Conclusion
Health Ministry: fire and non-cooperation
In closing last week’s column, I referred to a mystery fire on July 17, 2009 that destroyed the main office buildings of the Ministry of Health housing its Central Accounting Unit and the storage area for financial and other records. I once worked as an accounts clerk at that ministry and part of my responsibilities was the storage of records in a fireproof steel and concrete building just outside the accounting unit. It was always assumed that the storage area was fireproof.
Apart from the complete loss of a historic building that once housed Queen’s College, the Auditor General reported that the fire destroyed a “significant amount” of the ministry’s accounting records, while others became water soaked in the aftermath. The consequences of the fire were exacerbated because of the ministry’s failure to comply with circularised instructions to circulate copies of contracts together with monthly returns on contracts issued, Tender Board minutes, pay change directives, and other financial documentation to the Accountant General and Auditor General. These are serious systemic breaches that were not highlighted in earlier reports from the Audit Office and had the fire not taken place, the public would have been none the wiser about the non-compliance by the ministry.
In the aftermath of the fire the country was told by the political directorate that they knew who was behind the fire. Yet the debris was removed with undue haste precluding any forensic investigation by the experts. Now that taxpayers have more recent concerns about financial improprieties, despite the expressed knowledge of the politicians, the fire and its causes have long receded and are no longer of any public interest.
Conveniently, the failure by the management of the ministry meant that no checking could have been done on the physical verification of assets, including buildings that had been constructed or completed during the period, and possibly the reconstruction of sensitive records of the ministry. Understandably therefore, the report was only able to consider records examined prior to the fire. No wonder then that of the total of fourteen paragraphs of adverse findings by the Audit Office, only four related to current year issues. And these referred to amounts totaling $290M for capital works, purchases and non-accounting.
The report does not indicate whether the computerised records had been backed up and stored off-site as a standard precautionary measure nor does it make any recommendation on sanctions against those whose non-compliance with instructions added to suspicions about the causes of the fire.
Strange response
The report does no credit to the Audit Office however with its acceptance of inane responses to the findings of the audit. For example in paragraph 324 the issue was the final account of the new Ophthalmology Centre at Port Mourant with a revised cost of $127M. A similar situation arose in the case of the National Psychiatric Hospital rehabilitated for $44 million. The response from the ministry was that the building was completed and handed over! Could no one from the Audit Office point out that that was not the issue being raised?
In the case of $42M transferred to the Basic Needs Trust Fund for the completion of the Mabaruma District Hospital no accounts were submitted. The Ministry of Health was not reported as having responded to this concern which will be all but forgotten within a couple of months.
The Georgetown Public Hospital Corporation
The situation here is no different and there seems little effort at remedying the deficiencies which persist from year to year. Standing out as usual are 1) the non-compliance with the requirement that the corporation’s receipts be placed into the Consolidated Fund since, despite being a corporation rather than a department, it receives an appropriation rather than a subvention; and 2) sourcing drugs worth $592 million from the New GPC outside of the Procurement Act, purportedly ratified by the Cabinet.
The report does not indicate, or suggest that the authors understand how the Procurement Act deals with public corporations, the law’s provisions regarding selective tendering or the distinction between single sourcing and selective tendering. As a public corporation the GPHC is permitted to have its own rules for procurement but these must be approved by the National Tender Board. Where those rules conflict with the act, the act prevails.
On the issue of the procurement of drugs from the GPHC the report indicates that Cabinet approved in July 28, 2008 the procurement of drugs by selective tendering. The procurement from the Ramroop’s company is single sourcing. That is not a fine distinction as is evident from the Procurement Act which requires all procurement to be done by tendering, or under the exceptions set out in sections 26 to 29 of the act.
The approved exceptions are the two-stage tendering process under rigidly defined conditions; selective tendering which requires the approval of the National Tender Board; procurement by means of a request for quotations for the procurement of readily available goods; and single-source procurement, when among other things, the goods or construction are available only from a particular supplier or contractor, or a particular supplier or contractor has exclusive rights with respect to the goods or construction, and no reasonable alternative or substitute exists.
