the report noted a UNDP grant of US$4.373M, but why not the others, not only out of a professional obligation but also so that readers can see the full cost of running the country and where the money comes from.
And in the same vein, how could the report not even mention the huge sums being collected by the Privatisation Unit/NICIL that are not being properly accounted for, or why the royalties collected from OMAI are not being deposited into the Consolidated Fund as required by the constitution? The value of special funds not accounted for and spent without any parliamentary approval has gone way beyond the infamous Lotto Funds despite the howls of protest over the years.
To be continued
BY Christopher Ram
Stabroek News. 31 August 2008
http://www.stabroeknews.com/features/business-page-37/
The Auditor General’s report for 2006
(Continued)
Update
In the first part of this review (BP 24.8.08) of the Auditor General’s report for 2006 we examined the several statutory obligations of the Audit Office under the constitution and several other statutes. We noted that the office has failed to carry out a substantial and perhaps a majority of its duties including the audit of entities and funds amounting to billions of dollars, noting specifically the Sugar Industry and Welfare Fund which has not been audited for over ten years. During the week I learnt that this fund amounting to approximately $1.25 billion was subject to a major fraud. This should cause an auditor not only to advance the statutory audit of the financial statements but to carry out a fraud investigation as well. While the Audit Act allows the Auditor General “complete discretion” such discretion surely does not extend to whether or not he can choose to carry out the audit of any entity, and the Public Accounts Committee needs to press him on this.
Two of the most important powers of the Auditor General are those of access to information to carry out the audits for which he is statutorily responsible and the freedom (and duty) to report to Parliament on such matters as he considers necessary. To wait for five years before inserting almost as a footnote to his report that such audits are outstanding, amounts to a dereliction of his duty. It would seem as well that there is a fiduciary obligation on the part of the National Assembly to withhold funds until the audits are brought up to date, as the government has done with certain other entities.
On the President’s statement that the bank balances are not real cash but a book entry, the records show that at the end of 2006 the government had over three hundred bank accounts of which one hundred and eight were dormant, but with balances amounting to hundreds of millions of dollars. These accounts were held exclusively with a third party and represent real cash running into billions of dollars. When the President misspoke in relation to the tax laws, the task of cleaning up fell on Winston Brassington. Now it is the turn of Finance Minister Dr Ashni Singh who has been mandated to educate those described by the President as “financially illiterate” even as the President mistakenly identifies the Minister as the authority for the appointment of the Auditor General. In fact the constitution confers that power on the President acting in accordance with the advice of the Public Service Commission, instead of logically that of the National Assembly through the Public Accounts Committee (PAC).
Independence
In this second column in the series we look at some of the other provisions of the Audit Act and their implications for professional quality work by the Audit Office. The first is the duty to act independently. The role of the Auditor General is primarily to provide Parliament, the people and donors with independently derived audit information about the executive arm of government. Parliament exercises its oversight role of the office by way of the Public Accounts Committee chaired by the opposition which from time to time laments its narrow mandate, while Parliament seems to think its own involvement ends with the handing over of the report by the Auditor General to the Speaker of the National Assembly, often several months late.
The Audit Office cannot act independently if it is strangled for funds by the Ministry of Finance, arguably its primary client. Parliament needs to be far more forceful in securing resources for the Audit Office which would be one way to secure its independence of the executive and ensure the effectiveness of the office’s work. The Auditor General’s independence is also compromised because his is an acting position, though as we shall see presently it would not be possible for the acting holder to be confirmed in the post.
This lack of independence was most tellingly demonstrated by a press statement in 2005 referring to instructions by the President to the Audit Office in relation to the long promised flood account. Perhaps not too many people are surprised that three years later the Audit Office has gone silent on this matter. More recently we saw the Auditor General being summoned to the Office of the President in connection with another Customs corruption scandal but will this report too never see the light of day despite the requirement of the law that all reports of the Auditor General be submitted to the National Assembly?
Conflict of interest
The second provision is the prohibition of any conflict of interest between the Auditor General’s official role and that in any private or professional entity or activity with which he is associated. The problem is not only that this limitation is narrowly defined but that it applies to the Auditor General only. The second paragraph of the audit report just published correctly assigns responsibility for preparation of the statements and accounts to the Minister of Finance and Head of Budget Agencies. Those who would wish to defend the situation whereby the wife of the Finance Minister in her role as number two and the most professionally qualified person in the Audit Office, is not bound by this narrow conflict of interest limitation simply do not understand how the audit profession works, what conflict of interest means and the damage done by its very appearance. Any such appearance will mean that the report coming out of the Audit Office will be viewed with scepticism.
Qualifications
The third point is in relation to what would seem to be the required qualification for the post of Auditor General. Could Parliament in enacting the Audit Act 2004 giving to the Auditor General the same conditions of service and benefits including tax free salaries as the Chief Justice have intended that the Auditor General would not have to hold a first degree or a professional qualification? That is the case of the current holder of the post of Auditor General whose audit responsibilities dwarf those of all the professional auditors in Guyana combined.
Depleted
The vacancy rate in the Audit Office averages about 50% with a considerably higher rate at the senior levels.
The website of the Australian Auditor General in discussing its role notes that to be seen to be competent, key stakeholders must view the Auditor General as being the right person for the job and must also have the means to acquire resources according to the skill requirements of the job to be done. Without these characteristics, the assurances of the Auditor General would certainly lack credibility, even if the independence of the office was not significantly compromised.
In his 2002 report, then Auditor General (ag) Mr B Balram referred to the “depleting staff situation in the Audit Office” as a result of which he could only adopt a selective approach in his audit. Consequently he warned against relying “upon the findings of his report to reflect the results of a comprehensive review of the financial operations of Government,” adding that he thought such a review desirable. While four years later the situation is now much worse, there is an absence of similar frankness by the incumbent leaving the uninformed reader with a false sense of security about the state of the government’s finances.
Basic
No wonder then that the Audit Office has chosen the most basic areas of cash and bank, purchases and stores and the maintenance of vehicle log books as his focus for the shortened audit report for 2006. This reminded me of a medical client some time ago who chided me for not paying enough attention to petty cash and postage stamps amounting to less than $5,000 but seemed far less concerned about whether his billing system which accounted for hundreds of thousands of dollars in revenue per month was effective! While Value for Money (VFM) audits are indeed very useful and necessary, there are not enough staff for the more routine functions involved, and many audits go undone for several years. Yet, the Auditor General is diverting his limited resources to set up a VFM Unit whose only progress to date “is presently in the initial stage of formulating its first VFM audit plan,” whatever that means in practical terms.
Sadly, the several limitations are reflected in the scope of his audit and the quality of the report which at times uses language more suited to a newspaper column than a professional report. For example, what must the reader assume from paragraph 6 (iv) of the report that refers to “The balances of 66 inactive bank accounts, of which eight had balances in excess of $100M.” It is standard practice that audit reports should not assume financial literacy and should as far as possible state actual values. And more than once the report gives the impression that the introduction of the new system IFMAS was done during 2006 – in fact this was introduced in 2004, and how too does the Auditor General explain his statement that IFMAS operates a single bank account when some 194 active accounts are maintained?
Trinkets and the wood for the trees
And in paragraph 8, the report repeats the “continued lack of reporting for all gifts to Ministries, Departments and Regions” as if we are talking about trinkets. In fact some “gifts” represent hundreds of millions of dollars and the Auditor General only needs to refer to successive Budget speeches and the newspapers to see some of the cases of huge sums of money. In one paragraph the report noted a UNDP grant of US$4.373M, but why not the others, not only out of a professional obligation but also so that readers can see the full cost of running the country and where the money comes from.
And in the same vein, how could the report not even mention the huge sums being collected by the Privatisation Unit/NICIL that are not being properly accounted for, or why the royalties collected from OMAI are not being deposited into the Consolidated Fund as required by the constitution? The value of special funds not accounted for and spent without any parliamentary approval has gone way beyond the infamous Lotto Funds despite the howls of protest over the years.
To be continued
Wednesday, August 27, 2008
Finance minister tasked to guide media on Auditor General’s report
Finance minister tasked to guide media on Auditor General’s report
Posted By Staff On August 25, 2008 @ 5:06 am In News | 8 Comments
President Bharrat Jagdeo has tasked the Minister of Finance Dr Ashni Singh to explain to the media how to interpret the Auditor General’s report on government accounts, saying that there is a great deal of illiteracy in the treatment of financial matters.
And the President has said too that the proceeds of the lotto funds not being placed into the Consolidated Fund has always been a question of a technical issue rather than one of accountability because the lotto proceeds are audited, too, but separately by the Auditor General.
He told the media at a press conference on Thursday at the Office of the President that it was not an issue of how the money is spent but it was just a technical issue on whether the lotto funds should be transferred to the Consolidated Fund and spent from there.
“What happens now, I think, is that they transfer a part of it to the Consolidated Fund. If there is a $50 million project, the sum required is transferred to the Consolidated Fund,” he said. He said that the lotto funds are placed in a separate account outside of the Consolidated Fund under provisions of the country’s financial laws.
On the other hand, in an earlier press conference held by the PNCR on Thursday, Winston Murray, PNCR-1G MP and member of the Public Accounts Committee to which the Auditor General is accountable, addressed the media on the lotto funds.
He noted that the Auditor General’s report indicated that the sum of $2.95 billion (US$47.5m) was paid over to the government as the people’s share from the lotteries over the period 1996-2006 “in open and unashamed violation of Article 216 of the Guyana Constitution this money has not been paid into the Consolidated Fund. All of this money has been deposited into special bank account No. 3119 under the control of the Minister of Finance.”
As a result none of the expenditure from this account has ever been approved by the National Assembly. While the Auditor General has reported that the projects on which these monies were spent were subject to audit, the PNCR maintains that such a procedure could not be a substitute for upholding the requirements of the constitution.
On the coverage of the Auditor General’s Report, Jagdeo said the media gave the impression that there are billions of dollars in dormant accounts waiting to be spent when that was not the case.
He also said that an advance of a billion dollars could be outstanding on December 31 of any given year and if the report is being written in January or February of the following year even though the advance would have been cleared in January or February, even before the report was written, the advance would be still part of the report for the previous year because that was the position at December 31. “So when you say that billions of dollars in advances are outstanding it could just be a timing difference,” he said.
There may be cases where there may be corruption, the President said, agreeing that where there are cases of corruption people should face the full brunt of the law. However, he said that where persons were ascribing corrupt motives to some of the transactions found in the reports, it might simply be because of a lag in time during the financial transactions.
When several billions of dollars lying in dormant accounts are spoken about, he said, “this is not real cash. It is not money to be spent. It is a book entry. It is not money that you can transfer to the government and the government spends in that fiscal year… It is just an accounting entry. To say that billions are lying in dormant accounts create the impression there is money to be spent and the government is not transferring it because of some corrupt motive.”
He contended that when the PPP/C took office there were billions of dollars in hundreds of dormant accounts in the Central Bank. “These accounts weren’t closed and we had a long process when we took office to clean that up. It is not real money.
There is a difference between accounting dollar and an economic dollar…. huge difference. The Auditor General deals with the accounting dollar and the Finance Ministry deals with the economic dollar,” he explained. In the meantime, Murray told the media at a press conference Thursday morning that there was a number of inactive bank accounts with large sums of money in them (over $7.9b). The Auditor General expressed the opinion that such accounts should be closed and the balances transferred to the Consolidated Fund. Murray stated that the PNCR is aware that in many instances the Accountant General had ordered such accounts closed and the funds transferred. For many years now this has not been done.
Murray said that the Head of the Presidential Secretariat, Dr Roger Luncheon has since been reported as saying that the problem with such accounts was that they went back to the pre-1992 era and there were therefore difficulties in reconciling such accounts. “This is the typical knee jerk reaction from the Government. When something cannot be properly explained blame it on the PNC,” Murray said.
The recommendation to close inactive accounts, he said, does not remove the need for reconciliation but simply ensures that balances in those accounts are not available for misuse or abuse - hence the recommendation to transfer to the Cons-olidated Fund and that this is a matter that has been unattended for many years now.
Noting that it was out of concern for transparency that the government has sought to table the reports to the National Assembly and not to the Minister of Finance as was done previously, Jagdeo said that the Auditor General reports directly to Public Accounts Committee which is chaired by the parliamentary opposition.
Many of the issues raised and for which there are responses could be cleared up in the response from the various government ministries, departments and entities.
Nevertheless, he said that the government was very happy that the issues were coming out in the public and hopefully they would stimulate a proper technical discussion on accountability and not an anecdotal newspaper-like discussion.
He said that since the PPP/C took office, each year there has been audited reports, the powers of the Auditor General has been extended to audit public enterprises, as well as privatization proceeds.
Jagdeo said that he sees the audit report as a tool for better management because they could identify some of the problems associated with accountability.
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URL to article: http://www.stabroeknews.com/news/finance-minister-tasked-to-guide-media-on-auditor-general%e2%80%99s-report/
Posted By Staff On August 25, 2008 @ 5:06 am In News | 8 Comments
President Bharrat Jagdeo has tasked the Minister of Finance Dr Ashni Singh to explain to the media how to interpret the Auditor General’s report on government accounts, saying that there is a great deal of illiteracy in the treatment of financial matters.
And the President has said too that the proceeds of the lotto funds not being placed into the Consolidated Fund has always been a question of a technical issue rather than one of accountability because the lotto proceeds are audited, too, but separately by the Auditor General.
He told the media at a press conference on Thursday at the Office of the President that it was not an issue of how the money is spent but it was just a technical issue on whether the lotto funds should be transferred to the Consolidated Fund and spent from there.
“What happens now, I think, is that they transfer a part of it to the Consolidated Fund. If there is a $50 million project, the sum required is transferred to the Consolidated Fund,” he said. He said that the lotto funds are placed in a separate account outside of the Consolidated Fund under provisions of the country’s financial laws.
On the other hand, in an earlier press conference held by the PNCR on Thursday, Winston Murray, PNCR-1G MP and member of the Public Accounts Committee to which the Auditor General is accountable, addressed the media on the lotto funds.
He noted that the Auditor General’s report indicated that the sum of $2.95 billion (US$47.5m) was paid over to the government as the people’s share from the lotteries over the period 1996-2006 “in open and unashamed violation of Article 216 of the Guyana Constitution this money has not been paid into the Consolidated Fund. All of this money has been deposited into special bank account No. 3119 under the control of the Minister of Finance.”
As a result none of the expenditure from this account has ever been approved by the National Assembly. While the Auditor General has reported that the projects on which these monies were spent were subject to audit, the PNCR maintains that such a procedure could not be a substitute for upholding the requirements of the constitution.
On the coverage of the Auditor General’s Report, Jagdeo said the media gave the impression that there are billions of dollars in dormant accounts waiting to be spent when that was not the case.
He also said that an advance of a billion dollars could be outstanding on December 31 of any given year and if the report is being written in January or February of the following year even though the advance would have been cleared in January or February, even before the report was written, the advance would be still part of the report for the previous year because that was the position at December 31. “So when you say that billions of dollars in advances are outstanding it could just be a timing difference,” he said.
There may be cases where there may be corruption, the President said, agreeing that where there are cases of corruption people should face the full brunt of the law. However, he said that where persons were ascribing corrupt motives to some of the transactions found in the reports, it might simply be because of a lag in time during the financial transactions.
When several billions of dollars lying in dormant accounts are spoken about, he said, “this is not real cash. It is not money to be spent. It is a book entry. It is not money that you can transfer to the government and the government spends in that fiscal year… It is just an accounting entry. To say that billions are lying in dormant accounts create the impression there is money to be spent and the government is not transferring it because of some corrupt motive.”
He contended that when the PPP/C took office there were billions of dollars in hundreds of dormant accounts in the Central Bank. “These accounts weren’t closed and we had a long process when we took office to clean that up. It is not real money.
There is a difference between accounting dollar and an economic dollar…. huge difference. The Auditor General deals with the accounting dollar and the Finance Ministry deals with the economic dollar,” he explained. In the meantime, Murray told the media at a press conference Thursday morning that there was a number of inactive bank accounts with large sums of money in them (over $7.9b). The Auditor General expressed the opinion that such accounts should be closed and the balances transferred to the Consolidated Fund. Murray stated that the PNCR is aware that in many instances the Accountant General had ordered such accounts closed and the funds transferred. For many years now this has not been done.
Murray said that the Head of the Presidential Secretariat, Dr Roger Luncheon has since been reported as saying that the problem with such accounts was that they went back to the pre-1992 era and there were therefore difficulties in reconciling such accounts. “This is the typical knee jerk reaction from the Government. When something cannot be properly explained blame it on the PNC,” Murray said.
