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.