Public Service Ministry accounts not audited for several years
-Auditor-General should explain, Goolsarran says
Given that there is no evidence to show that for several years prior to 2014 the accounts of the Public Service Ministry (PSM) had been audited, former Auditor-General Anand Goolsarran is calling on his successor to provide an explanation.
The PSM’s accounts have become the subject of great interest since a charge was brought against a PPP/C minister over theft of a large sum.
Goolsarran told this newspaper that for the years 2006 to 2013, there is no section in the Auditor General’s report relating to that Ministry. For 2014 and 2015, audits were hampered by the non-submission of documents in several instances and discrepancies in spending were identified while some of the items purchased could not be located.
“Considering that the Auditor-General uses the full reporting approach, as opposed to exception reporting where only discrepancies are reported, the absence of any comment on the PSM may raise doubts as to whether any audit was undertaken during these years. If no audits were undertaken, this would have given the Ministry a free reign to do whatever it wanted with the funds allocated to it. This is something that the Auditor-General needs to explain,” Goolsarran told Stabroek News recently.
Stabroek News made repeated efforts during the past few weeks to contact current Auditor-General Deodat Sharma for a comment on the auditing of the PSM but there has been no response.
The PSM came under great public scrutiny after the former minister Jennifer Westford and her aide were criminally charged with the theft of $639M over a three-year period. The case against them was dismissed last month.
The two women were accused of taking the money between the period October 19, 2011 and April 28, 2015, a period that partially falls within some years when there was no report on the PSM in the Auditor General’s report.
Stabroek News conducted a physical check of reports which are available on the Audit Office of Guyana website, http://www.audit.org.gy/reports.html#, and was able to confirm that there was no mention of the PSM for the fiscal years ending December 31, 2006 to December 31, 2013. For the fiscal years 2014 and 2015, Sharma made mention of police investigations into certain expenditures, discrepancies and lack of documents for verification purposes.
The Audit Office of Guyana is responsible for scrutinising the expenditure of public funds. The Office conducts financial audits of all publicly funded entities, including donor-funded entities, local government agencies and trade unions in Guyana.
Sharma would have conducted an audit during the following year after the relevant documents are submitted to him. The various ministries and agencies are given a chance to respond to the observations before the final report, which includes recommendations, are submitted to the Speaker of the National Assembly at the end of September.
2014
In his report for 2014, which was submitted on September 31, 2015, Sharma pointed out that the audit revealed that the sum of $671.432M was allotted for training including scholarships and a Contingency Fund Advance in the sum of
$215.520M was issued, bringing the total funds available to $886.952M. According to the Appropriation Accounts, he said, the sum of $886.951M was expended during 2014.
It was pointed out that ten InterDepartment Allocation Warrants (IDWs) totalling $652.200M were issued to the then Office of the President for payment of tuition, airfare, accommodation, stipend, allowances, etc and audit checks revealed that amounts totalling $652.013M were expended and the balance of $187,000 was refunded to the Consolidated Fund.
Sharma pointed out that there was a difference of $234.752M between the total funds allocated and the IDWs issued.
“At the time of reporting, the Guyana Police Force was conducting an investigation into expenditure relating to the InterDepartment Allocation Warrants issued,” he said. This was the investigation involving Westford and her Chief Personnel Officer Margaret Cummings
According to Sharma, the difference of $234.751M was expended on training cost ($231.554M), Purchases ($1.806M) and advertisement ($1.391M). However, due to incomplete and absence of documents and other factors, the accuracy and validity of payments could not be verified.
Included in the figure of $231.554M shown as training costs, were amounts totalling $71.798M which were paid through Republic Bank Guyana Ltd; $69.355M to the University of Guyana, $50.418M paid to the Permanent Secretary - Public Service Ministry and $39.983M paid through other banks and to other training institutions as tuition fees, airfare, accommodation, stipend, allowances and other related costs for overseas and local students. He disclosed that a certified list of the students, institutions and amounts payable for 2014, was not presented for the audit and as a result, “the completeness, accuracy and validity of the payments could not be verified.”