The recommendation to close inactive accounts, he said, does not remove the need for reconciliation but simply ensures that balances in those accounts are not available for misuse or abuse - hence the recommendation to transfer to the Cons-olidated Fund and that this is a matter that has been unattended for many years now.
Noting that it was out of concern for transparency that the government has sought to table the reports to the National Assembly and not to the Minister of Finance as was done previously, Jagdeo said that the Auditor General reports directly to Public Accounts Committee which is chaired by the parliamentary opposition.
Many of the issues raised and for which there are responses could be cleared up in the response from the various government ministries, departments and entities.
Nevertheless, he said that the government was very happy that the issues were coming out in the public and hopefully they would stimulate a proper technical discussion on accountability and not an anecdotal newspaper-like discussion.
He said that since the PPP/C took office, each year there has been audited reports, the powers of the Auditor General has been extended to audit public enterprises, as well as privatization proceeds.
Jagdeo said that he sees the audit report as a tool for better management because they could identify some of the problems associated with accountability.
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URL to article: http://www.stabroeknews.com/news/finance-minister-tasked-to-guide-media-on-auditor-general%e2%80%99s-report/
The latest statements by the President on the Auditor General’s report are disturbing
The latest statements by the President on the Auditor General’s report are disturbing
Stabroek News. Letter.
Posted By Staff On August 26, 2008 @ 5:08 am In Letters | 12 Comments
Dear Editor,
The latest statements by the President about the Lotto Funds as well as the balances held in dormant bank accounts at the Bank of Guy-ana are indeed very disturbing. These matters were highlighted in previous Auditor General’s reports going back to the ’90s and the early 2000s without any public comment from the administration.
In addition, the Public Accounts Committee (PAC) looked into these issues, concurred with the findings of the Audit Office and made appropriate recommendations for the transfer of balances held in these special bank accounts to the Consolidated Fund. Why the administration has not acted on the PAC’s recommendations over the years remains a mystery.
It is to be noted with concern that the President wants the Minister of Finance to guide the media on the Auditor General’s report. This is creating a dangerous precedent since such an action will in no uncertain measure undermine the independence of the Auditor General’s Office. It is the Auditor General who has to explain his report if certain aspects are not clear. Let us hope that the Minister, who is a professional accountant, will advise the President about the lack of wisdom of such an approach.
It is the duty of the opposition, the private sector and all other representatives of civil society to defend the independence of the Auditor General’s Office from the executive. It hurts so much to notice that all the gains that have been made to ensure a constitutionally strong and effective legislative audit, are being rapidly eroded by the actions of this administration.
The evidence abounds of the lack of transparency, greater accountability and good governance so vitally important for the country to progress economically and otherwise. These latest statements by the President are yet another example of this administration’s continued attempts to hoodwink the citizens of this country.
Yours faithfully,
(Name and address
provided)
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Stabroek News. Letter.
Posted By Staff On August 26, 2008 @ 5:08 am In Letters | 12 Comments
Dear Editor,
The latest statements by the President about the Lotto Funds as well as the balances held in dormant bank accounts at the Bank of Guy-ana are indeed very disturbing. These matters were highlighted in previous Auditor General’s reports going back to the ’90s and the early 2000s without any public comment from the administration.
In addition, the Public Accounts Committee (PAC) looked into these issues, concurred with the findings of the Audit Office and made appropriate recommendations for the transfer of balances held in these special bank accounts to the Consolidated Fund. Why the administration has not acted on the PAC’s recommendations over the years remains a mystery.
It is to be noted with concern that the President wants the Minister of Finance to guide the media on the Auditor General’s report. This is creating a dangerous precedent since such an action will in no uncertain measure undermine the independence of the Auditor General’s Office. It is the Auditor General who has to explain his report if certain aspects are not clear. Let us hope that the Minister, who is a professional accountant, will advise the President about the lack of wisdom of such an approach.
It is the duty of the opposition, the private sector and all other representatives of civil society to defend the independence of the Auditor General’s Office from the executive. It hurts so much to notice that all the gains that have been made to ensure a constitutionally strong and effective legislative audit, are being rapidly eroded by the actions of this administration.
The evidence abounds of the lack of transparency, greater accountability and good governance so vitally important for the country to progress economically and otherwise. These latest statements by the President are yet another example of this administration’s continued attempts to hoodwink the citizens of this country.
Yours faithfully,
(Name and address
provided)
Article printed from Stabroek News: http://www.stabroeknews.com
URL to article: http://www.stabroeknews.com/letters/the-latest-statements-by-the-president-on-the-auditor-general%e2%80%99s-report-are-disturbing/
Sunday, August 10, 2008
QA11 concessions bill passed -Opposition votes against
QA11 concessions bill passed -Opposition votes against
Stabroek News. Posted By Staff On August 1, 2008 @ 5:28 am In News | 6 Comments
http://www.stabroeknews.com/news/qa11-concessions-bill-passed/
By Miranda La Rose
The Fiscal Enactments (Amend-ment) Bill 2008 to facilitate tax concessions for two subsidiaries of the Queens Atlantic Investment Inc (QA11) was passed in the National Assembly yesterday without the support of the opposition which felt that the amendments were defective.
AFC MP Khemraj Ramjattan also suggested that President Bharrat Jagdeo should apologise to prominent businessman Yesu Persaud for remarks made about his alleged lack of knowledge of the tax laws and for asking that other companies be given similar concessions as those granted to QAII.
Even before the bill was debated, the Speaker of the National Assembly Ralph Ramkarran called for a 15-minute suspension after AFC MP Sheila holder brought to the attention of the house that the bill was not printed in keeping the parliamentary Standing Orders.
It was discovered that only photocopies of the bill were provided for the opposition while the printed copies were given to the government MPs.
[1] Winston Murray
Winston Murray
Leading off the three-and-a-half hour debate which he expected would have been brief, Minister of Finance Dr Ashni Singh said that the amendment was necessary to remedy an error that was made when the bill was passed five years ago.
He said that with the passage of time in which circumstances would have changed it would be necessary to identify new and emerging sectors to attract investment.
The bill, he said was in keeping with strengthening the country’s fiscal and tax administration system while encouraging investment, expanding the economic base through wealth and job creation and poverty reduction.
He noted that since the government enacted the Fiscal Enactments Act in 2003 the government returned to the house several times to ensure greater responsibility in terms of fiscal concession. One such example he said was the government returning to parliament for the zero rating of a number of items that previously attracted Value Added Tax.
In wrapping up the debate Singh spoke of an attractive business climate and referred to more than ten articles published in the Stabroek News in recent years to substantiate his claim.
PNCR-1G MP Winston Murray in his presentation, noting Singh’s brevity, said he observed a lack of conviction in his arguments. Stating that the errors the minister pointed to were in the 2003 act for five years without correction, he said that he has no doubt that the amendment was to facilitate QAII to undertake certain investments which had no legal basis when the government signed the investment agreements with the investor.
There was almost complete silence in the National Assembly when Murray put forward his arguments.
Congratulating the Guyana Office for Investment for admitting to a mistake in seeking to grant tax concessions for QAII investments in textiles and bio-technology when no provision was made in the laws to facilitate these sectors, Murray said that since the agreement was signed by the Minister of Finance he was the persons to take the blame for what has since transpired.
He said that had this happened in a healthy democracy the result would have been “obvious actions” in keeping with practices of good governance.
In spite of the government’s talk of transparency and accountability, he said that there was no transparency in the QAII deal.
He noted President Bharrat Jagdeo’s warning that if companies in the forestry sector were found breaching the law they would face the consequences and he said this logic should extend to government ministers found breaking the law.
Stating that the PNCR’s policy was to attract investments, he said he does not hold any thing against any investor seeking to get the best deal for his business but as a representative of the people he said he believed it was the duty of the government to be transparent in all its transactions.
Noting that the bill was seeking to cover areas in the QAII investments that are outside of the law, he said that he had a problem with how the issues were going to be resolved since there was no provision for retroactivity. Since there is no provision, he said they would remain outside of the law when the bill was assented to. He believed there was need to restart the process to allow for retroactivity.
The bill he said was also deficient in that it lacked definitions as well. He noted that the bill also gave the minister powers that allowed for indefinite periods for tax holidays, which he objected to and for investments in certain areas to be granted concessions based on negative resolutions.
He said that concessions being granted on negative resolutions were indications of the government not being committed to transparency. He said that the investment should be brought to parliament and approval by affirmative resolution after it was debated on.
Apart from Ramjattan who did not support the bill and who noted the admission of mistakes by the government in agreeing to concessions which were not provided for in the law, TUF MP and Minister of Labour Manzoor Nadir and PPP/C MP Irfan Ally spoke in support of the bill.
The bill will enable the Minister of Finance to remit wholly or in part tax payable by any person or category of persons. This has been seen as a regressive provision as tax legislation has progressively moved away from such ministerial discretion. In 2003, the broad discretion to waive such taxes was reposed in the President and the law was amended to remove this discretion. This new amendment now confers these powers on the Minister of Finance instead.
Clause Two of the bill says that the Income Tax Act would be amended by the insertion of section 105 which says “The Minister may make regulations, subject to negative resolution of the National Assembly, to provide for the remitting wholly or in part of the tax payable by any person or category of persons on such income, in respect of any year of assessment, and in accordance with such conditions as may be specified in the regulations”.
Under Clause Three of the bill, the Income Tax (In Aid of Industry) Act will be altered to grant tax concessions to activities that create new employment in any of the following regions: 1, 7, 8, 9 and 10 and “such other regions as the minister may, by Order, subject to negative resolution of the National Assembly.
The amendment bill says that the activities which can attract concessions are as follows: non-traditional agricultural development and agro-processing, including aquaculture and production of bio-fuels; information and communications technology, not including retail and distribution; petroleum exploration, extraction and refining; tourist facilities; value-added wood processing; textile production; biotechnology; development and manufacturing of new pharmaceutical products, chemical compounds and the processing of raw materials to produce injectables; infrastructural development, including the production of electricity using renewable sources of energy; such other fields as the Minister may, by order subject to negative resolution of the National Assembly specify.
The bill will also enable tax exemptions for a period longer than ten years for “infrastructural development, including the production of electricity using renewable sources of energy”.
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Stabroek News. Posted By Staff On August 1, 2008 @ 5:28 am In News | 6 Comments
http://www.stabroeknews.com/news/qa11-concessions-bill-passed/
By Miranda La Rose
The Fiscal Enactments (Amend-ment) Bill 2008 to facilitate tax concessions for two subsidiaries of the Queens Atlantic Investment Inc (QA11) was passed in the National Assembly yesterday without the support of the opposition which felt that the amendments were defective.
AFC MP Khemraj Ramjattan also suggested that President Bharrat Jagdeo should apologise to prominent businessman Yesu Persaud for remarks made about his alleged lack of knowledge of the tax laws and for asking that other companies be given similar concessions as those granted to QAII.
Even before the bill was debated, the Speaker of the National Assembly Ralph Ramkarran called for a 15-minute suspension after AFC MP Sheila holder brought to the attention of the house that the bill was not printed in keeping the parliamentary Standing Orders.
It was discovered that only photocopies of the bill were provided for the opposition while the printed copies were given to the government MPs.
[1] Winston Murray
Winston Murray
Leading off the three-and-a-half hour debate which he expected would have been brief, Minister of Finance Dr Ashni Singh said that the amendment was necessary to remedy an error that was made when the bill was passed five years ago.
He said that with the passage of time in which circumstances would have changed it would be necessary to identify new and emerging sectors to attract investment.
The bill, he said was in keeping with strengthening the country’s fiscal and tax administration system while encouraging investment, expanding the economic base through wealth and job creation and poverty reduction.
He noted that since the government enacted the Fiscal Enactments Act in 2003 the government returned to the house several times to ensure greater responsibility in terms of fiscal concession. One such example he said was the government returning to parliament for the zero rating of a number of items that previously attracted Value Added Tax.
In wrapping up the debate Singh spoke of an attractive business climate and referred to more than ten articles published in the Stabroek News in recent years to substantiate his claim.
PNCR-1G MP Winston Murray in his presentation, noting Singh’s brevity, said he observed a lack of conviction in his arguments. Stating that the errors the minister pointed to were in the 2003 act for five years without correction, he said that he has no doubt that the amendment was to facilitate QAII to undertake certain investments which had no legal basis when the government signed the investment agreements with the investor.
There was almost complete silence in the National Assembly when Murray put forward his arguments.
Congratulating the Guyana Office for Investment for admitting to a mistake in seeking to grant tax concessions for QAII investments in textiles and bio-technology when no provision was made in the laws to facilitate these sectors, Murray said that since the agreement was signed by the Minister of Finance he was the persons to take the blame for what has since transpired.
He said that had this happened in a healthy democracy the result would have been “obvious actions” in keeping with practices of good governance.
In spite of the government’s talk of transparency and accountability, he said that there was no transparency in the QAII deal.
He noted President Bharrat Jagdeo’s warning that if companies in the forestry sector were found breaching the law they would face the consequences and he said this logic should extend to government ministers found breaking the law.
Stating that the PNCR’s policy was to attract investments, he said he does not hold any thing against any investor seeking to get the best deal for his business but as a representative of the people he said he believed it was the duty of the government to be transparent in all its transactions.
Noting that the bill was seeking to cover areas in the QAII investments that are outside of the law, he said that he had a problem with how the issues were going to be resolved since there was no provision for retroactivity. Since there is no provision, he said they would remain outside of the law when the bill was assented to. He believed there was need to restart the process to allow for retroactivity.
The bill he said was also deficient in that it lacked definitions as well. He noted that the bill also gave the minister powers that allowed for indefinite periods for tax holidays, which he objected to and for investments in certain areas to be granted concessions based on negative resolutions.
He said that concessions being granted on negative resolutions were indications of the government not being committed to transparency. He said that the investment should be brought to parliament and approval by affirmative resolution after it was debated on.
Apart from Ramjattan who did not support the bill and who noted the admission of mistakes by the government in agreeing to concessions which were not provided for in the law, TUF MP and Minister of Labour Manzoor Nadir and PPP/C MP Irfan Ally spoke in support of the bill.
The bill will enable the Minister of Finance to remit wholly or in part tax payable by any person or category of persons. This has been seen as a regressive provision as tax legislation has progressively moved away from such ministerial discretion. In 2003, the broad discretion to waive such taxes was reposed in the President and the law was amended to remove this discretion. This new amendment now confers these powers on the Minister of Finance instead.
Clause Two of the bill says that the Income Tax Act would be amended by the insertion of section 105 which says “The Minister may make regulations, subject to negative resolution of the National Assembly, to provide for the remitting wholly or in part of the tax payable by any person or category of persons on such income, in respect of any year of assessment, and in accordance with such conditions as may be specified in the regulations”.
Under Clause Three of the bill, the Income Tax (In Aid of Industry) Act will be altered to grant tax concessions to activities that create new employment in any of the following regions: 1, 7, 8, 9 and 10 and “such other regions as the minister may, by Order, subject to negative resolution of the National Assembly.
The amendment bill says that the activities which can attract concessions are as follows: non-traditional agricultural development and agro-processing, including aquaculture and production of bio-fuels; information and communications technology, not including retail and distribution; petroleum exploration, extraction and refining; tourist facilities; value-added wood processing; textile production; biotechnology; development and manufacturing of new pharmaceutical products, chemical compounds and the processing of raw materials to produce injectables; infrastructural development, including the production of electricity using renewable sources of energy; such other fields as the Minister may, by order subject to negative resolution of the National Assembly specify.
The bill will also enable tax exemptions for a period longer than ten years for “infrastructural development, including the production of electricity using renewable sources of energy”.
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URL to article: http://www.stabroeknews.com/news/qa11-concessions-bill-passed/
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Parliament approves $4.8B supplementary appropriation
Parliament approves $4.8B supplementary appropriation
Stabroek News. Posted By Staff On August 4, 2008 @ 5:12 am In News | No Comments
http://www.stabroeknews.com/news/parliament-approves-48b-supplementary-appropriation/
Parliament on Thursday approved two financial papers covering Supplementary Appropriation of $4.840 billion to meet government’s expenditure from the Consolidated Fund for the fiscal year ending December 31, 2008.
Among the funding sought and approved were sums of $3.5 billion to facilitate meeting costs related to higher fuel prices which Prime Minister Samuel Hinds explained was for the Guyana Power and Light (GPL) to subsidise consumer needs in the face of increasing fuel costs internationally.
