Stabroek Business has learnt that senior Guyana Revenue Authority (GRA) officials whose responsibilities included administering the relationship between Fidelity and the Authority had been assigned “an inappropriate range of assignments” that could easily have led to irregularities like the fraud that is currently under investigation.
According to a source close to the GRA investigation “the structuring of roles related to excise tax administration, intelligence, risk profiling and enforcement violated cardinal principles of internal controls, checks and balances.” And according to the source those responsible for structuring the allocation of sensitive responsibilities “are, at the very least, guilty of managerial incompetence.”
The source contends that this “lack of effective controls” may even be replicated in the Authority’s multi-million dollar Integrated Tax Information System.
President Jagdeo has given a public undertaking that the investigation will “dig deep” and that it will go beyond the Fidelity fraud and the source told this newspaper that the President’s undertaking “certainly provides scope for probing the critical issue of whether some of the administrative arrangements within the GRA may not have actually incubated the Fidelity fraud.”
The source said that the question needs to be asked as to whether it was not “unwise, to say the least, to allocate certain clusters of responsibilities under any individual functionary” in an organization like the GRA.
According to the source the allocation of several sets of responsibilities which ought to serve to check and balance each other to a single official or group of officials, particularly where the administration of these responsibilities had implications for the payment or otherwise of large sums of money into the public treasury, created opportunity for wrongdoing and irregularities. “Elementary management practice dictates that these responsibilities be separated,” the source said.
The source told this newspaper that it appeared that critical responsibilities had simply been assigned en-bloc to certain officials adding that this may have contributed to the sheer scale of the Fidelity fraud.
According to the source whoever may have been directly responsible for perpetrating corrupt acts in the Fidelity fraud, an examination of the administrative environment within the GRA would reveal that “those arrangements may have actually served to facilitate the fraud.
The source told Stabroek Business that it appeared that the allocation of sensitive responsibilities was not based on proper management practice or on performance assessment but rather on “other subjective judgments.” The source added that “by the same token, some competent and professional staff of the Authority are bypassed.
According to the source there are clear indications that rather than being exposed by a system of internal checks and balances the Fidelity fraud may have been uncovered because of “a falling out among the conspirators.”