Sharma said that an examination of a sample of payment vouchers and supporting documents revealed that two payments totalling $4.920M were made to Classique Salon & Spa School of Cosmetology as sponsorship for 12 students to pursue a certificate in cosmetology under the Rural Community Programme. However, documentation on the attendance and completion of the course was not presented, he said, adding that as a result, it could not be determined whether the monies expended were used for the purposes intended.
LINCEP
A sum of $180,000 was recorded as payment to nine students attending the Linden Community and Empowerment Programme (LINCEP) Training Projects for Youth Empowerment during the months of June and July 2014. Audit examination of the payment voucher revealed that one person signed the emoluments claim form as receiving payment on behalf of the nine participants. In addition, there were 18 authorisations purported to be prepared by the participants of which 10 were signed by the same person who signed the emoluments claim form.
Sharma said that the Head of Budget Agency in response to his observations, explained that a request was made to Classique Salon & Spa School for a copy of the attendance register and completion date of the course and that efforts were being made to regularise the payment system.
It was recommended that the Head of Budget Agency follow-up on the request and submit the documents for audit verification
During 2014, the Ministry operated an Ordinary Imprest in the sum of $800,000, the report said while adding that the examination of the Imprest Cash Book, Advance Forms, payment vouchers and other related records revealed that 30 Imprest advances totalling $4.080M were issued to the Chief Personnel Officer and Typist Clerk II as local travel and subsistence for Ministerial visits to nine of the ten Administrative Regions. It was observed that the signature of the authorising officer was not evident on the advance forms. Additionally, examination of the payment vouchers relative to the clearing of the advances revealed that full details on the expenditure were ‘not recorded” and honour certificates were used in 21 instances instead of bills/receipts.
The Head of the Budget Agency explained that the former accounting officer was authorised to approve all advances and that all advances were appropriately cleared to the extent that Ministry’s Imprest was fully retired. The original payment vouchers, the head notified, were at the Ministry of Finance for verification.
The Audit Office, in this instance, recommended that the Head of the Budget Agency implement systems to ensure that all advances are duly authorised and adequate supporting documentation submitted for clearing of advances.
With regards to capital expenditure, the report said the sum of $9.135M was allotted for the purchasing of filing cabinets, bookshelves, water dispensers, fans, desks, currency counter, generator, fire extinguishers and air conditioning unit. According to the Appropriation Accounts, amounts totalling $8.832M were expended. A physical verification of the items purchased by the Ministry revealed that in August 2015, five solid wooden desks with double drawers with a cost of $375,000 were not received by the Ministry. Further, the location/s of two book shelves with a cost of $87,696 were not stated on the document presented. As a result, the report said that it was impossible to verify their existence.
In response, the Head of the Budget Agency explained that the supplier of the wooden desks was written to deliver same and he indicated his intent to supply all desks by 25 September 2015 since his business was ruined by floods and the desks were damaged. It was also indicated that the book shelves were secured in Westford’s office. “However, a check after National Elections on 11 May 2015 revealed that they could not be located,” the report said.
It was recommended the Head of the Budget Agency ensure that the items paid for are supplied and recorded in the records of the Ministry.
The report also noted that the sum of $2.5M was allotted for the rehabilitation of the head office. According to the Appropriation Accounts, the sum of $2.349M was expended during 2014. A contract was awarded by the National Procurement and Tender Administration Board (NPTAB) in the sum of $2.349M for the rehabilitation of the Minister’s office and windows. Examination of the bill of quantities revealed that the works included the supply and installation of one 24000 - BTU air conditioning unit at a cost of $265,500. In the absence of details on the location of the unit, it could not have been physically verified, the report said.
The Head of the Budget Agency explained that the air conditioning unit was not at the time installed but secured in the former Minister’s Office. “However, a check after National Elections on 11 May 2015 revealed that the air [conditioning] unit could not be located,” the report said before recommending that the Head of the Budget Agency ensure that the item paid for is supplied, installed and properly accounted for in the books of the Ministry.