Initially the sum of $67 million was voted for in the national budget. This was followed by the sum of $200 million being needed subsequently to meet additional costs. Hinds said that the sum of $3.5 billion was expected to cover the fuel needs for the rest of the year. Alternatively, an increase in the cost of fuel for consumers was the alternative.
Also approved were $11.7 million to rehabilitate the area of the Ministry of Culture, Youth and Sport which was damaged by fire as well as replace items damaged; $35.6 million for the construction of a building to house the Colonel Pilgrim Officers Training School at Camp Ayanganna; and $255.3 million for rehabilitation works on the GDFS Essequibo and the purchase of vehicles and other equipment.
The sum of $145.3 million was approved as subsidies to the National Milling Company to meet costs associated with cash transfers for bakeries.
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URL to article: http://www.stabroeknews.com/news/parliament-approves-48b-supplementary-appropriation/
Stabroek News. Posted By Staff On August 4, 2008 @ 5:12 am In News | No Comments
http://www.stabroeknews.com/news/parliament-approves-48b-supplementary-appropriation/
Parliament on Thursday approved two financial papers covering Supplementary Appropriation of $4.840 billion to meet government’s expenditure from the Consolidated Fund for the fiscal year ending December 31, 2008.
Among the funding sought and approved were sums of $3.5 billion to facilitate meeting costs related to higher fuel prices which Prime Minister Samuel Hinds explained was for the Guyana Power and Light (GPL) to subsidise consumer needs in the face of increasing fuel costs internationally.
Initially the sum of $67 million was voted for in the national budget. This was followed by the sum of $200 million being needed subsequently to meet additional costs. Hinds said that the sum of $3.5 billion was expected to cover the fuel needs for the rest of the year. Alternatively, an increase in the cost of fuel for consumers was the alternative.
Also approved were $11.7 million to rehabilitate the area of the Ministry of Culture, Youth and Sport which was damaged by fire as well as replace items damaged; $35.6 million for the construction of a building to house the Colonel Pilgrim Officers Training School at Camp Ayanganna; and $255.3 million for rehabilitation works on the GDFS Essequibo and the purchase of vehicles and other equipment.
The sum of $145.3 million was approved as subsidies to the National Milling Company to meet costs associated with cash transfers for bakeries.
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URL to article: http://www.stabroeknews.com/news/parliament-approves-48b-supplementary-appropriation/
Public procurement body still on hold despite June 10 deadline- Murray says PPP/C not treating it as priority
Public procurement body still on hold despite June 10 deadline- Murray says PPP/C not treating it as priority
Stabroek News. Posted By Staff On August 4, 2008 @ 5:13 am In News | 1 Comment
http://www.stabroeknews.com/news/public-procurement-body-still-on-hold-despite-june-10-deadline/
By Miranda La Rose
The PPP/C was anxious to pass the Public Procurement Bill of 2003 and to see the establishment of the Public Procurement Commission (PPC) but five years later the party appears not to know when such a commission would be constituted.
Stakeholders on security who met with President Bharrat Jagdeo on March 12, 2008 had agreed to expediting within 90 days the appointment of the commissioners to the PPC, as well as the establishment of the five rights commissions.
The June 10 deadline for the establishment of the PPC has gone but according to PNCR-1G MP Winton Murray, a member of the Public Accounts Committee, which is responsible for the nomination of the members, the PPP/C was not treating the issue as a matter of priority.
The AFC, he said, has submitted the name of one likely nominee.
Governance and security
The decision to establish the commissions, including the PPC, was taken in the wake of two brutal massacres in which 23 persons were killed at Lusignan and Bartica with the objective of strengthening governance and at the same time matters of security. Since then there has been another massacre at Lindo Creek.
PPP General Secretary Donald Ramotar said that he was there when the Procurement Bill was tabled and the party was anxious for its enactment. He said it was not a case that the PPP was not interested in the establishment of the commission or that the names the party had submitted over five years ago were withdrawn from the Public Accounts Committee. He said that some of the names of the nominees were removed because some were no longer interested in being involved on the commission because it was taking too long to be established while some have moved into other positions that now have disqualified them from serving. The list at the time included Minister of Housing Harry Narine Nawbatt.
Asked why other nominees have not been resubmitted Ramotar said, “Well I don’t know for sure. I have not been focusing on them.”
Procurement system
However, he said the fact remains that public procurement was not being done by PPP members but by professionals.
Told that some government agencies were by-passing the National Procurement and Tender Administration Board (NPTAB) in certain arrangements such as the Ministry of Health, Ramotar asked, “What about if they have been saving the government money? You never check on that?”
One of the big problems was the involvement of the multilateral financial institutions, he said, saying that in a case he remembers, one such institution operating in Guyana demanded that instead of the government buying generic drugs where it could be obtained far cheaper, that the ministry buy the drugs from companies where they had their own people.
PAC member Murray in an invited comment on the issue charged that the government was not interested in the establishment of a procurement commission because it was happy with the current situation where the tender process was wholly and solely controlled by the Ministry of Finance.
“This gives the government control over the procurement system,” he said, adding that the minister and the government were more comfortable with the persons they appoint to put on the board rather than having a commission that would be independent, impartial and that discharges its functions fairly in keeping with its constitutional mandate.
Like the PPP/C, Murray said, the PNCR-1G submitted the names of Guyanese of character including the only legal practitioner with experience in public procurement. The others included an engineer, an attorney-at-law and a chartered accountant.
He said that the PAC was still waiting on the PPP/C to resubmit the names of those who needed to be replaced so as to submit the names of the nominees to President Jagdeo for approval after they would have met with the approval of two-thirds of the majority of parliament.
The commission is to comprise five members who should have expertise in procurement, legal, financial and administrative matters but instead of identifying persons of this calibre, Murray said that the PPP/C was insisting that it has the majority of its nominees sitting on the commission.
He feels this is one of the humbugs in the nomination process.
Another reason why the party and government were not acting on the issue was that the multilateral financial institutions and the international donor community were leaving the matter unattended. This is a matter, he said, he has drawn to the international community.
“I don’t know why they are taking a hands-off approach,” he said noting, nevertheless, that recently the Organisation of American States (OAS) expressed its concerns about gaps in the procurement system here.
Fear
One of the saddest indictments on the system of procurement, he said, was the local private sector’s refusal to speak out about the unfairness of the tendering and procurement system when it affects them adversely.
Their refusal to take a public position that would appear to put the government under pressure, he said, was probably that their business or business interest would be discriminated against.
“In my respectful opinion, the President feeds that fear,” he said referring to a recent incident when the head-of-state made adverse comments about prominent businessman Yesu Persaud in public. President Jagdeo, he said, was not allowing an environment in which the business people would want to give their comments because they would always be afraid that their businesses would be adversely affected.
“They are afraid that their contracts would be withdrawn or when they bid next time they get no contracts. That is what is stifling this country and that is sad,” he said.
Article printed from Stabroek News: http://www.stabroeknews.com
URL to article: http://www.stabroeknews.com/news/public-procurement-body-still-on-hold-despite-june-10-deadline/
Stabroek News. Posted By Staff On August 4, 2008 @ 5:13 am In News | 1 Comment
http://www.stabroeknews.com/news/public-procurement-body-still-on-hold-despite-june-10-deadline/
By Miranda La Rose
The PPP/C was anxious to pass the Public Procurement Bill of 2003 and to see the establishment of the Public Procurement Commission (PPC) but five years later the party appears not to know when such a commission would be constituted.
Stakeholders on security who met with President Bharrat Jagdeo on March 12, 2008 had agreed to expediting within 90 days the appointment of the commissioners to the PPC, as well as the establishment of the five rights commissions.
The June 10 deadline for the establishment of the PPC has gone but according to PNCR-1G MP Winton Murray, a member of the Public Accounts Committee, which is responsible for the nomination of the members, the PPP/C was not treating the issue as a matter of priority.
The AFC, he said, has submitted the name of one likely nominee.
Governance and security
The decision to establish the commissions, including the PPC, was taken in the wake of two brutal massacres in which 23 persons were killed at Lusignan and Bartica with the objective of strengthening governance and at the same time matters of security. Since then there has been another massacre at Lindo Creek.
PPP General Secretary Donald Ramotar said that he was there when the Procurement Bill was tabled and the party was anxious for its enactment. He said it was not a case that the PPP was not interested in the establishment of the commission or that the names the party had submitted over five years ago were withdrawn from the Public Accounts Committee. He said that some of the names of the nominees were removed because some were no longer interested in being involved on the commission because it was taking too long to be established while some have moved into other positions that now have disqualified them from serving. The list at the time included Minister of Housing Harry Narine Nawbatt.
Asked why other nominees have not been resubmitted Ramotar said, “Well I don’t know for sure. I have not been focusing on them.”
Procurement system
However, he said the fact remains that public procurement was not being done by PPP members but by professionals.
Told that some government agencies were by-passing the National Procurement and Tender Administration Board (NPTAB) in certain arrangements such as the Ministry of Health, Ramotar asked, “What about if they have been saving the government money? You never check on that?”
One of the big problems was the involvement of the multilateral financial institutions, he said, saying that in a case he remembers, one such institution operating in Guyana demanded that instead of the government buying generic drugs where it could be obtained far cheaper, that the ministry buy the drugs from companies where they had their own people.
PAC member Murray in an invited comment on the issue charged that the government was not interested in the establishment of a procurement commission because it was happy with the current situation where the tender process was wholly and solely controlled by the Ministry of Finance.
“This gives the government control over the procurement system,” he said, adding that the minister and the government were more comfortable with the persons they appoint to put on the board rather than having a commission that would be independent, impartial and that discharges its functions fairly in keeping with its constitutional mandate.
Like the PPP/C, Murray said, the PNCR-1G submitted the names of Guyanese of character including the only legal practitioner with experience in public procurement. The others included an engineer, an attorney-at-law and a chartered accountant.
He said that the PAC was still waiting on the PPP/C to resubmit the names of those who needed to be replaced so as to submit the names of the nominees to President Jagdeo for approval after they would have met with the approval of two-thirds of the majority of parliament.
The commission is to comprise five members who should have expertise in procurement, legal, financial and administrative matters but instead of identifying persons of this calibre, Murray said that the PPP/C was insisting that it has the majority of its nominees sitting on the commission.
He feels this is one of the humbugs in the nomination process.
Another reason why the party and government were not acting on the issue was that the multilateral financial institutions and the international donor community were leaving the matter unattended. This is a matter, he said, he has drawn to the international community.
“I don’t know why they are taking a hands-off approach,” he said noting, nevertheless, that recently the Organisation of American States (OAS) expressed its concerns about gaps in the procurement system here.
Fear
One of the saddest indictments on the system of procurement, he said, was the local private sector’s refusal to speak out about the unfairness of the tendering and procurement system when it affects them adversely.
Their refusal to take a public position that would appear to put the government under pressure, he said, was probably that their business or business interest would be discriminated against.
“In my respectful opinion, the President feeds that fear,” he said referring to a recent incident when the head-of-state made adverse comments about prominent businessman Yesu Persaud in public. President Jagdeo, he said, was not allowing an environment in which the business people would want to give their comments because they would always be afraid that their businesses would be adversely affected.
“They are afraid that their contracts would be withdrawn or when they bid next time they get no contracts. That is what is stifling this country and that is sad,” he said.
Article printed from Stabroek News: http://www.stabroeknews.com
URL to article: http://www.stabroeknews.com/news/public-procurement-body-still-on-hold-despite-june-10-deadline/
Questions for Mr Sukhlal
Questions for Mr Sukhlal
Stabroek News. Posted By Staff On August 4, 2008 @ 5:07 am In Letters | No Comments
http://www.stabroeknews.com/letters/questions-for-mr-sukhlal/
Dear Editor
I refer to your letter (S/N 27/07/2008) ‘Guyana Times is not published by Global Printing & Graphics’.
Instead of dealing with the ever increasing number of issues swirling around the Guyana Times and Queens Atlantic II, its CEO Mr. Sukhlal engages in disparaging statements about me. He is free to enjoy his opinion, however malevolent or misguided. Since Mr. Sukhlal seems so informed about professionalism and so committed to ethics he should stand up to the peddling of less than half-truths by public officials with regard to transactions affecting public property and involving his paper the Guyana Times.
Mr. Sukhlal has other urgent problems requiring his attention. A good beginning would be to ensure that his paper complies with the law requiring it to state who its printers are. Then he should check on the true rent to be paid by QA II for the first five years. When he has done this he should tell his readers who look to the Beacon of truth whether it is really $50 million. Next he should expand his really suspect knowledge of the history of Sanata and when the property was “abandoned”. Such mistakes and misrepresentations raise doubt about another of his assertion – clean up cost of $1.5 bn. rather than the G$400 million the group’s principals have been telling others.
Admittedly it will cost a couple of pennies to clean up the mess caused by the distortions, misrepresentations and mistakes by his group and the public officials who at times appear to be spokespersons for the group rather than holders of the public trust.
Half-truths and misrepresentations do not fit well with the motto of the paper Mr. Sukhlal part owns. Or is that too an exaggeration of his interest?
Yours faithfully,
Chris Ram
Article printed from Stabroek News: http://www.stabroeknews.com
URL to article: http://www.stabroeknews.com/letters/questions-for-mr-sukhlal/
Stabroek News. Posted By Staff On August 4, 2008 @ 5:07 am In Letters | No Comments
http://www.stabroeknews.com/letters/questions-for-mr-sukhlal/
Dear Editor
I refer to your letter (S/N 27/07/2008) ‘Guyana Times is not published by Global Printing & Graphics’.
Instead of dealing with the ever increasing number of issues swirling around the Guyana Times and Queens Atlantic II, its CEO Mr. Sukhlal engages in disparaging statements about me. He is free to enjoy his opinion, however malevolent or misguided. Since Mr. Sukhlal seems so informed about professionalism and so committed to ethics he should stand up to the peddling of less than half-truths by public officials with regard to transactions affecting public property and involving his paper the Guyana Times.
Mr. Sukhlal has other urgent problems requiring his attention. A good beginning would be to ensure that his paper complies with the law requiring it to state who its printers are. Then he should check on the true rent to be paid by QA II for the first five years. When he has done this he should tell his readers who look to the Beacon of truth whether it is really $50 million. Next he should expand his really suspect knowledge of the history of Sanata and when the property was “abandoned”. Such mistakes and misrepresentations raise doubt about another of his assertion – clean up cost of $1.5 bn. rather than the G$400 million the group’s principals have been telling others.
Admittedly it will cost a couple of pennies to clean up the mess caused by the distortions, misrepresentations and mistakes by his group and the public officials who at times appear to be spokespersons for the group rather than holders of the public trust.
Half-truths and misrepresentations do not fit well with the motto of the paper Mr. Sukhlal part owns. Or is that too an exaggeration of his interest?
Yours faithfully,
Chris Ram
Article printed from Stabroek News: http://www.stabroeknews.com
URL to article: http://www.stabroeknews.com/letters/questions-for-mr-sukhlal/
2006 Auditor General’s report states Govt. abuses public funds… Billions unaccounted for
2006 Auditor General’s report states Govt. abuses public funds… Billions unaccounted for
Kaieteur News. August 8, 2008 | News
http://www.kaieteurnews.com/?p=4302
Despite the fact that the Auditor General Report for Guyana came in one year late, it has proved to be very revealing.
The report on the audited public accounts of Guyana and on the accounts of ministries, departments and regions for the year ending December 31, 2006 has verified a complaint by the Parliamentary Opposition parties regarding the Contingencies Fund.
According to the report presented to the National Assembly by the Auditor General, the Contingencies Fund continued to be abused, with amounts drawn from the Fund being utilised to satisfy expenditure that did not meet the eligibility criteria as defined in the Act.
“According to the statement, amounts totalling $3.945 billion were drawn from the Fund by way of 138 advances….As at 31 December 2006, forty-nine of these advances, totalling $1.721 billion, remained outstanding.”
The report, which was made public yesterday, after it was presented to the Speaker the previous week, also noted that amounts totalling $579.438M were shown as contingent liabilities for entities that were no longer in existence, yet the Ministry of Finance and the Accountant General’s Department have still not taken steps to have these liabilities transferred to the public debt.
As regards the affairs at Transport and Harbours Department (T&HD), the Department continued to request, and was granted, blanket waivers to award contract selectively. This selective tendering was done without the requisite pre-qualification of contactors and the invitation of at least three contractors to bid for these contracts.
The Georgetown Public Hospital Corporation was also cited on the executive summary, and caused raised eyebrows.
According to the Auditor General, GPHC, which is now a separate entity from the Ministry of Health, continued to use the Ministry’s Cabinet approval (funds) to purchase drugs and medical supplies from specialised agencies both local and overseas.
