All financial breaches and other irregularities in government...

took 15 years for the first Commissioners to be appointed. The Commission’s life ended in October 2019 but two of the five members were granted a one-year extension. Although new Commissioners have since been identified, the Assembly is yet to approve of their appointments.

Over the years, numerous procurement breaches occurred at various Ministries/ Department/Regions, with little or no evidence of any action taken against the concerned officials. Shown below are some of the breaches, as gleaned from the executive summaries of the Auditor General’s reports.

1995: Significant breaches in the Tender Board Regulations were observed, especially at the Guyana Defence Force, Ministry of Health, and Regions 3, 5, and 9. As a result, it could not be satisfactorily determined whether full value was obtained for the goods/services procured and works executed. The report strongly recommended that appropriate sanctions be taken against officers who were involved in a deliberate manipulation of the Regulations.

The Central Tender Board (CTB), the predecessor of the NPTAB, was not functioning in a manner so as to facilitate an independent review. The record-keeping and filing were completely neglected and, in particular, the minutes of the various meetings held to adjudicate on the award of major contracts were not available. Recommendations were made for a complete re-organisation of the operations of the CTB, especially as regards its composition so as to enable an appropriate balance between private sector/civil society representation and that of the public sector to be achieved, with the chairperson coming from the former.

Section 16 of the Procurement Act 2003 now provides for the appointment of members of the NPTAB - not more than five persons from the Public Service; and not more than three persons from the private sector after consultation with their representative organizations. The chairperson must be a full-time member. The current Board comprises seven members, with the chairperson being a senior official of the Ministry of Finance responsible for the monitoring of the execution of the Government’s infrastructure development projects. In September 2020, the then Minister responsible for Finance had indicated that the chairperson’s appointment would be a temporary one. Since then, no action was taken to regularize this obviously undesirable situation.

2001: Significant breaches in the Tender Board Regulations at the Guyana Defence Force were again drawn to attention. These included the absence of a system of competitive bidding and numerous instances of contract-splitting to avoid adjudication by Departmental Tender Board and/or the CTB. The former’s involvement appeared to be mere cosmetic to facilitate payments by the SubTreasury. Similar breaches occurred at the Supreme Court of Judicature, especially contract-splitting. In relation to the Ministries of Agriculture, Public Works & Communications, and Home Affairs, the basis of the award of several contracts adjudicated by the CTB could not be determined because of the unavailability of the related files.

2010: Amounts totalling $1.252 billion were paid to New GPC for the procurement of drugs and medical supplies based on the sole sourcing method approved by the NPTAB instead of open tender. Similar observations were made in relation to the Georgetown Public Hospital Corporation and the Ministry of Education Book Distribution Unit.

2017: In Regions 5 and 6, several contracts were awarded using restricted tender approach instead of open tender; while in Region 2, some contracts were incorrectly awarded using the 3-quote procurement method.

2018: In Regions 1, 5, 8, 9 and 10, several contracts were awarded using the restricted tender approach instead of open tender. Some contracts were also incorrectly awarded using the 3-quote method.

2019: In Regions 1, 2, and 6, and seven Ministries/Departments, contracts were awarded using the single source and restricted tendering methods instead of open tender.

Stores Regulations

The Stores Regulations date back to 1993 and were prepared at a time when storekeeping and stores accounting systems were largely manual. While the principles contained in this document remain valid, there is an urgent need for the Regulations to be upgraded to take into account the rapid advances in information technology since then. The main findings over the years relate to the inadequate recordkeeping of inventory items as well as assets, and the lack of proper accountability for gifts received by various government agencies.

This brings us to the status of implementation of the Integrated Financial Management System (IFMAS) which has eight modules. Implementation began in 2004. However, the Purchasing Module is yet to be implemented; while in respect of the Assets and Inventory Module, partial implementation commenced in 2018 with the reconfiguration of IFMAS into Integrated Financial Management Information System (IFMIS). Considering the slothfulness in the implementation of these two modules, accountability for inventory and fixed assets continues to remain weak.

Financial Regulations

There were also the Financial Regulations of 1955. My recollection is that they were replaced by a Financial Manual which became outdated following after the passing of the FMA Act in 2003. Considering all the discrepancies contained in the Auditor General’s reports over the years, there is an urgent need to compile a new Financial Manual to provide the necessary guidance to all responsible officials as to the detailed procedures to be followed in executing government programmes and activities. The United Nations has such a manual that sets out in detail all the financial regulations governing its operations. There are also specific rules in support of each regulation. In this way, the auditors can assess compliance and cite the relevant regulations and the specific rules that may have been breached.

Cash-based accounting versus accrual-based accounting

Several years ago, the Government had decided to implement, in a phased manner, accrual-based accounting, consistent with the International Public Sector Accounting Standards. However, little progress has been made so far. As a result, public financial management continues to operate using the cash basis of accounting inherited since Colonial times. While such a system is simple to operate and assists legislators in monitoring and controlling expenditure, it suffers from a number of setbacks. With the focus on cash transactions, accountability for on receivables, payables, inventories, fixed assets and work-in-progress, is to a large extent ignored. This is one of the main contributory factors for the acceleration of expenditure in the last quarter of the fiscal years and the drawing of cheques close to yearend to exhaust budgetary allocations.

Conclusion

Our public financial management system is in need of significant upgrade in order to ensure that the highest standards and effectiveness are place to protect public recourses from mismanagement, waste and extravagance, and corrupt behaviour. Some years ago, we had assessed the extent of leakages in our procurement system to be in the order of 20 percent. Today, that percentage could be higher. The acceleration of the full implementation of IFMAS should be urgently dealt with so that all assets are properly accounted for. We also need to move away from the cash-based system of accounting to an internationally recognized accrualbased one. The United Nations as well as many countries have adopted IPSAS or are in the process of doing so. Guyana needs to do likewise.

As regards the breaches identified in this and the two previous articles, it is our hope that the PAC will deal condignly with those found culpable. The Committee should also use its best endeavours to bring its work up-to-date. So far, it is still to examine the accounts for the years 2019 and 2020. Unless this is done, the findings of the Auditor General will keep repeating year after year.