We in Guyana ought not to be comforted by the fact that fraud and corruption in public institutions is by no means unique to us. We need only cursorily examine the Report of the Auditor General for 2008 to discover, first, that acts of fraud and corruption continue to spread like a cancer throughout state institutions and, based on the frequency of these irregularities and the astronomical amounts of money involved, that fraudulent and corrupt practices have become a virtual way of life in some institutions and, moreover, that these practices mean that we are denied resources for valuable infrastructural works, poverty support measures and social services that can bring a measure of improvement to our country and our people.

Away from Guyana, the past few months have seen the publication of a succession of international reports in which the issues of global fraud and corruption have either been the central theme of the reporting, or else, have surfaced prominently in the reports. The reports that come readily to mind include Transparency International’s 2009 Global Corruption Report, the IDB Anti Corruption Framework Review and the IDB’s Institutional Integrity Report.

Setting aside the sheer volume of the amounts which the reports say have been fraudulently diverted, they tell several other significant and deeply depressing stories. The Transparency International Report, for example, asserts that politicians and other prominent officials in developing countries illegally enrich themselves to the tune of between US$20 billion and US$40 billion annually. If the figure itself is sufficient to provoke gasps of utter incredulity, what is equally distressing is – assuming, of course, the accuracy or even near accuracy of the TI figures – that our politicians and other functionaries who are trusted to govern and to ensure the security of the respective state treasuries, are among the leading plunderers of their countries’ resources.

In the case of the IDB Institutional Integrity Report we learn that multilateral development funds assigned primarily for projects that target poor people in developing countries are also systematically ‘creamed off’ and that, sometimes, some of Bank’s own consultants are in league with the thieves. We learn too that the Bank has been forced to implement and constantly update costly measures aimed at reining in fraud and corruption, and that its additional scrutiny has resulted in suspensions or total bans being placed on individuals and entire firms from being involved in Bank-funded projects.

Here in Guyana, the Office of the Auditor General – the only truly reliable agency through which we can gain some insight into the scale of fraud and corruption inside state agencies – has recently released its 2008 Report. Frankly, and with the best will in the world, the complete chronicling of every detail of the fraud, corrupt practices and questionable procedures for financial management and chronicles detailed in the report would be a formidable challenge. One only need peruse the report, however, to discover, for example, that a majority of state agencies  transgress financial regulations and other procedures leaving gaping holes in the accountability process which, if probed forensically, may well, in many instances, unearth a trail of misappropriation of public funds. This is so particularly in those cases of the disfigurement of the tender procedures by some senior public officials to the extent that the Auditor General’s Report unambiguously states that some of the decisions to award tenders really ought to be invalidated and the overpayment of monies to private contractors in most cases will probably never be recovered.

Some instances, like those involving the Customs and Trade Administration are glaring and leave no room for speculation. This is what the Auditor General, in his 2008 Report, says about the CTU. “At the time of the audit in November 2008, two hundred and twelve allegedly fraudulent transactions totalling $301.275 million of which fifty one totaling $108 million were in relation to 2008 were uncovered at the Customs and Trade Administration.” That amounts to roughly one fraudulent act per week in 2008 involving just under $3M daily!

Then there are cases of billions of dollars which ought, correctly, to be deposited in the Consolidated Fund which, for reasons that are unclear, remain in various other bank accounts; millions of dollars in overpayments to contractors which remain un-recouped; further millions of dollars in unrecovered salary overpayments; and a $US2M balance owing on the sale of Guyana Stores since 2002 and which, up to the time of the audit, had still not been paid over to the state.

No less interesting are the discrepancies between the records of the GRA’s Internal Revenue Department regarding amounts paid into the Consolidated Fund and the Statements of Receipts and Disbursements prepared by the Ministry of Finance. In both 2007 and 2008 the amounts paid into the Consolidated Fund were significantly less than those recorded in the Finance Ministry’s records of receipts and disbursements, the difference for the two years totalling more than $100M. While the Auditor General described the GRA Commissioner General’s response to these anomalies as explanations, what the Commissioner General is reported in the Auditor’s General’s report to have said is that the Internal Revenue Department and the Ministry of Finance “are working to have the differences for 2008 identified and make the necessary adjustments.” Where is the explanation for the difference of more than $100M in the records of the Internal Revenue Department and the Ministry of Finance and exactly what “necessary adjustments” will the Internal Revenue Department and the Ministry of Finance make?

Setting aside those clear cases of fraud and corrupt transactions set out in the Auditor General’s Report it is difficult to ignore the litany of other instances in which improper transactions appear, or perhaps instances where fraud may have actually been perpetrated but has not yet been detected. Curiously, there were several cases in which neither the enquiries by the auditors in instances of questionable and/or glaringly anomalous situations or the answers provided by the particular departments appear to have been attended with a sense of great concern and urgency.

Last week, President of the Guyana Manufacturers and Services Association (GMSA) Ramesh Dookhoo told a forum on Fraud Detection and Prevention at the Tower Hotel that he believed that 95 per cent of all detected frauds in Guyana went unpunished. One wonders whether a similar implication is also present in the Auditor General’s Report given – apart from those clear instances of fraud – the litany of ill-explained and quizzical circumventions of financial regulations that have had implications for both the disbursement and accounting for state funds. This brings us to the point made in the TI Report on Global Corruption about the extent to which politicians and high officials benefit from corrupt transactions and leaves us to wonder whether, globally, those who manage the state might not regard the illegal accumulation of personal wealth to be, perhaps, an entitlement of their privileged positions.