$608.4 M SPENT ON MEDICAL SUPPLIES. HOSPITAL CANNOT ACCOUNT FOR PURCHASES
“It did not re-tender or obtain a new no-objection from Cabinet for the purchases of drugs and medical supplies…Further, during 2006, amounts totalling $608.406M were expended on drugs and medical supplies…However, the corporation could not totally account for drugs and medical supplies purchased, since there was no central point of accountability.”
In relation to Customs and Trade Administration, the Auditor General noted 17 Permits for Immediate Delivery (PID), with a total value of $2.832 billion, had not yet been perfected at the time of the audit in January 2007.
Incoming vessels at ports in Guyana totalled 1,089. However, completed ship’s files in respect of 243 ships were not submitted to the Quality Review Section, and as such, were not made available for audit examination.
$11M PAID FOR ARMS, AMMO IN 2003, YET TO BE DELIVERED
In relation to the Ministry of Home Affairs, it was noted that a quantity of arms and ammunition, to the value of $11.160M, which were paid for in 2003, had not yet been delivered, nor has the Ministry been able to recover the amount paid.
It was also noted in the report that several ministries and departments also recorded overstatements on their appropriation accounts, and the unspent amounts have not been refunded, “…Subvention agencies not returning the unspent portions of amounts paid over to them for specific expenditure.”
The Auditor General also cited in his report what he called the overpayment of contracts.
“Several Ministries and Regions have not recovered amounts overpaid on various contracts in prior periods….In addition, some of these Ministries and Regions, such as, Education, Amerindian Affairs, Regions Two, Three, Six, Seven and Ten continued to have overpayments on various contracts during 2006…One such example was recorded under the Ministry of Education, where $10.982M was overpaid on eleven projects which were mainly for the rehabilitation and extension to schools.”
$13.6M SPENT ON HIRING VEHICLES FROM A PERSON HIRED AS A MAID
In relation to the Guyana Defence Force, it was noted that the Force continued to hire vehicles from a civilian and members of the Force. During 2006, one hundred and one payments, totalling $13.697M, were expended on hiring of vehicles owned by one civilian, who is employed as a maid, and nine members of the Guyana Defence Force.
This was a serious breach of the regulations, which strictly prohibit sponsoring of tenders for Government contracts by Government Officers.
Gifts also raised eyebrows, with the Auditor General noting that the continued lack of reporting and accounting for all gifts to Ministries, Departments and Regions resulted in the miscellaneous receipts of $2.053B at December 31, 2006 being understated by an undetermined amount.
As it relates to bank accounts, several transfers from other accounts to the Consolidated Fund were not effected, and several accounts had overdrafts.
This was documented as follows:
Transfers not effected
(i) The amount of approximately $7.190 billion, representing balances held in 13 special accounts;
(ii) The balance of $34.336M held in the General Account
(iii) The balance of $527.139M held in Non-Sub Accounting Ministries and Departments’ Bank Account
(iv) The balances of 66 inactive bank accounts, of which eight had balances in excess of $100M.
(b)Accounts with overdrafts were identified in two categories: the old Consolidated Fund bank account was overdrawn by $46.906 billion at 31 December 2006; and Forty-two inactive accounts had overdrafts totalling $685.991M. Of these accounts, 24 were overdrawn by amounts in excess of $1M.
The Fiscal Management and Accountability Act 2003 (FMA Act) provides for the regulation of the preparation and execution of the annual budget, the receipt, control and disbursement of public monies, and the accounting for public monies, and is the most vital legislation governing the transparent and efficient management of the finances of Guyana.
According to this Act, a number of Public Accounts Statements are required to be prepared and submitted.
Kaieteur News. August 8, 2008 | News
http://www.kaieteurnews.com/?p=4302
Despite the fact that the Auditor General Report for Guyana came in one year late, it has proved to be very revealing.
The report on the audited public accounts of Guyana and on the accounts of ministries, departments and regions for the year ending December 31, 2006 has verified a complaint by the Parliamentary Opposition parties regarding the Contingencies Fund.
According to the report presented to the National Assembly by the Auditor General, the Contingencies Fund continued to be abused, with amounts drawn from the Fund being utilised to satisfy expenditure that did not meet the eligibility criteria as defined in the Act.
“According to the statement, amounts totalling $3.945 billion were drawn from the Fund by way of 138 advances….As at 31 December 2006, forty-nine of these advances, totalling $1.721 billion, remained outstanding.”
The report, which was made public yesterday, after it was presented to the Speaker the previous week, also noted that amounts totalling $579.438M were shown as contingent liabilities for entities that were no longer in existence, yet the Ministry of Finance and the Accountant General’s Department have still not taken steps to have these liabilities transferred to the public debt.
As regards the affairs at Transport and Harbours Department (T&HD), the Department continued to request, and was granted, blanket waivers to award contract selectively. This selective tendering was done without the requisite pre-qualification of contactors and the invitation of at least three contractors to bid for these contracts.
The Georgetown Public Hospital Corporation was also cited on the executive summary, and caused raised eyebrows.
According to the Auditor General, GPHC, which is now a separate entity from the Ministry of Health, continued to use the Ministry’s Cabinet approval (funds) to purchase drugs and medical supplies from specialised agencies both local and overseas.
$608.4 M SPENT ON MEDICAL SUPPLIES. HOSPITAL CANNOT ACCOUNT FOR PURCHASES
“It did not re-tender or obtain a new no-objection from Cabinet for the purchases of drugs and medical supplies…Further, during 2006, amounts totalling $608.406M were expended on drugs and medical supplies…However, the corporation could not totally account for drugs and medical supplies purchased, since there was no central point of accountability.”
In relation to Customs and Trade Administration, the Auditor General noted 17 Permits for Immediate Delivery (PID), with a total value of $2.832 billion, had not yet been perfected at the time of the audit in January 2007.
Incoming vessels at ports in Guyana totalled 1,089. However, completed ship’s files in respect of 243 ships were not submitted to the Quality Review Section, and as such, were not made available for audit examination.
$11M PAID FOR ARMS, AMMO IN 2003, YET TO BE DELIVERED
In relation to the Ministry of Home Affairs, it was noted that a quantity of arms and ammunition, to the value of $11.160M, which were paid for in 2003, had not yet been delivered, nor has the Ministry been able to recover the amount paid.
It was also noted in the report that several ministries and departments also recorded overstatements on their appropriation accounts, and the unspent amounts have not been refunded, “…Subvention agencies not returning the unspent portions of amounts paid over to them for specific expenditure.”
The Auditor General also cited in his report what he called the overpayment of contracts.
“Several Ministries and Regions have not recovered amounts overpaid on various contracts in prior periods….In addition, some of these Ministries and Regions, such as, Education, Amerindian Affairs, Regions Two, Three, Six, Seven and Ten continued to have overpayments on various contracts during 2006…One such example was recorded under the Ministry of Education, where $10.982M was overpaid on eleven projects which were mainly for the rehabilitation and extension to schools.”
$13.6M SPENT ON HIRING VEHICLES FROM A PERSON HIRED AS A MAID
In relation to the Guyana Defence Force, it was noted that the Force continued to hire vehicles from a civilian and members of the Force. During 2006, one hundred and one payments, totalling $13.697M, were expended on hiring of vehicles owned by one civilian, who is employed as a maid, and nine members of the Guyana Defence Force.
This was a serious breach of the regulations, which strictly prohibit sponsoring of tenders for Government contracts by Government Officers.
Gifts also raised eyebrows, with the Auditor General noting that the continued lack of reporting and accounting for all gifts to Ministries, Departments and Regions resulted in the miscellaneous receipts of $2.053B at December 31, 2006 being understated by an undetermined amount.
As it relates to bank accounts, several transfers from other accounts to the Consolidated Fund were not effected, and several accounts had overdrafts.
This was documented as follows:
Transfers not effected
(i) The amount of approximately $7.190 billion, representing balances held in 13 special accounts;
(ii) The balance of $34.336M held in the General Account
(iii) The balance of $527.139M held in Non-Sub Accounting Ministries and Departments’ Bank Account
(iv) The balances of 66 inactive bank accounts, of which eight had balances in excess of $100M.
(b)Accounts with overdrafts were identified in two categories: the old Consolidated Fund bank account was overdrawn by $46.906 billion at 31 December 2006; and Forty-two inactive accounts had overdrafts totalling $685.991M. Of these accounts, 24 were overdrawn by amounts in excess of $1M.
The Fiscal Management and Accountability Act 2003 (FMA Act) provides for the regulation of the preparation and execution of the annual budget, the receipt, control and disbursement of public monies, and the accounting for public monies, and is the most vital legislation governing the transparent and efficient management of the finances of Guyana.
According to this Act, a number of Public Accounts Statements are required to be prepared and submitted.
Health Minister admits to buying drugs illegally
Health Minister admits to buying drugs illegally
Kaieteur News, August 10, 2008 | News.
http://www.kaieteurnews.com/?p=4420
Minister of Health, Dr. Leslie Ramsammy, yesterday admitted that his ministry made a mistake as it relates to the procurement process in purchasing drugs and medical supplies.
The recent Auditor General’s report, which was laid in Parliament on Thursday, stated that the Georgetown Public Hospital Corporation (GPHC), which is now a separate entity from the Ministry of Health, continued to use the ministry’s Cabinet approval to purchase drugs and medical supplies from specialised agencies both locally and overseas.
It was explained that, before the Procurement Bill was passed in Parliament in 2004, the Health Ministry would seek Cabinet’s approval for the purchase of the drugs and medical supplies, which, according to Dr Ramsammy, was legal.
However, when the Procurement Bill was enacted into law in 2004, the ministry had to receive the approval from the tender board.
This was not done, as the ministry continued to seek Cabinet’s consent. In essence, the Health Ministry kept breaking the law when it did not seek the tender board approval for the purchase of drugs and medical supplies totalling hundreds of millions of dollars.
The Auditor General report stated that the Health Ministry spent $608.4 million on drugs and medical supplies and could not “totally account for drugs and medical supplies.” According to Minister Ramsammy, this has now been corrected.
“The Procurement Act says that the tender board approves and that Cabinet has its chance to give its no objection. So we can’t change the recommendation, we can tell them that we don’t like the recommendation,” Minister Ramsammy noted.
He added that, “The Auditor General is not saying it’s corruption; the Auditor General is saying that it’s the process, but people are making a big deal as if some hanky panky has happened, but it’ s nothing like that,” Dr Ramsammy stressed.
The Auditor General’s report had also stated that, during 2006, amounts totalling $608.406 million were expended on drugs and medical supplies, for which the corporation could not give total accountability.
In response, Minister Ramsammy explained that when the supplies were purchased, the corporation did not have the storage space for them. In this regard, the GPHC asked the supplier to release the supplies over time.
“So, if I have ordered 100 crates and I have space for only five, I would take the five and deliver the rest later. So we took possession of the 100, but we only have five with us, and then as we move on, we take the rest. We have always accounted for our supplies,” Dr Ramsammy said.
He said that some of the drugs would be stored at a small GPHC bond and the remainder at the Health Ministry bond. When the Auditor General checked, he could not find all the drugs at the GPHC.
Dr Ramsammy said his ministry sent an explanation to the Auditor General but it would seem that the response was ignored.
The drug suppliers were identified as Pan American Health Organisation, Inter American Development Bank, Western Scientific, and the Guyana Pharmaceutical Corporation, the largest supplier accounting for some 70 per cent of all drug purchased.
He acknowledged it is true that all the supplies were not delivered at the same time, but he said that the corporation requested for it to be delivered in a staggered manner.
Kaieteur News, August 10, 2008 | News.
http://www.kaieteurnews.com/?p=4420
Minister of Health, Dr. Leslie Ramsammy, yesterday admitted that his ministry made a mistake as it relates to the procurement process in purchasing drugs and medical supplies.
The recent Auditor General’s report, which was laid in Parliament on Thursday, stated that the Georgetown Public Hospital Corporation (GPHC), which is now a separate entity from the Ministry of Health, continued to use the ministry’s Cabinet approval to purchase drugs and medical supplies from specialised agencies both locally and overseas.
It was explained that, before the Procurement Bill was passed in Parliament in 2004, the Health Ministry would seek Cabinet’s approval for the purchase of the drugs and medical supplies, which, according to Dr Ramsammy, was legal.
However, when the Procurement Bill was enacted into law in 2004, the ministry had to receive the approval from the tender board.
This was not done, as the ministry continued to seek Cabinet’s consent. In essence, the Health Ministry kept breaking the law when it did not seek the tender board approval for the purchase of drugs and medical supplies totalling hundreds of millions of dollars.
The Auditor General report stated that the Health Ministry spent $608.4 million on drugs and medical supplies and could not “totally account for drugs and medical supplies.” According to Minister Ramsammy, this has now been corrected.
“The Procurement Act says that the tender board approves and that Cabinet has its chance to give its no objection. So we can’t change the recommendation, we can tell them that we don’t like the recommendation,” Minister Ramsammy noted.
He added that, “The Auditor General is not saying it’s corruption; the Auditor General is saying that it’s the process, but people are making a big deal as if some hanky panky has happened, but it’ s nothing like that,” Dr Ramsammy stressed.
The Auditor General’s report had also stated that, during 2006, amounts totalling $608.406 million were expended on drugs and medical supplies, for which the corporation could not give total accountability.
In response, Minister Ramsammy explained that when the supplies were purchased, the corporation did not have the storage space for them. In this regard, the GPHC asked the supplier to release the supplies over time.
“So, if I have ordered 100 crates and I have space for only five, I would take the five and deliver the rest later. So we took possession of the 100, but we only have five with us, and then as we move on, we take the rest. We have always accounted for our supplies,” Dr Ramsammy said.
He said that some of the drugs would be stored at a small GPHC bond and the remainder at the Health Ministry bond. When the Auditor General checked, he could not find all the drugs at the GPHC.
Dr Ramsammy said his ministry sent an explanation to the Auditor General but it would seem that the response was ignored.
The drug suppliers were identified as Pan American Health Organisation, Inter American Development Bank, Western Scientific, and the Guyana Pharmaceutical Corporation, the largest supplier accounting for some 70 per cent of all drug purchased.
He acknowledged it is true that all the supplies were not delivered at the same time, but he said that the corporation requested for it to be delivered in a staggered manner.
OP inappropriately meets the expenditures of GINA … NCN still not adhering to Tender Board procedures
OP inappropriately meets the expenditures of GINA … NCN still not adhering to Tender Board procedures
Kaieteur News. August 10, 2008 | News
http://www.kaieteurnews.com/?p=4419
The 2006 Auditor General’s Report that was recently made public has revealed that the Office of the President continues to inappropriately meet the expenditures of the Presidential Guard, Guyana Information Agency, Castellani House and the Joint Intelligence Co-ordinating Agency from the subhead Subsidies and Contributions to Local Organisations, when they are all departments in the Office of the President.
An amount of $7M was allocated for the purchase of minibus and office equipment at GINA, and the full amount was expended on the purchase of a Toyota minibus, one computer, a digital mixer, two camcorders and two mini VCRs.
However, in this regard, there was no evidence that Tender Board procedures were followed during the acquisition of the minibus and camcorders, which respectively cost $2.2M and $3.4M.
GINA responded by stating that there was an urgent need for the acquisition of the vehicle and the editing equipment, and that a decision was made to purchase the items.
The Auditor General recommended that the Office of the President should ensure that the subvention agency adheres strictly to Section 27 of the Procurement Act regarding competitive bidding for services and purchases.
Further, it was noted that the OP has still not laid in the National Assembly the audited accounts of statutory entities under the Office of the President.
Additionally, the sum of $30.329M was expended on fuel and lubricants. It was observed that the Office of the President had made advance payments to the Guyana Oil Company and Esso Service Station for the supply of fuel, and as at December 31, 2006, Guyoil was indebted by $1.075M, while Esso Service Station was indebted by $4.843M, giving a total of $5.918M owed to the Office, which was supplied in 2007.
“As a result, the Appropriations Account was overstated by this amount.”
OP responded to the finding by the Auditor General saying that the approval of the Finance Secretary had been sought to make advance payments, and reconciliation is also now being done on a monthly basis.
The report also highlighted the fact that the National Communications Network (NCN) has still not adhered to the requirements of the Tender Board procedures regarding adjudication at the appropriate authority levels and ensured that all its assets acquired are inventoried and marked to identify them as the property of NCN, to facilitate proper accountability at all times.
