Kaieteur News news item, Saturday 27 June 2009 - "Blatant violations of several laws uncovered" - http://www.kaieteurnewsonline.com/2009/06/27/blatant-violations-of-several-laws-uncovered/
The Auditor General’s report for 2007 on the Public Accounts of Guyana and on the accounts of the Ministries Department and Regions was made public on Thursday.
Auditor General (ag) Deodat Sharma had said that there were several issues that reoccurred in the report.
In the report, it was pointed out that the explanations for the impact of movements in the underlying economic assumptions and parameters used in the preparation of the annual budget proposals, changes to revenue policies during the year, and slippages, if any, in the delivery of the budget measures were not disclosed in the End of Year Budget Outcome and Reconciliation Report in accordance with the Fiscal Management and Accountability Act.
This, Sharma pointed out, were the reasons for the respective positive variance of $17.9B and negative variance of $7.3B between the estimates of revenue and the actual Government receipts for current and capital revenue not being resolved.
Further, the $3.8B and $2.4B over the allotments between the estimates of expenditure and the actual amount of expenditure during the year for current and capital expenditures could not be ascertained.
He noted, too, that amounts of US$1.1M, equivalent to G$209.5M disbursed as grants to various Government agencies under the United Nations Development Programme, were not incorporated into the revenue of the Public Accounts.
Again this year, the Auditor General in his report said that the Contingencies Fund continued to be abused with amounts drawn from the Fund being utilised to meet expenditures that did not meet the eligibility criteria as defined in the Act.
According to the Statement, amounts totaling $3.1B were drawn from the Fund by way of 115 advances and as at 31 December 2007, sixty-four of these advances totaling $1.459B remained outstanding.
According to Sharma’s report, amounts totaling $623.1M were shown as Contingent Liabilities for entities no longer in existence. The Ministry of Finance and the Accountant General’s Department have still not taken steps to have these liabilities transferred to the Public Debt, the report noted.
Sharma also highlighted the fact that there were several transfers from other accounts to the Consolidated Fund that were not effected. Several accounts had overdrafts.
As it relates to non-effected transfers, the report stated that approximately $7.6B representing balances held in 13 special accounts, a balance of $34.4M held in the General Account, the balance of $9.1B held in a Non-Sub Accounting Ministries and Departments Bank Account as well as 20 inactive bank accounts, of which six had balances in excess of $1M.
As it relates to the overdrafts, the report pointed out that the old Consolidated Fund bank account was overdrawn by $46.9B at the end of December 2007. A further 42 inactive accounts had overdrafts totaling $685.9M.
Of these accounts, 24 were overdrawn by amounts in excess of $1M.
The report also pointed out the continued lack of reporting and accounting for all gifts to Ministries, Departments and Regions and resulted in the Miscellaneous Receipts of $9.9B at the end of December 2007, being understated by an undetermined amount.
Again in 2007, there was a significant amount of overpayments that occurred on measured works for contracts undertaken by Ministries, Departments and Regions.
It was further pointed out that the entities are facing serious challenges in the quest to recover the amounts overpaid.
“Even more troubling is the perceived managerial action in relation to the troubling trend, since there was no evidence to suggest that disciplinary action of any kind has been meted out to engineering or other staff involved in the assessment of works in progress and the certification of progress payments.”
The Auditor General’s Report added also that the slow processing of pay change directives in several Ministries and mainly in the Regions, resulted in overpayments of salary, including related deductions that are paid over to various agencies.
“Ministries, Departments and Regions have faced serious challenges in recovering such sums, particularly because banking institutions require authorisations from account holders to do so, and statutory agencies, such as, the Guyana Revenue Authority and National Insurance Scheme have not complied with requests to refund sums overpaid.”
Some other specific findings by the Auditor General, were that the Guyana Elections Commission overstocked items of stores, resulting in considerable losses due to the expiry of large quantities and in other cases damage by water or obsolescence.
In a related matter, the Commission in April 2007, had entered into an agreement with a local firm to utilise its stock of 268 cartons of Polaroid film in order to salvage its value before the expiration date at the end of that month.
The estimated value of $30.5M is still to be recovered from the firm.
The report said that in instances, the Transport and Harbours Department (T&HD) failed to observe the requirements of the Procurement Act for its capital works and where these were observed, blanket waivers of these requirements were obtained from the National Procurement and Tender Administration Board (NPTAB).
“As a result, capital works executed on vessels were not publicly advertised, with the result that there was a failure to determine whether contracts were awarded at the most competitive prices or to the best responsive bidder.”
It was pointed out also that the Ministry of Education was exposed to great financial risks because of deficiencies in the preparation of contract documents, that rendered them powerless should contractors renege on agreements, provide substandard works or fail to show due diligence in the execution of works.
Also, in contravention of the Constitution of Guyana, a Public Procurement Commission to monitor public procurement and the procedures has not been appointed.
The Auditor General pointed out that as a consequence of the Commission not being established and in accordance with the Act, the National Board has the responsibility for the making of regulations governing the procurement of goods and services, determining the forms and documents for procurement and reporting to the Minister of Finance on the effectiveness of the procurement system, while organising training seminars regarding procurement and adjudicating debarment proceedings.