Comprehensive review
Goolsarran said that a complete investigation of $18M representing financial assistance for students studying in Cuba, as detailed in the 2015 report, is required.
“Given this, one would have thought that a comprehensive and in-depth review should have been carried out of the operations of PSM,” he said.
The report said that at the time of reporting, matters involving expenditure totalling $120.727M in respect of payments for Financial Assistance for Public Service Performance Evaluation in the ten Administrative Regions were attracting the attention of the Courts. At the same time, the Audit Office was also conducting an investigation into a transaction amounting to $18.9M for the payment of financial assistance for students studying in Cuba. The report said that the Head of the Budget Agency explained that there is an ongoing investigation into the matter.
The report noted that issues concerning the $886M allocation in 2014 were not yet resolved with matters involving $244M continuing to attract the attention of the Court. It said that the Head of the Budget Agency acknowledged the finding as a result of which the Audit Office recommended that the matter be pursued to finality and that stricter measures be put in place to prevent a recurrence.
The report said that during 2015, the sum of $915.329M was allotted for training including scholarships. Two Allotment Transfers totalling $36.833M were made reducing the total funds available to $878.496M. According to the Appropriation Accounts, the sum of $772.065M was expended during 2015.
Five IDWs totalling $271M were issued to the Office of the President for payment of tuition, airfare, accommodation, stipend, allowances, etc. Audit checks revealed that amounts totalling $261.759M were expended and the balance of $9.241M remained in the Consolidated Fund, the report said.
Audit examination of the Register of Students revealed that pertinent information such as benefits and allowances payable to the students were not recorded. In addition, it was also observed that all the institutions to which the Ministry pays tuition fees were not recorded in the register, the report said. “In the circumstance, reliance could not be placed on the accuracy of the information in the Register,” it said. The Head of the Budget Agency, in response explained that the Register is continuously being improved. It was recommended that the Head of the Budget Agency ensures that all pertinent information is recorded in the Register of Students.
The report for 2016 made no mention of the ministry.
Role
Meanwhile, Goolsarran told Stabroek News that the Public Accounts Committee (PAC) has a role to play in ensuring that the Audit Office carries out “greater scrutiny of the operations of Ministries and Departments where the risk of irregularities occurring is considered high.” He said that this is what the “risk-based” approach to auditing is all about.
PPP’s PAC representative Juan Edghill, had told this newspaper that the issue of the missing money could not be raised at the level of the PAC because it may not be within its mandate. “I guess, our mandate is limited to the reports that come before us. If there is no query, there is no report that initiates a discussion on this particular matter, I don’t think there is anything that the PAC can do,” he had said.
He had emphasised that the PAC cannot request that the matter be investigated. “I don’t know that to be a mandate…Our powers are derived based upon the reports whether it is a statutory body or the Auditor-General report for public agencies,” he had said.
Edghill had posited that the alleged theft should have been investigated by both the Office of the Auditor General and the Accountant General and pointed out that the absence of this element raises questions. The former junior Finance Minister indicated that neither of these officials raised this particular matter with the committee.
According to Parliament’s website, among the Committee’s responsibilities is the examination of audited accounts, as presented in the Auditor-General’s Report, showing the “appropriation of sums granted by the National Assembly to meet public expenditure and such other accounts laid before the Assembly as the Assembly may refer to it” and the exercising of general supervision over the functioning of the Auditor-General in accordance with the law.
On February 1, 2016 Westford and Cummings were slapped with a total of 24 counts of larceny by a public officer and after they denied the charges, they were granted $200,000 bail on each charge, amounting to a total of $4.8 million to be paid to the court. Based on the available information, the charges stemmed from a police investigation and were based on a review of the case by the Director of Public Prosecutions (DPP). There is nothing to indicate that either the AuditorGeneral or the Accountant-General conducted a separate investigation.
It was alleged that between the period October 19th, 2011 and April 28th, 2015, they stole a total of $639,420,000, belonging to the Government of Guyana, which they received by virtue of employment.
On August 24th, all the charges were dismissed as the magistrate found that they were “bad in law.” Notice of an appeal of the decision has been served.