During 2005, NCN procured goods and services totalling $55.132M without adherence to Tender Board procedures; and similarly in 2006, NCN purchased transmission equipment totalling $17.555M, comprising connectors, cables, antennae, power divider and amplifiers for NCN transmission centres in Georgetown and Linden. Again, this was done without adherence to Tender Board procedures.
“These items were received; however, they were not inventoried or marked to identify them as the property of NCN.”
Office and Residence of the President
The sum of $12M was allocated for the refurbishment of Castellani House and the completion of barracks and painting at State House, and a further supplementary provision in the sum of $10M was approved, giving a revised allocation of $22M.
During 2006, amounts totalling $20.325M were expended, and included in that total were sums totalling $2.414M which were expended on the completion of the Presidential Guards’ Barracks.
Additional works were budgeted for completion of the Presidential Guards’ Barracks in the sum of $3.819M, giving a revised project cost of $6.092M. However, approval for this variation was not seen. Nevertheless, the works were completed and physically verified.
The report also cited the fact that the National Procurement and Tender Board Administration had, in 2005, awarded the contract for school furniture in the sum of $36.610M.
The furniture was to be used in schools in Georgetown, Region Three (Essequibo Islands/West Demerara) and Region Four (Demerara/Mahaica).
Works under the contract began during the period under review. As at December 31, 2006, amounts totalling $16.546M were disbursed under the contract.
“Attempts to determine the quantum of furniture delivered proved futile, since records were not maintained to establish details of delivery.”
The contractor, according to the Auditor General, was contacted with a view to substantiating the transaction, and he had indicated that he had supplied furniture to the total value of $16.546M, but he could not give all the relevant details.
As such, reliance had to be placed on the certificate given by the Buildings Division of the Ministry of Education. The contract was discontinued during the period.
OP responded to the claims by saying that the Head of the Budget Agency indicated that the contractor had claimed that he supplied all the furniture and requested payment.
An examination of the records revealed that the furniture was supplied to the value of $16.546M, and as a consequence the contract was terminated and no further payments were made.
Kaieteur News. August 10, 2008 | News
http://www.kaieteurnews.com/?p=4419
The 2006 Auditor General’s Report that was recently made public has revealed that the Office of the President continues to inappropriately meet the expenditures of the Presidential Guard, Guyana Information Agency, Castellani House and the Joint Intelligence Co-ordinating Agency from the subhead Subsidies and Contributions to Local Organisations, when they are all departments in the Office of the President.
An amount of $7M was allocated for the purchase of minibus and office equipment at GINA, and the full amount was expended on the purchase of a Toyota minibus, one computer, a digital mixer, two camcorders and two mini VCRs.
However, in this regard, there was no evidence that Tender Board procedures were followed during the acquisition of the minibus and camcorders, which respectively cost $2.2M and $3.4M.
GINA responded by stating that there was an urgent need for the acquisition of the vehicle and the editing equipment, and that a decision was made to purchase the items.
The Auditor General recommended that the Office of the President should ensure that the subvention agency adheres strictly to Section 27 of the Procurement Act regarding competitive bidding for services and purchases.
Further, it was noted that the OP has still not laid in the National Assembly the audited accounts of statutory entities under the Office of the President.
Additionally, the sum of $30.329M was expended on fuel and lubricants. It was observed that the Office of the President had made advance payments to the Guyana Oil Company and Esso Service Station for the supply of fuel, and as at December 31, 2006, Guyoil was indebted by $1.075M, while Esso Service Station was indebted by $4.843M, giving a total of $5.918M owed to the Office, which was supplied in 2007.
“As a result, the Appropriations Account was overstated by this amount.”
OP responded to the finding by the Auditor General saying that the approval of the Finance Secretary had been sought to make advance payments, and reconciliation is also now being done on a monthly basis.
The report also highlighted the fact that the National Communications Network (NCN) has still not adhered to the requirements of the Tender Board procedures regarding adjudication at the appropriate authority levels and ensured that all its assets acquired are inventoried and marked to identify them as the property of NCN, to facilitate proper accountability at all times.
During 2005, NCN procured goods and services totalling $55.132M without adherence to Tender Board procedures; and similarly in 2006, NCN purchased transmission equipment totalling $17.555M, comprising connectors, cables, antennae, power divider and amplifiers for NCN transmission centres in Georgetown and Linden. Again, this was done without adherence to Tender Board procedures.
“These items were received; however, they were not inventoried or marked to identify them as the property of NCN.”
Office and Residence of the President
The sum of $12M was allocated for the refurbishment of Castellani House and the completion of barracks and painting at State House, and a further supplementary provision in the sum of $10M was approved, giving a revised allocation of $22M.
During 2006, amounts totalling $20.325M were expended, and included in that total were sums totalling $2.414M which were expended on the completion of the Presidential Guards’ Barracks.
Additional works were budgeted for completion of the Presidential Guards’ Barracks in the sum of $3.819M, giving a revised project cost of $6.092M. However, approval for this variation was not seen. Nevertheless, the works were completed and physically verified.
The report also cited the fact that the National Procurement and Tender Board Administration had, in 2005, awarded the contract for school furniture in the sum of $36.610M.
The furniture was to be used in schools in Georgetown, Region Three (Essequibo Islands/West Demerara) and Region Four (Demerara/Mahaica).
Works under the contract began during the period under review. As at December 31, 2006, amounts totalling $16.546M were disbursed under the contract.
“Attempts to determine the quantum of furniture delivered proved futile, since records were not maintained to establish details of delivery.”
The contractor, according to the Auditor General, was contacted with a view to substantiating the transaction, and he had indicated that he had supplied furniture to the total value of $16.546M, but he could not give all the relevant details.
As such, reliance had to be placed on the certificate given by the Buildings Division of the Ministry of Education. The contract was discontinued during the period.
OP responded to the claims by saying that the Head of the Budget Agency indicated that the contractor had claimed that he supplied all the furniture and requested payment.
An examination of the records revealed that the furniture was supplied to the value of $16.546M, and as a consequence the contract was terminated and no further payments were made.
Brassington confirms QA II rent at $12 -17 million annually
http://www.stabroeknews.com/features/business-page-brassington-confirms-qaii-rent/
Business Page
Posted By Christopher Ram On August 10, 2008 @ 5:09 am In Features, Sunday | No Comments
Brassington confirms QA II rent at $12 -17 million annually
Introduction
Contradicting several earlier statements about the rent the Government would be getting from the lease of 20 acres of land to Queens Atlantic Investment Inc. (QA II ), Executive Head of the Privatisation Unit and the state-owned company NICIL, Winston Brassington, in an e-mail to me last week confirmed that the rent is “between 12 -17 M per annum Yrs 2-5 and in Yr 6 (2013) it will be approximately G$45 M.”
You may very well wonder how Mr. Brassington would rent 20 acres of the most valuable land in Guyana and not know the rent by a margin of close to 50%. Having advised the Privatisation Board that the rent is $12 million only to be publicly corrected that at the rate per square foot specified in a leaked document authored by him, the amount has to be $18 million, Mr. Brassington needs to give himself ample wriggle room. This is as astounding as it is dangerous from the person who this country has placed in a position where he negotiates individually with all sorts of investors and other persons doing business with Guyana. He travelled often to Russia to negotiate with Rusal before another give-away of our country’s non-renewable resources and was mainly instrumental in the purchase of generating sets for GPL late last year costing millions of US Dollars. His recommendations are accepted by the Privatisation Board and Cabinet with the same conviction that a fundamentalist Christian would accept the Bible.
Half true
The answer about the rent came in response to persistent efforts to have Mr. Brassington confirm a number of matters that have surfaced since the tax concessions to QA II became an issue on June 5, 2008. These questions included the price and proceeds from the sale of land to Guyana Bank for Trade and Industry (GBTI) and the date of payment by John Fernandes Limited (JFL) of the sum of $320 million for land sold to that company in 2007. Mr. Brassington confirmed that GBTI paid G$201 M but in relation to the timing of the JFL proceeds he would only say that the “JFL transaction was only completed in March 2008”, which can lead to the inference that no monies were received until 2008. In fact there were two payments made by JFL in 2007 and the balance paid in 2008.
Mr Brassington has refused to answer my follow-up questions particularly about the correctness of the Privatisation Unit holding on to money that should properly have been paid into the Consolidated Fund and for information on the expenses incurred and dividends paid by the Privatisation Unit (PU). In fact all that was new from Mr. Brassington during the week was a press report of him saying that “previous privatisation processes have created ad hoc accounting processes in Guyana.” His incorrect line has been that the proceeds of privatisation have to pass through NICIL, a limited liability company which he claims incorrectly can only pay dividends into the Consolidated Fund after its accounts are audited. It seems that Mr. Brassington does not appreciate that interim dividends are permitted under corporate law and it is not unusual for companies to pay more than one such dividend during the year as Banks DIH has been doing over the past couple of years.
More abuse of the Consolidated Fund
Only monies legally due to NICIL or any of its subsidiaries would be subject to Brassington’s accounting but certainly not monies due directly to the Government such as on the sale of property including shares, land and other assets not owned by NICIL or its subsidiaries. At least some of the land sold to JFL falls into this category and the proceeds should have been paid into the Fund but are instead retained by the PU/NICIL under the control of Mr Brassington.
Mr Brassington refused to provide me with the names of the directors of NICIL or copies of its audited financial statements for the year 2006 while noting that the 2007 accounts are with the Auditor General for audit. NICIL as a company operating under the Companies Act 1991 has been in breach of that Act with respect to the filing of any annual return to the Registrar of Companies as it is required to do nor are its financial statements and reports tabled in the National Assembly.
Such disregard for the country’s supreme and other laws, for good conduct, transparency and truth would in any society where the rule of law prevails, have resulted in the most severe sanctions against those responsible. The political opposition and so-called civil society including the accounting and legal professions have a public duty to act to stop this lawlessness. What is the meaning and relevance of the Constitution and the laws if professionals could ignore them if only to show loyalty and obedience to the politicians?
Deja vu
Two years ago, this column was very critical of Mr. Brassington’s conduct in its March 12, 2006 issue when it wrote about the improper means and tactics applied to corral workers’ funds of the National Insurance Scheme and depositors’ funds of the New Building Society for the Berbice Bridge. I reported then that Mr Brassington even sought to have me postpone an article and give him time to get some necessary paperwork done by the NIS! The necessary paperwork was a letter enclosing, among other things, an irrevocable special power of attorney and requesting the NIS’s co-operation in having the voluminous agreement and four schedules signed one day later. The Privatisation Board was given the same or less time to endorse Mr Brassington’s recommendations on the QA II deal.
Just as an aside, in that March 12 article one of the subheadings was Making the unlawful lawful as we see with the QA II tax holiday law!
For all the vast proceeds from privatization that are now being boasted about, only $7.3 million was paid into the Consolidated Fund in 2006, $1.4 million in 2006. The manner of drawing up the National Estimates does not allow the reader to determine how much was paid in in 2007 or is budgeted to be paid in in 2008. Where then is the GBTI money and the JFL funds amounting to more than half a billion dollars? Is this another Lotto Fund scandal where the money is used for all sorts of unauthorized payments such as the $20 million to Courtney Benn Construction for breach of contract relating to works for the Kingston phantom hotel?
The tax seminar
Mr Brassington obviously enjoys the confidence of the President and with his control of perhaps hundreds of millions of public funds he was indeed well-placed to organise the Taxation Seminar last month. While the Seminar scored poorly on organizational arrangements – a head table of 13, no recording and just one microphone for 200 persons – it was certainly well orchestrated and controlled. The seminar was organised for a Cabinet Day so that after the Finance Minister had left the meeting with his two colleagues from Cabinet and the Privatisation Board there was no one authorised to answer questions on policy from an audience consisting of several state executives and accountants anxious to learn the tax system. Mr. Brassington gloated over the $24 billion proceeds from privatization since 1994 when he took over but he did not say that in the process the nation lost control of several key assets including Bauxite to Rusal which we then turn around and give a tax holiday! That is hardly how successful privatisations are measured.
Much was said too about transparency but let us not forget that had information not been leaked to the press there would have been no Seminar. In my contribution during the Question and Answer session I pointed to an apparent conspiracy by the PU, Go-Invest and the company to misrepresent information fed to the public on the QA II investment, drawing attention to some of the statements made by Messrs. Brassington and Da Silva and how they differ from the facts that have surfaced from documents written by Mr. Brassington and agreements signed between the QA II group and the Government.
I pointed out too that Mr. Brassington’s creative explanation for the charge to JFL compared with the rent agreed to be paid by QA II, led to no other conclusion but that the PU either overcharged JFL or was undercharging QA II.
At the Seminar, Mr. Brassington lavishly praised for their contribution to the success of the privatisation programme the Privatisation Board made up of three Cabinet Ministers including the Minister of Finance who chairs the Board, and representatives from labour, business and consumers. My enquiries suggest that even allowing for the imbalance of the political influence Mr. Brassington gets the Board to arrive at a desired result by submitting to them his recommendations often with no more than a few hours notice. I understand too that the Board has dispensed with its sub-committee that had as its principal responsibility the examination of proposals and tenders and has transferred this task entirely to Mr. Brassington with whatever political input and direction that may apply.
Different rules
Astoundingly, in a recent article in the Kaiteur News Mr. Brassington is quoted as saying that “Previous privatisation processes have created ad hoc accounting processes in Guyana” and that “What you did not have was adherence under the law of how you distribute a company’s assets.”
That this statement would have been made at a Seminar to disabuse accountants of their ignorance of the tax laws was outstanding for its sheer arrogance and uninformed ignorance! It is Mr. Brassington who does not understand the law and who created these “ad hoc” and unconstitutional arrangements that are so blatantly abused by the PU/NICIL. Has Mr. Brassington ever read the relevant sections of the Constitution or the financial rules or sought guidance on how these operate?
Where is the Auditor General?
As a non-statutory body, the Privatisation Unit is no more than part of the Ministry of Finance and so it has sought legal cover under NICIL, the state-owned company that Mr. Brassington operates without observance of the laws. Money that should constitutionally be placed into the Consolidated Fund are spent by the PU/NICIL as it now likes to call itself, to create a huge bureaucracy including legal expertise, and to by-pass the parliamentary process for authorizing the expenditure of public funds.
These are matters so significant that one would have expected the Auditor General to have paid particular attention to it and to comment critically thereon. These funds are on the same level as the Lotto Funds in that they are public monies that are required to be deposited in the Consolidated Fund under Article 216 of the Constitution. The Lotto Funds are too infamous to miss while equally huge sums of a similar nature go unnoticed by the Audit Office. In fact that Office should feel accused by Brassington’s claim of “ad hoc accounting processes”.
Conclusion – many cheques but few balances
It is clear that far from being efficient and transparent, the privatisation process is shrouded in secrecy and is managed without regard for elementary rules of good governance, the rule of law and knowledge of accounting. Much of the resources of this country have been given away in many cases for a pittance, in a process involving many cheques but few balances. This Unit and NCIL under Mr. Winston Brassington ought to be investigated by the Economics Affairs Sub-Committee of the National Assembly.
If that body fails to act, then some public-spirited citizen(s) should invoke the provisions of the Companies Act and demand an investigation of the operations of NICIL and its alliance with Mr. Brassington’s Privatisation Unit. We should not simply excuse and exonerate public officials’ improper and unlawful acts by attributing those acts to unaccountable politicians. They must be held equally accountable and culpable.
Next week we will look at the role of Go-Invest, the other partner in the saga
Article printed from Stabroek News: http://www.stabroeknews.com
URL to article: http://www.stabroeknews.com/features/business-page-brassington-confirms-qaii-rent/
Business Page
Posted By Christopher Ram On August 10, 2008 @ 5:09 am In Features, Sunday | No Comments
Brassington confirms QA II rent at $12 -17 million annually
Introduction
Contradicting several earlier statements about the rent the Government would be getting from the lease of 20 acres of land to Queens Atlantic Investment Inc. (QA II ), Executive Head of the Privatisation Unit and the state-owned company NICIL, Winston Brassington, in an e-mail to me last week confirmed that the rent is “between 12 -17 M per annum Yrs 2-5 and in Yr 6 (2013) it will be approximately G$45 M.”
You may very well wonder how Mr. Brassington would rent 20 acres of the most valuable land in Guyana and not know the rent by a margin of close to 50%. Having advised the Privatisation Board that the rent is $12 million only to be publicly corrected that at the rate per square foot specified in a leaked document authored by him, the amount has to be $18 million, Mr. Brassington needs to give himself ample wriggle room. This is as astounding as it is dangerous from the person who this country has placed in a position where he negotiates individually with all sorts of investors and other persons doing business with Guyana. He travelled often to Russia to negotiate with Rusal before another give-away of our country’s non-renewable resources and was mainly instrumental in the purchase of generating sets for GPL late last year costing millions of US Dollars. His recommendations are accepted by the Privatisation Board and Cabinet with the same conviction that a fundamentalist Christian would accept the Bible.