Of course none of these conditions applied but given the relationship of the supplier to the government, then the laws do not matter.
Ministry of Labour, Human Services and Social Security
This ministry is also worthy of note and of the ten paragraphs of adverse findings only one was a current year matter. One of the nine was about an investigation involving irregularities of 8,078 old age pension and social security coupons valued at $13.959M. Some of the officers implicated had made restitutions totalling $3.844M but in March 2007, the Commissioner of Police informed the ministry that based on the advice of the Director of Public Prosecution, the investigations were suspended, perhaps a euphemism for discontinued.
The report tells us of a bank account with an overdrawn balance of $271 million which had been drawn to the attention of the attention of the Finance Secretary several years ago but about which nothing had been done. Such lethargy unfortunately seems to characterise public accountability in Guyana which is once again on a downward trajectory and demands serious attention.
NICIL/Privatisation Unit
Over the years the Lottery Funds came to symbolise the more egregious features of public accountability of post-1992 Guyana, partly because the accounting for the receipt and payment of those funds were in breach of the constitution and the law. What somehow was not on the radar was the case of the Privatisation Unit which according to the Finance Secretary has been “subsumed by NICIL.” That does not appear to be factual as official publications indicate otherwise.
Whether such confusion is deliberate and the reasons for it can only be a matter of speculation but NICIL/PU has/have replaced the Lotto Funds as the source for unlawful accounting and spending of public moneys. As long ago as year 2000 the then Auditor General pointed out that divestment proceeds were not being paid over to the Consolidated Fund. Using a fig leaf, that situation has worsened many times over with not even a mention, let alone a serious comment, in recent reports.
NICIL finds easy cover from the lack of attention by the Audit Office to address this blatant outrage, from the Public Accounts Committee which appears to have overlooked this major violation, from the Registrar of Companies who has not pursued NICIL for its non-compliance with the Companies Act requirement that companies file annual returns and accounts, and from the GRA for allowing a high profile company to operate for umpteen years without any audited accounts.
Missing the forest for the trees
A strapline to the caption of this column is ‘No change.’ A review of the report shows that two hundred and sixty-one paragraphs dealt exclusively with “prior year matters which have not been resolved.” These are shown mainly in summary form. Now compare this with the new issues, each of which runs into several paragraphs but which account for a mere one hundred and sixty-six paragraphs. The total expenditure for the Office of the President (OP) and the Office of the Prime Minister (OPM) amounted in 2008 to $10 billion. Yet, for the Office of the President there are only two paragraphs in the 2008 report dealing separately with two current year issues – one in relation to Lands and Surveys and the other to GO-Invest. In other words, nothing about the discretionary spending in OP is worthy of mention. In the case of the Office of the Prime Minister, there was not a single current year issue, and the only prior year issue was in relation to the maintenance cost of four vehicles! This is unrealistic, unbelievable and just cannot be the product of either a systemic or transaction audit. It is as if the nation is being treated to a game of Trivia.
With all that is happening around us in terms of the financial probity of accounting transactions, it seems that the Audit Office does not have the capacity and or the will to undertake serious and comprehensive audits.
And even when it does any extensive work it is often about vehicle log books, telephone calls’ register, employees’ NIS registration numbers, bank reconciliations and register of books, all very important if the big picture were not as bad as it is. The Guyana Elections Commission (Gecom) and Region 4 received a disproportionate level of attention in the 2008 report in which the findings on Gecom run for 20 paragraphs of details on twelve pages, including adverse comments on expired air fresheners and Baygon. With that kind of time inevitably spent at Gecom one has to be disappointed at the absence of comments on where the real money is being spent.
Region 4 was covered in forty-three paragraphs, the highest for any budget entity and is the only section containing charts, including a pie chart of purchases from a supplier of janitorial supplies who just happened to be the spouse of the Driver/Expeditor.
What is interesting too is that unusually, the report gives extensive details of a special audit of certain purchases by the region. Why the findings of this special investigation are reported in the national report is not clear, when other special reports are supposed to be treated differently.
To be continued