Half true
The answer about the rent came in response to persistent efforts to have Mr. Brassington confirm a number of matters that have surfaced since the tax concessions to QA II became an issue on June 5, 2008. These questions included the price and proceeds from the sale of land to Guyana Bank for Trade and Industry (GBTI) and the date of payment by John Fernandes Limited (JFL) of the sum of $320 million for land sold to that company in 2007. Mr. Brassington confirmed that GBTI paid G$201 M but in relation to the timing of the JFL proceeds he would only say that the “JFL transaction was only completed in March 2008”, which can lead to the inference that no monies were received until 2008. In fact there were two payments made by JFL in 2007 and the balance paid in 2008.
Mr Brassington has refused to answer my follow-up questions particularly about the correctness of the Privatisation Unit holding on to money that should properly have been paid into the Consolidated Fund and for information on the expenses incurred and dividends paid by the Privatisation Unit (PU). In fact all that was new from Mr. Brassington during the week was a press report of him saying that “previous privatisation processes have created ad hoc accounting processes in Guyana.” His incorrect line has been that the proceeds of privatisation have to pass through NICIL, a limited liability company which he claims incorrectly can only pay dividends into the Consolidated Fund after its accounts are audited. It seems that Mr. Brassington does not appreciate that interim dividends are permitted under corporate law and it is not unusual for companies to pay more than one such dividend during the year as Banks DIH has been doing over the past couple of years.
More abuse of the Consolidated Fund
Only monies legally due to NICIL or any of its subsidiaries would be subject to Brassington’s accounting but certainly not monies due directly to the Government such as on the sale of property including shares, land and other assets not owned by NICIL or its subsidiaries. At least some of the land sold to JFL falls into this category and the proceeds should have been paid into the Fund but are instead retained by the PU/NICIL under the control of Mr Brassington.
Mr Brassington refused to provide me with the names of the directors of NICIL or copies of its audited financial statements for the year 2006 while noting that the 2007 accounts are with the Auditor General for audit. NICIL as a company operating under the Companies Act 1991 has been in breach of that Act with respect to the filing of any annual return to the Registrar of Companies as it is required to do nor are its financial statements and reports tabled in the National Assembly.
Such disregard for the country’s supreme and other laws, for good conduct, transparency and truth would in any society where the rule of law prevails, have resulted in the most severe sanctions against those responsible. The political opposition and so-called civil society including the accounting and legal professions have a public duty to act to stop this lawlessness. What is the meaning and relevance of the Constitution and the laws if professionals could ignore them if only to show loyalty and obedience to the politicians?
Deja vu
Two years ago, this column was very critical of Mr. Brassington’s conduct in its March 12, 2006 issue when it wrote about the improper means and tactics applied to corral workers’ funds of the National Insurance Scheme and depositors’ funds of the New Building Society for the Berbice Bridge. I reported then that Mr Brassington even sought to have me postpone an article and give him time to get some necessary paperwork done by the NIS! The necessary paperwork was a letter enclosing, among other things, an irrevocable special power of attorney and requesting the NIS’s co-operation in having the voluminous agreement and four schedules signed one day later. The Privatisation Board was given the same or less time to endorse Mr Brassington’s recommendations on the QA II deal.
Just as an aside, in that March 12 article one of the subheadings was Making the unlawful lawful as we see with the QA II tax holiday law!
For all the vast proceeds from privatization that are now being boasted about, only $7.3 million was paid into the Consolidated Fund in 2006, $1.4 million in 2006. The manner of drawing up the National Estimates does not allow the reader to determine how much was paid in in 2007 or is budgeted to be paid in in 2008. Where then is the GBTI money and the JFL funds amounting to more than half a billion dollars? Is this another Lotto Fund scandal where the money is used for all sorts of unauthorized payments such as the $20 million to Courtney Benn Construction for breach of contract relating to works for the Kingston phantom hotel?
The tax seminar
Mr Brassington obviously enjoys the confidence of the President and with his control of perhaps hundreds of millions of public funds he was indeed well-placed to organise the Taxation Seminar last month. While the Seminar scored poorly on organizational arrangements – a head table of 13, no recording and just one microphone for 200 persons – it was certainly well orchestrated and controlled. The seminar was organised for a Cabinet Day so that after the Finance Minister had left the meeting with his two colleagues from Cabinet and the Privatisation Board there was no one authorised to answer questions on policy from an audience consisting of several state executives and accountants anxious to learn the tax system. Mr. Brassington gloated over the $24 billion proceeds from privatization since 1994 when he took over but he did not say that in the process the nation lost control of several key assets including Bauxite to Rusal which we then turn around and give a tax holiday! That is hardly how successful privatisations are measured.
Much was said too about transparency but let us not forget that had information not been leaked to the press there would have been no Seminar. In my contribution during the Question and Answer session I pointed to an apparent conspiracy by the PU, Go-Invest and the company to misrepresent information fed to the public on the QA II investment, drawing attention to some of the statements made by Messrs. Brassington and Da Silva and how they differ from the facts that have surfaced from documents written by Mr. Brassington and agreements signed between the QA II group and the Government.
I pointed out too that Mr. Brassington’s creative explanation for the charge to JFL compared with the rent agreed to be paid by QA II, led to no other conclusion but that the PU either overcharged JFL or was undercharging QA II.
At the Seminar, Mr. Brassington lavishly praised for their contribution to the success of the privatisation programme the Privatisation Board made up of three Cabinet Ministers including the Minister of Finance who chairs the Board, and representatives from labour, business and consumers. My enquiries suggest that even allowing for the imbalance of the political influence Mr. Brassington gets the Board to arrive at a desired result by submitting to them his recommendations often with no more than a few hours notice. I understand too that the Board has dispensed with its sub-committee that had as its principal responsibility the examination of proposals and tenders and has transferred this task entirely to Mr. Brassington with whatever political input and direction that may apply.
Different rules
Astoundingly, in a recent article in the Kaiteur News Mr. Brassington is quoted as saying that “Previous privatisation processes have created ad hoc accounting processes in Guyana” and that “What you did not have was adherence under the law of how you distribute a company’s assets.”
That this statement would have been made at a Seminar to disabuse accountants of their ignorance of the tax laws was outstanding for its sheer arrogance and uninformed ignorance! It is Mr. Brassington who does not understand the law and who created these “ad hoc” and unconstitutional arrangements that are so blatantly abused by the PU/NICIL. Has Mr. Brassington ever read the relevant sections of the Constitution or the financial rules or sought guidance on how these operate?
Where is the Auditor General?
As a non-statutory body, the Privatisation Unit is no more than part of the Ministry of Finance and so it has sought legal cover under NICIL, the state-owned company that Mr. Brassington operates without observance of the laws. Money that should constitutionally be placed into the Consolidated Fund are spent by the PU/NICIL as it now likes to call itself, to create a huge bureaucracy including legal expertise, and to by-pass the parliamentary process for authorizing the expenditure of public funds.
These are matters so significant that one would have expected the Auditor General to have paid particular attention to it and to comment critically thereon. These funds are on the same level as the Lotto Funds in that they are public monies that are required to be deposited in the Consolidated Fund under Article 216 of the Constitution. The Lotto Funds are too infamous to miss while equally huge sums of a similar nature go unnoticed by the Audit Office. In fact that Office should feel accused by Brassington’s claim of “ad hoc accounting processes”.
Conclusion – many cheques but few balances
It is clear that far from being efficient and transparent, the privatisation process is shrouded in secrecy and is managed without regard for elementary rules of good governance, the rule of law and knowledge of accounting. Much of the resources of this country have been given away in many cases for a pittance, in a process involving many cheques but few balances. This Unit and NCIL under Mr. Winston Brassington ought to be investigated by the Economics Affairs Sub-Committee of the National Assembly.
If that body fails to act, then some public-spirited citizen(s) should invoke the provisions of the Companies Act and demand an investigation of the operations of NICIL and its alliance with Mr. Brassington’s Privatisation Unit. We should not simply excuse and exonerate public officials’ improper and unlawful acts by attributing those acts to unaccountable politicians. They must be held equally accountable and culpable.
Next week we will look at the role of Go-Invest, the other partner in the saga
Article printed from Stabroek News: http://www.stabroeknews.com
URL to article: http://www.stabroeknews.com/features/business-page-brassington-confirms-qaii-rent/
Kaieteur News misinterprets and misrepresents Auditor General's Report
Kaieteur News misinterprets and misrepresents Auditor General's Report
Guyana Chronicle news item, Saturday 09 August 2008
The Ministry of Finance wishes to place on record its grave concern at the
misleading front page headline and story carried on page 3 of yesterday's
Kaieteur News on the contents of the Auditor General's report for 2006 (AG's
report) which was tabled in the National Assembly Thursday.
The story makes the misleading and inaccurate suggestion that the AG's
report states that Government abuses public funds and that billions of
dollars are unaccounted for, reads a statement from the Ministry of Finance.
The conclusions reached by the Kaieteur News story can only be based on a
complete lack of understanding of the issues raised by the AG's report or a
deliberate distortion of these issues. In some instances, the story attempts
to take statements made in the AG's report and convert them into scandalous
misrepresentations, the Ministry says.
"For example, the story makes reference to the AG's observation that
forty-nine contingency fund advances totalling $1.72B remained outstanding
at the end of the year. The story subtly attempts to link this to the
conclusion reflected in its headline. In fact, there is absolutely nothing
irregular about contingency fund advances that remain outstanding at the end
of the year. At any one point in time during the fiscal year, there may be
contingency fund advances outstanding. Quite clearly, where contingency fund
advances are approved close to the end of the year, such advances may remain
outstanding at the end of the year until they are cleared by a supplementary
appropriation act. This, indeed, was the case with the advances outstanding
at the end of 2006, which were cleared by a supplementary appropriation act
approved shortly thereafter. The Auditor General's statement on the amounts
outstanding at the end of the year can, by no stretch of the imagination, be
extended to be interpreted as an irregularity in relation to these amounts.
"The same is the case with a number of other issues that were reported on by
the Auditor General and which were distorted by the Kaieteur News story in a
sensational manner.
"It is most regrettable that those responsible for this story did not seek
to acquaint themselves with the nature of the issues concerned before
rushing to report sensationally on excerpts of the Auditor General's report.
The Ministry would certainly hope that Kaieteur News would take the
necessary steps in future to seek to acquire an adequate understanding of
issues before publishing reports that can create misleading impressions",
the statement from the Ministry concludes.
ENDS
Guyana Chronicle news item, Saturday 09 August 2008
The Ministry of Finance wishes to place on record its grave concern at the
misleading front page headline and story carried on page 3 of yesterday's
Kaieteur News on the contents of the Auditor General's report for 2006 (AG's
report) which was tabled in the National Assembly Thursday.
The story makes the misleading and inaccurate suggestion that the AG's
report states that Government abuses public funds and that billions of
dollars are unaccounted for, reads a statement from the Ministry of Finance.
The conclusions reached by the Kaieteur News story can only be based on a
complete lack of understanding of the issues raised by the AG's report or a
deliberate distortion of these issues. In some instances, the story attempts
to take statements made in the AG's report and convert them into scandalous
misrepresentations, the Ministry says.
"For example, the story makes reference to the AG's observation that
forty-nine contingency fund advances totalling $1.72B remained outstanding
at the end of the year. The story subtly attempts to link this to the
conclusion reflected in its headline. In fact, there is absolutely nothing
irregular about contingency fund advances that remain outstanding at the end
of the year. At any one point in time during the fiscal year, there may be
contingency fund advances outstanding. Quite clearly, where contingency fund
advances are approved close to the end of the year, such advances may remain
outstanding at the end of the year until they are cleared by a supplementary
appropriation act. This, indeed, was the case with the advances outstanding
at the end of 2006, which were cleared by a supplementary appropriation act
approved shortly thereafter. The Auditor General's statement on the amounts
outstanding at the end of the year can, by no stretch of the imagination, be
extended to be interpreted as an irregularity in relation to these amounts.
"The same is the case with a number of other issues that were reported on by
the Auditor General and which were distorted by the Kaieteur News story in a
sensational manner.
"It is most regrettable that those responsible for this story did not seek
to acquaint themselves with the nature of the issues concerned before
rushing to report sensationally on excerpts of the Auditor General's report.
The Ministry would certainly hope that Kaieteur News would take the
necessary steps in future to seek to acquire an adequate understanding of
issues before publishing reports that can create misleading impressions",
the statement from the Ministry concludes.
ENDS
Bills tabled for plea bargaining, wire tapping
Bills tabled for plea bargaining, wire tapping
Stabroek News. Posted By Staff On August 8, 2008 @ 5:13 am In News | No Comments
http://www.stabroeknews.com/news/bills-tabled-for-plea-bargaining-wire-tapping/
Five bills to sharpen the crime fight and speed the dispensing of justice were tabled in Parliament yesterday covering plea bargaining, paper committals at preliminary inquiries, taking of audio visual evidence, wiretapping and requiring the logging of information on SIM-cards and mobile phone sales.
They are expected to come up shortly for debate.
The Criminal Procedure (Plea Bargaining and Plea Agreement) Bill 2008 makes arrangements for the Director of Public Prosecutions (DPP) or any prosecutor, police prosecutor or attorney authorized by the DPP and the accused to enter into a plea agreement.
The explanatory memorandum of the bill says the proposed law “seeks to reward a person who has entered into a plea agreement and is cooperating with law enforcement authorities or whose cooperation is beneficial to the administration of criminal justice.”
Clause 5 of the bill says that a prosecutor who improperly induces an accused person to participate in plea bargaining is liable on summary conviction to a fine of $25,000 and imprisonment of five years.
Clause 8 says that a prosecutor shall obtain the views of the victim or a relative of the victim before concluding the plea bargaining unless the circumstances make it impracticable to do so.
Clause 17 states that a judge or magistrate may reject a plea agreement if he/she considers it is not in the interest of justice. Legal aid may also be granted to an accused in relation to the conduct of plea bargaining.
Paper committals
If the Criminal Law (Procedure) (Amendment) Bill 2008 is passed it will formalize so-called paper committals of accused for High Court trials instead of awaiting the end of a preliminary inquiry (PI).
Clause 2 of the bill says that the magistrate presiding over a PI “may admit as evidence on the part of the prosecutor any statements, documents, writings and other articles tendered to the court in the absence of the witness”. Sub-section two says that if the magistrate is of the view that the evidence so tendered presents an adequate case he/she may commit the accused person for trial. If the evidence does not constitute a prima facie case the accused can be discharged.
The explanatory memorandum for this bill stated: “Two purposes can be fulfilled by paper committal using …written statements instead of oral testimony alone. These statements may be employed as a means of making the committal procedure more efficient (and) for the witness, need to attend and recite his evidence is obviated and the court’s time is saved”. It added that the “use of written statements can remove from the court the task of examining the sufficiency of the evidence and thus create a mechanism which in effect, replaces the committal hearing”.
Under the Evidence (Amend-ment) Bill 2008, provisions would be made for enabling the appearance of detainees before court for obtaining bail etc from the place of detention by audio visual link.
The explanatory memorandum stated that “owing to practical difficulties, procedural requirements, lack of adequate time and heavy volume of work in courts, frequent adjournments and various other compelling reasons there has been a considerable delay and arrears in courts needing urgent attention of the government” hence the audio visual move to lessen delay and cost and “make available less expensive and speedy justice to the common man”.
It also added the use of audio visual technology would lower the security risks involved of transporting and holding in custody the persons who would be required to testify. The technology would also be used for identification parades.
Wiretapping
The Interception of Communications Bill 2008 would likely raise some civil liberties concerns and encompasses internet traffic.
The bill says at clause 2 that “intercept” for the purposes of telecommunication covers “monitoring of transmissions made by fibre optic cable or any other forms of wire line, by wireless telegraphy, voice over internet protocol, internet and all other forms of electromagnetic communication to or from the apparatus comprising the systems”.
For intercept permission to be granted, an authorized officer may apply ex parte to a judge in chambers for a warrant. Clause 4 (2) says the application for a warrant has to be accompanied by an affidavit deposing the facts or allegations necessitating the application, sufficient information for the judge to issue a warrant and other information.
The warrant under clause 5 shall authorize the tapping of communication transmitted from a private or public system to/or from one or more addresses listed in the warrant. Addresses as defined by the bill include “a location, email address, telephone number or other number or designation used for the purpose of identifying telecommunications systems or apparatus”.
A warrant can be issued for a period not exceeding 90 days and may be renewed. Where a judge is satisfied that the urgency of the circumstances warrant it he may do away with the requirement for a written application and proceed to hear an oral application which he/she may grant.
Once a warrant is issued under this section a written application and affidavit would have to be provided within 72 hours of the issuing of the warrant.
The bill would also permit as directed by the minister responsible for national security the disclosure of the intercept to a foreign government or agency of such government where there exists an agreement for the mutual exchange of information.
The unauthorized disclosure of intercepted information can lead to a fine not exceeding $5M and imprisonment for a term not exceeding three years.
The Telecommunications (Amen-dment) Bill 2008 would require providers of SIM-cards and cellular phones to establish at their own cost a system of recording and storing particulars of its SIM-cards and mobile cellular phones and the customers utilizing them.
The explanatory memorandum of the bill said that “it has been observed that mobile cellular phones are frequently used to facilitate planning and commission of serious crimes.
Also, there has been a spate of thefts of mobile devices by unscrupulous persons. In order to track these sources in the investigation by the police, the identification of the persons in possession of the cellular devices is very vital”.
A customer who sells or otherwise transfers a mobile cellular phone or SIM-card to any person other than a family member residing with him/her must convey this information to the service provider. In the case of theft or loss of a SIM-Card or cell phone the matter should be reported to the police and the service provider.
From the date of the commencement of the law there will be a 12-month period for the service provider to log and store the required information. Clause 2 (d) of the bill says the information that would have to be recorded by the service provider includes details of transactions of persons calling and persons receiving calls and the time and duration of calls.
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Stabroek News. Posted By Staff On August 8, 2008 @ 5:13 am In News | No Comments
http://www.stabroeknews.com/news/bills-tabled-for-plea-bargaining-wire-tapping/
Five bills to sharpen the crime fight and speed the dispensing of justice were tabled in Parliament yesterday covering plea bargaining, paper committals at preliminary inquiries, taking of audio visual evidence, wiretapping and requiring the logging of information on SIM-cards and mobile phone sales.
They are expected to come up shortly for debate.
The Criminal Procedure (Plea Bargaining and Plea Agreement) Bill 2008 makes arrangements for the Director of Public Prosecutions (DPP) or any prosecutor, police prosecutor or attorney authorized by the DPP and the accused to enter into a plea agreement.
The explanatory memorandum of the bill says the proposed law “seeks to reward a person who has entered into a plea agreement and is cooperating with law enforcement authorities or whose cooperation is beneficial to the administration of criminal justice.”
Clause 5 of the bill says that a prosecutor who improperly induces an accused person to participate in plea bargaining is liable on summary conviction to a fine of $25,000 and imprisonment of five years.
Clause 8 says that a prosecutor shall obtain the views of the victim or a relative of the victim before concluding the plea bargaining unless the circumstances make it impracticable to do so.
Clause 17 states that a judge or magistrate may reject a plea agreement if he/she considers it is not in the interest of justice. Legal aid may also be granted to an accused in relation to the conduct of plea bargaining.
Paper committals
If the Criminal Law (Procedure) (Amendment) Bill 2008 is passed it will formalize so-called paper committals of accused for High Court trials instead of awaiting the end of a preliminary inquiry (PI).
Clause 2 of the bill says that the magistrate presiding over a PI “may admit as evidence on the part of the prosecutor any statements, documents, writings and other articles tendered to the court in the absence of the witness”. Sub-section two says that if the magistrate is of the view that the evidence so tendered presents an adequate case he/she may commit the accused person for trial. If the evidence does not constitute a prima facie case the accused can be discharged.
The explanatory memorandum for this bill stated: “Two purposes can be fulfilled by paper committal using …written statements instead of oral testimony alone. These statements may be employed as a means of making the committal procedure more efficient (and) for the witness, need to attend and recite his evidence is obviated and the court’s time is saved”. It added that the “use of written statements can remove from the court the task of examining the sufficiency of the evidence and thus create a mechanism which in effect, replaces the committal hearing”.
Under the Evidence (Amend-ment) Bill 2008, provisions would be made for enabling the appearance of detainees before court for obtaining bail etc from the place of detention by audio visual link.
The explanatory memorandum stated that “owing to practical difficulties, procedural requirements, lack of adequate time and heavy volume of work in courts, frequent adjournments and various other compelling reasons there has been a considerable delay and arrears in courts needing urgent attention of the government” hence the audio visual move to lessen delay and cost and “make available less expensive and speedy justice to the common man”.
It also added the use of audio visual technology would lower the security risks involved of transporting and holding in custody the persons who would be required to testify. The technology would also be used for identification parades.
Wiretapping
The Interception of Communications Bill 2008 would likely raise some civil liberties concerns and encompasses internet traffic.
The bill says at clause 2 that “intercept” for the purposes of telecommunication covers “monitoring of transmissions made by fibre optic cable or any other forms of wire line, by wireless telegraphy, voice over internet protocol, internet and all other forms of electromagnetic communication to or from the apparatus comprising the systems”.
For intercept permission to be granted, an authorized officer may apply ex parte to a judge in chambers for a warrant. Clause 4 (2) says the application for a warrant has to be accompanied by an affidavit deposing the facts or allegations necessitating the application, sufficient information for the judge to issue a warrant and other information.
The warrant under clause 5 shall authorize the tapping of communication transmitted from a private or public system to/or from one or more addresses listed in the warrant. Addresses as defined by the bill include “a location, email address, telephone number or other number or designation used for the purpose of identifying telecommunications systems or apparatus”.
A warrant can be issued for a period not exceeding 90 days and may be renewed. Where a judge is satisfied that the urgency of the circumstances warrant it he may do away with the requirement for a written application and proceed to hear an oral application which he/she may grant.
Once a warrant is issued under this section a written application and affidavit would have to be provided within 72 hours of the issuing of the warrant.
The bill would also permit as directed by the minister responsible for national security the disclosure of the intercept to a foreign government or agency of such government where there exists an agreement for the mutual exchange of information.
The unauthorized disclosure of intercepted information can lead to a fine not exceeding $5M and imprisonment for a term not exceeding three years.
The Telecommunications (Amen-dment) Bill 2008 would require providers of SIM-cards and cellular phones to establish at their own cost a system of recording and storing particulars of its SIM-cards and mobile cellular phones and the customers utilizing them.
The explanatory memorandum of the bill said that “it has been observed that mobile cellular phones are frequently used to facilitate planning and commission of serious crimes.
Also, there has been a spate of thefts of mobile devices by unscrupulous persons. In order to track these sources in the investigation by the police, the identification of the persons in possession of the cellular devices is very vital”.
A customer who sells or otherwise transfers a mobile cellular phone or SIM-card to any person other than a family member residing with him/her must convey this information to the service provider. In the case of theft or loss of a SIM-Card or cell phone the matter should be reported to the police and the service provider.
From the date of the commencement of the law there will be a 12-month period for the service provider to log and store the required information. Clause 2 (d) of the bill says the information that would have to be recorded by the service provider includes details of transactions of persons calling and persons receiving calls and the time and duration of calls.
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URL to article: http://www.stabroeknews.com/news/bills-tabled-for-plea-bargaining-wire-tapping/
2006 Auditor General’s report states Govt. abuses public funds… Billions unaccounted for
2006 Auditor General’s report states Govt. abuses public funds… Billions unaccounted for
Kaieteur News. August 8, 2008 | News
http://www.kaieteurnews.com/?p=4302
Despite the fact that the Auditor General Report for Guyana came in one year late, it has proved to be very revealing.
The report on the audited public accounts of Guyana and on the accounts of ministries, departments and regions for the year ending December 31, 2006 has verified a complaint by the Parliamentary Opposition parties regarding the Contingencies Fund.
According to the report presented to the National Assembly by the Auditor General, the Contingencies Fund continued to be abused, with amounts drawn from the Fund being utilised to satisfy expenditure that did not meet the eligibility criteria as defined in the Act.
“According to the statement, amounts totalling $3.945 billion were drawn from the Fund by way of 138 advances….As at 31 December 2006, forty-nine of these advances, totalling $1.721 billion, remained outstanding.”
The report, which was made public yesterday, after it was presented to the Speaker the previous week, also noted that amounts totalling $579.438M were shown as contingent liabilities for entities that were no longer in existence, yet the Ministry of Finance and the Accountant General’s Department have still not taken steps to have these liabilities transferred to the public debt.
As regards the affairs at Transport and Harbours Department (T&HD), the Department continued to request, and was granted, blanket waivers to award contract selectively. This selective tendering was done without the requisite pre-qualification of contactors and the invitation of at least three contractors to bid for these contracts.
The Georgetown Public Hospital Corporation was also cited on the executive summary, and caused raised eyebrows.
According to the Auditor General, GPHC, which is now a separate entity from the Ministry of Health, continued to use the Ministry’s Cabinet approval (funds) to purchase drugs and medical supplies from specialised agencies both local and overseas.
$608.4 M SPENT ON MEDICAL SUPPLIES. HOSPITAL CANNOT ACCOUNT FOR PURCHASES
“It did not re-tender or obtain a new no-objection from Cabinet for the purchases of drugs and medical supplies…Further, during 2006, amounts totalling $608.406M were expended on drugs and medical supplies…However, the corporation could not totally account for drugs and medical supplies purchased, since there was no central point of accountability.”
In relation to Customs and Trade Administration, the Auditor General noted 17 Permits for Immediate Delivery (PID), with a total value of $2.832 billion, had not yet been perfected at the time of the audit in January 2007.
Incoming vessels at ports in Guyana totalled 1,089. However, completed ship’s files in respect of 243 ships were not submitted to the Quality Review Section, and as such, were not made available for audit examination.
$11M PAID FOR ARMS, AMMO IN 2003, YET TO BE DELIVERED
In relation to the Ministry of Home Affairs, it was noted that a quantity of arms and ammunition, to the value of $11.160M, which were paid for in 2003, had not yet been delivered, nor has the Ministry been able to recover the amount paid.
It was also noted in the report that several ministries and departments also recorded overstatements on their appropriation accounts, and the unspent amounts have not been refunded, “…Subvention agencies not returning the unspent portions of amounts paid over to them for specific expenditure.”
The Auditor General also cited in his report what he called the overpayment of contracts.
“Several Ministries and Regions have not recovered amounts overpaid on various contracts in prior periods….In addition, some of these Ministries and Regions, such as, Education, Amerindian Affairs, Regions Two, Three, Six, Seven and Ten continued to have overpayments on various contracts during 2006…One such example was recorded under the Ministry of Education, where $10.982M was overpaid on eleven projects which were mainly for the rehabilitation and extension to schools.”
$13.6M SPENT ON HIRING VEHICLES FROM A PERSON HIRED AS A MAID
In relation to the Guyana Defence Force, it was noted that the Force continued to hire vehicles from a civilian and members of the Force. During 2006, one hundred and one payments, totalling $13.697M, were expended on hiring of vehicles owned by one civilian, who is employed as a maid, and nine members of the Guyana Defence Force.
This was a serious breach of the regulations, which strictly prohibit sponsoring of tenders for Government contracts by Government Officers.
Gifts also raised eyebrows, with the Auditor General noting that the continued lack of reporting and accounting for all gifts to Ministries, Departments and Regions resulted in the miscellaneous receipts of $2.053B at December 31, 2006 being understated by an undetermined amount.
As it relates to bank accounts, several transfers from other accounts to the Consolidated Fund were not effected, and several accounts had overdrafts.
This was documented as follows:
Transfers not effected
(i) The amount of approximately $7.190 billion, representing balances held in 13 special accounts;
(ii) The balance of $34.336M held in the General Account
(iii) The balance of $527.139M held in Non-Sub Accounting Ministries and Departments’ Bank Account
(iv) The balances of 66 inactive bank accounts, of which eight had balances in excess of $100M.
(b)Accounts with overdrafts were identified in two categories: the old Consolidated Fund bank account was overdrawn by $46.906 billion at 31 December 2006; and Forty-two inactive accounts had overdrafts totalling $685.991M. Of these accounts, 24 were overdrawn by amounts in excess of $1M.
The Fiscal Management and Accountability Act 2003 (FMA Act) provides for the regulation of the preparation and execution of the annual budget, the receipt, control and disbursement of public monies, and the accounting for public monies, and is the most vital legislation governing the transparent and efficient management of the finances of Guyana.
According to this Act, a number of Public Accounts Statements are required to be prepared and submitted.
Kaieteur News. August 8, 2008 | News
http://www.kaieteurnews.com/?p=4302
Despite the fact that the Auditor General Report for Guyana came in one year late, it has proved to be very revealing.
The report on the audited public accounts of Guyana and on the accounts of ministries, departments and regions for the year ending December 31, 2006 has verified a complaint by the Parliamentary Opposition parties regarding the Contingencies Fund.
According to the report presented to the National Assembly by the Auditor General, the Contingencies Fund continued to be abused, with amounts drawn from the Fund being utilised to satisfy expenditure that did not meet the eligibility criteria as defined in the Act.
“According to the statement, amounts totalling $3.945 billion were drawn from the Fund by way of 138 advances….As at 31 December 2006, forty-nine of these advances, totalling $1.721 billion, remained outstanding.”
The report, which was made public yesterday, after it was presented to the Speaker the previous week, also noted that amounts totalling $579.438M were shown as contingent liabilities for entities that were no longer in existence, yet the Ministry of Finance and the Accountant General’s Department have still not taken steps to have these liabilities transferred to the public debt.
As regards the affairs at Transport and Harbours Department (T&HD), the Department continued to request, and was granted, blanket waivers to award contract selectively. This selective tendering was done without the requisite pre-qualification of contactors and the invitation of at least three contractors to bid for these contracts.
The Georgetown Public Hospital Corporation was also cited on the executive summary, and caused raised eyebrows.
According to the Auditor General, GPHC, which is now a separate entity from the Ministry of Health, continued to use the Ministry’s Cabinet approval (funds) to purchase drugs and medical supplies from specialised agencies both local and overseas.
$608.4 M SPENT ON MEDICAL SUPPLIES. HOSPITAL CANNOT ACCOUNT FOR PURCHASES
“It did not re-tender or obtain a new no-objection from Cabinet for the purchases of drugs and medical supplies…Further, during 2006, amounts totalling $608.406M were expended on drugs and medical supplies…However, the corporation could not totally account for drugs and medical supplies purchased, since there was no central point of accountability.”
In relation to Customs and Trade Administration, the Auditor General noted 17 Permits for Immediate Delivery (PID), with a total value of $2.832 billion, had not yet been perfected at the time of the audit in January 2007.
Incoming vessels at ports in Guyana totalled 1,089. However, completed ship’s files in respect of 243 ships were not submitted to the Quality Review Section, and as such, were not made available for audit examination.
$11M PAID FOR ARMS, AMMO IN 2003, YET TO BE DELIVERED
In relation to the Ministry of Home Affairs, it was noted that a quantity of arms and ammunition, to the value of $11.160M, which were paid for in 2003, had not yet been delivered, nor has the Ministry been able to recover the amount paid.
It was also noted in the report that several ministries and departments also recorded overstatements on their appropriation accounts, and the unspent amounts have not been refunded, “…Subvention agencies not returning the unspent portions of amounts paid over to them for specific expenditure.”
The Auditor General also cited in his report what he called the overpayment of contracts.
“Several Ministries and Regions have not recovered amounts overpaid on various contracts in prior periods….In addition, some of these Ministries and Regions, such as, Education, Amerindian Affairs, Regions Two, Three, Six, Seven and Ten continued to have overpayments on various contracts during 2006…One such example was recorded under the Ministry of Education, where $10.982M was overpaid on eleven projects which were mainly for the rehabilitation and extension to schools.”
$13.6M SPENT ON HIRING VEHICLES FROM A PERSON HIRED AS A MAID
In relation to the Guyana Defence Force, it was noted that the Force continued to hire vehicles from a civilian and members of the Force. During 2006, one hundred and one payments, totalling $13.697M, were expended on hiring of vehicles owned by one civilian, who is employed as a maid, and nine members of the Guyana Defence Force.
This was a serious breach of the regulations, which strictly prohibit sponsoring of tenders for Government contracts by Government Officers.
Gifts also raised eyebrows, with the Auditor General noting that the continued lack of reporting and accounting for all gifts to Ministries, Departments and Regions resulted in the miscellaneous receipts of $2.053B at December 31, 2006 being understated by an undetermined amount.
As it relates to bank accounts, several transfers from other accounts to the Consolidated Fund were not effected, and several accounts had overdrafts.
This was documented as follows:
Transfers not effected
(i) The amount of approximately $7.190 billion, representing balances held in 13 special accounts;
(ii) The balance of $34.336M held in the General Account
(iii) The balance of $527.139M held in Non-Sub Accounting Ministries and Departments’ Bank Account
(iv) The balances of 66 inactive bank accounts, of which eight had balances in excess of $100M.
(b)Accounts with overdrafts were identified in two categories: the old Consolidated Fund bank account was overdrawn by $46.906 billion at 31 December 2006; and Forty-two inactive accounts had overdrafts totalling $685.991M. Of these accounts, 24 were overdrawn by amounts in excess of $1M.
The Fiscal Management and Accountability Act 2003 (FMA Act) provides for the regulation of the preparation and execution of the annual budget, the receipt, control and disbursement of public monies, and the accounting for public monies, and is the most vital legislation governing the transparent and efficient management of the finances of Guyana.
According to this Act, a number of Public Accounts Statements are required to be prepared and submitted.
Further clarification is needed over Queens Atlantic agreements
Further clarification is needed over Queens Atlantic agreements
Posted By Staff On August 9, 2008 @ 5:04 am In Letters | No Comments
http://www.stabroeknews.com/letters/further-clarification-is-needed-over-queens-atlantic-agreements-2/
Dear Editor,
The government has taken a first step towards cleaning up the administrative mess it created when it entered into a MOU and incentive agreements with Queens Atlantic Investments Inc.
There is still however a great deal of regularizing to be done. Firstly, the government needs to clarify just what are the financial terms governing the lease arrangement. Originally, the public was told that it was for $50M per year with an option to buy for $750M. Later, it was unearthed that there was a document suggesting that the rental would be waived for the first five years. The public has a right to be informed just what are the agreed terms.
Secondly, the government needs to confirm whether it agreed to give or even gave concessions to unregistered companies. There have been some suggestions within the media that some of the companies in respect to which investment concessions have been granted have not yet been registered. If this is so then there is a great deal of explaining to be done. If, on the other hand, the companies are duly registered, the government needs to confirm this fact.
Thirdly, it should indicate just what is the relationship between the New Guyana Pharmaceutical Corporation and the new investments. If in respect to the pharmaceutical plant, the NGPC is a partner, then it will call into question whether we are dealing with a new investment or simply an expansion or consolidation of an existing one. This has implications for the interpretation of the tax holidays.
Fourthly, the government needs to inform the public as to how, if at all, it disposed of its minority shares in the NGPC.
Yours faithfully,
Salman Safee
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Copyright © 2008 Stabroek News. All rights reserved.
Posted By Staff On August 9, 2008 @ 5:04 am In Letters | No Comments
http://www.stabroeknews.com/letters/further-clarification-is-needed-over-queens-atlantic-agreements-2/
Dear Editor,
The government has taken a first step towards cleaning up the administrative mess it created when it entered into a MOU and incentive agreements with Queens Atlantic Investments Inc.
There is still however a great deal of regularizing to be done. Firstly, the government needs to clarify just what are the financial terms governing the lease arrangement. Originally, the public was told that it was for $50M per year with an option to buy for $750M. Later, it was unearthed that there was a document suggesting that the rental would be waived for the first five years. The public has a right to be informed just what are the agreed terms.
Secondly, the government needs to confirm whether it agreed to give or even gave concessions to unregistered companies. There have been some suggestions within the media that some of the companies in respect to which investment concessions have been granted have not yet been registered. If this is so then there is a great deal of explaining to be done. If, on the other hand, the companies are duly registered, the government needs to confirm this fact.
Thirdly, it should indicate just what is the relationship between the New Guyana Pharmaceutical Corporation and the new investments. If in respect to the pharmaceutical plant, the NGPC is a partner, then it will call into question whether we are dealing with a new investment or simply an expansion or consolidation of an existing one. This has implications for the interpretation of the tax holidays.
Fourthly, the government needs to inform the public as to how, if at all, it disposed of its minority shares in the NGPC.
Yours faithfully,
Salman Safee
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Opposition slams bills rushing
Stabroek News. Posted By Miranda La Rose On August 9, 2008 @ 5:17 am In News
‘Legislation requires profound consideration’
http://www.stabroeknews.com/news/opposition-slams-bills-rushing/
The PNCR-1G and the AFC are opposing an extension of the parliamentary session for five bills which they say require careful analysis and for which no special reasons have been advanced by the government.
[1] Robert Corbin
Robert Corbin
Leader of the Opposition and PNCR Leader Robert Corbin told Stabroek News yesterday that the PNCR-1G does not see it necessary to meet outside of the stipulated parliamentary sessions when there are no special reasons.
Arguing that it would be illegal for parliament to convene during the statutory recess, he said that he was writing the Speaker of the National Assembly, Ralph Ramkarran saying that the parliamentary opposition do not consider parliament would be meeting legitimately since no special reasons have been advanced by the government.
Corbin said that Prime Minister Sam Hinds wrote to him and he responded that they would not be prepared to meet during the recess because there was no special reason. Notwithstanding the parliamentary opposition’s views, he said the Prime Minister got up and in breach of the Standing Orders proceeded to adjourn the session to next Thursday.
The Leader of the Opposition said there was no emergency to warrant an extension of the parliamentary session since the five new bills could have been tabled before the recess and there is no need to rush them through parliament at this stage.
[2] Samuel Hinds
Samuel Hinds
He said that the wiretapping bill has far reaching implications for citizens and their civil liberties even though he charged that the government was already tapping telephones.
AFC Leader Raphal Trotman told Stabroek News that the AFC would not be attending parliament next week since their MPs have made plans for overseas travel which include business and vacation. He said that could not be reversed on account of the bills being tabled as part of the government’s planned legislative agenda.
“No where in the request for an extension of parliament does it state that there is a national crisis that requires the recess be put back,” he said.
More important, he said, the bills are dealing with weighty matters for which there is need for broad-based consultation, including for one that disposes of preliminary inquiries in certain cases and the wiretapping bill.
The wiretapping legislation, he said, has serious implications for people’s constitutional rights and civil liberties. “What is the rationale for pushing through with this legislation in a matter of five days,” he asked, adding that “if the government feels it alone can make the decisions, I would hope it doesn’t do so.” If the government is saying that the wiretapping legislation is urgently needed for security reasons, he said that would be a farce since he was quite aware that wiretapping was going on.
[3] Raphal Trotman
Raphal Trotman
In his letter to Hinds on August 7, Corbin said “As you would appreciate, these bills require in depth analysis, widespread consultation and profound consideration before we could reasonably respond to their thrust, import and intent.” Noting that this problem was compounded by the fact that many members of the opposition would be unavailable “we consider it unreasonable to be expected to effectively scrutinize and arrive at informed positions on these bills in such a short time, and with already depleted numbers”. Corbin therefore recommended a deferral until the parliamentary recess ends in October.
Asked for the reasons for the extension of the sessions to accommodate the bills, Ramkarran told Stabroek News that he received a letter from the Prime Minister seeking an extension of parliament for “special reasons” in keeping with Standing Order No 9.
Standing Order No 9 says that notwithstanding anything contained in Standing Order No 8, which provides for the sitting of the assembly “unless there are special reasons for so doing, no sitting of the National Assembly shall be held from 10th August to 10th October in any year.”
The special reason was for the debate of five new bills which were tabled at the last sitting.
Special reasons in his view did not set a particularly strong requirement and so he acceded to the Prime Minister’s request. He however asked that the Prime Minister confer with the opposition. While the opposition is not in agreement with the extension of the sittings into the recess period, he said he would hope that when parliament resumes on Thursday there would be full attendance. The five bills were only tabled on Thursday.
Plea bargaining
The Criminal Procedure (Plea Bargaining and Plea Agreement) Bill 2008 makes arrangements for the Director of Public Prosecutions (DPP) or any prosecutor, police prosecutor or attorney authorized by the DPP and the accused to enter into a plea agreement.
The explanatory memorandum of the bill says the proposed law “seeks to reward a person who has entered into a plea agreement and is cooperating with law enforcement authorities or whose cooperation is beneficial to the administration of criminal justice.”
Paper committals
If the Criminal Law (Procedure) (Amendment) Bill 2008 is passed it will formalize so-called paper committals of accused for High Court trials instead of awaiting the end of a preliminary inquiry (PI).
Clause 2 of the bill says that the magistrate presiding over a PI “may admit as evidence on the part of the prosecutor any statements, documents, writings and other articles tendered to the court in the absence of the witness”.
Sub-section two says that if the magistrate is of the view that the evidence so tendered presents an adequate case he/she may commit the accused person for trial. If the evidence does not constitute a prima facie case the accused
Under the Evidence (Amendment) Bill 2008, provisions would be made for enabling the appearance of detainees before court for obtaining bail etc from the place of detention by audio visual link.
Wiretapping
The Interception of Communi-cations Bill 2008 would likely raise some civil liberties concerns and encompasses internet traffic.
The bill says at clause 2 that “intercept” for the purposes of telecommunication covers “monitoring of transmissions made by fibre optic cable or any other forms of wire line, by wireless telegraphy, voice over internet protocol, internet and all other forms of electromagnetic communication to or from the apparatus comprising the systems”.
For intercept permission to be granted, an authorized officer may apply ex parte to a judge in chambers for a warrant. Clause 4 (2) says the application for a warrant has to be accompanied by an affidavit deposing the facts or allegations necessitating the application, sufficient information for the judge to issue a warrant and other information.
The warrant under clause 5 shall authorize the tapping of communication transmitted from a private or public system to/or from one or more addresses listed in the warrant. Addresses as defined by the bill include “a location, email address, telephone number or other number or designation used for the purpose of identifying telecommunications systems or apparatus”.
The Telecommunications (Amendment) Bill 2008 would require providers of SIM-cards and cellular phones to establish at their own cost a system of recording and storing particulars of its SIM-cards and mobile cellular phones and the customers utilizing them.
The explanatory memorandum of the bill said that “it has been observed that mobile cellular phones are frequently used to facilitate planning and commission of serious crimes.
Also, there has been a spate of thefts of mobile devices by unscrupulous persons. In order to track these sources in the investigation by the police, the identification of the persons in possession of the cellular devices is very vital”.
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Stabroek News. Posted By Miranda La Rose On August 9, 2008 @ 5:17 am In News
‘Legislation requires profound consideration’
http://www.stabroeknews.com/news/opposition-slams-bills-rushing/
The PNCR-1G and the AFC are opposing an extension of the parliamentary session for five bills which they say require careful analysis and for which no special reasons have been advanced by the government.
[1] Robert Corbin
Robert Corbin
Leader of the Opposition and PNCR Leader Robert Corbin told Stabroek News yesterday that the PNCR-1G does not see it necessary to meet outside of the stipulated parliamentary sessions when there are no special reasons.
Arguing that it would be illegal for parliament to convene during the statutory recess, he said that he was writing the Speaker of the National Assembly, Ralph Ramkarran saying that the parliamentary opposition do not consider parliament would be meeting legitimately since no special reasons have been advanced by the government.
Corbin said that Prime Minister Sam Hinds wrote to him and he responded that they would not be prepared to meet during the recess because there was no special reason. Notwithstanding the parliamentary opposition’s views, he said the Prime Minister got up and in breach of the Standing Orders proceeded to adjourn the session to next Thursday.
The Leader of the Opposition said there was no emergency to warrant an extension of the parliamentary session since the five new bills could have been tabled before the recess and there is no need to rush them through parliament at this stage.
[2] Samuel Hinds
Samuel Hinds
He said that the wiretapping bill has far reaching implications for citizens and their civil liberties even though he charged that the government was already tapping telephones.
AFC Leader Raphal Trotman told Stabroek News that the AFC would not be attending parliament next week since their MPs have made plans for overseas travel which include business and vacation. He said that could not be reversed on account of the bills being tabled as part of the government’s planned legislative agenda.
“No where in the request for an extension of parliament does it state that there is a national crisis that requires the recess be put back,” he said.
More important, he said, the bills are dealing with weighty matters for which there is need for broad-based consultation, including for one that disposes of preliminary inquiries in certain cases and the wiretapping bill.
The wiretapping legislation, he said, has serious implications for people’s constitutional rights and civil liberties. “What is the rationale for pushing through with this legislation in a matter of five days,” he asked, adding that “if the government feels it alone can make the decisions, I would hope it doesn’t do so.” If the government is saying that the wiretapping legislation is urgently needed for security reasons, he said that would be a farce since he was quite aware that wiretapping was going on.
[3] Raphal Trotman
Raphal Trotman
In his letter to Hinds on August 7, Corbin said “As you would appreciate, these bills require in depth analysis, widespread consultation and profound consideration before we could reasonably respond to their thrust, import and intent.” Noting that this problem was compounded by the fact that many members of the opposition would be unavailable “we consider it unreasonable to be expected to effectively scrutinize and arrive at informed positions on these bills in such a short time, and with already depleted numbers”. Corbin therefore recommended a deferral until the parliamentary recess ends in October.
Asked for the reasons for the extension of the sessions to accommodate the bills, Ramkarran told Stabroek News that he received a letter from the Prime Minister seeking an extension of parliament for “special reasons” in keeping with Standing Order No 9.
Standing Order No 9 says that notwithstanding anything contained in Standing Order No 8, which provides for the sitting of the assembly “unless there are special reasons for so doing, no sitting of the National Assembly shall be held from 10th August to 10th October in any year.”
The special reason was for the debate of five new bills which were tabled at the last sitting.
Special reasons in his view did not set a particularly strong requirement and so he acceded to the Prime Minister’s request. He however asked that the Prime Minister confer with the opposition. While the opposition is not in agreement with the extension of the sittings into the recess period, he said he would hope that when parliament resumes on Thursday there would be full attendance. The five bills were only tabled on Thursday.
Plea bargaining
The Criminal Procedure (Plea Bargaining and Plea Agreement) Bill 2008 makes arrangements for the Director of Public Prosecutions (DPP) or any prosecutor, police prosecutor or attorney authorized by the DPP and the accused to enter into a plea agreement.
The explanatory memorandum of the bill says the proposed law “seeks to reward a person who has entered into a plea agreement and is cooperating with law enforcement authorities or whose cooperation is beneficial to the administration of criminal justice.”
Paper committals
If the Criminal Law (Procedure) (Amendment) Bill 2008 is passed it will formalize so-called paper committals of accused for High Court trials instead of awaiting the end of a preliminary inquiry (PI).
Clause 2 of the bill says that the magistrate presiding over a PI “may admit as evidence on the part of the prosecutor any statements, documents, writings and other articles tendered to the court in the absence of the witness”.
Sub-section two says that if the magistrate is of the view that the evidence so tendered presents an adequate case he/she may commit the accused person for trial. If the evidence does not constitute a prima facie case the accused
Under the Evidence (Amendment) Bill 2008, provisions would be made for enabling the appearance of detainees before court for obtaining bail etc from the place of detention by audio visual link.
Wiretapping
The Interception of Communi-cations Bill 2008 would likely raise some civil liberties concerns and encompasses internet traffic.
The bill says at clause 2 that “intercept” for the purposes of telecommunication covers “monitoring of transmissions made by fibre optic cable or any other forms of wire line, by wireless telegraphy, voice over internet protocol, internet and all other forms of electromagnetic communication to or from the apparatus comprising the systems”.
For intercept permission to be granted, an authorized officer may apply ex parte to a judge in chambers for a warrant. Clause 4 (2) says the application for a warrant has to be accompanied by an affidavit deposing the facts or allegations necessitating the application, sufficient information for the judge to issue a warrant and other information.
The warrant under clause 5 shall authorize the tapping of communication transmitted from a private or public system to/or from one or more addresses listed in the warrant. Addresses as defined by the bill include “a location, email address, telephone number or other number or designation used for the purpose of identifying telecommunications systems or apparatus”.
The Telecommunications (Amendment) Bill 2008 would require providers of SIM-cards and cellular phones to establish at their own cost a system of recording and storing particulars of its SIM-cards and mobile cellular phones and the customers utilizing them.
The explanatory memorandum of the bill said that “it has been observed that mobile cellular phones are frequently used to facilitate planning and commission of serious crimes.
Also, there has been a spate of thefts of mobile devices by unscrupulous persons. In order to track these sources in the investigation by the police, the identification of the persons in possession of the cellular devices is very vital”.
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URL to article: http://www.stabroeknews.com/news/opposition-slams-bills-rushing/
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