City Hall has been asked to respond to the findings of a recent probe that suggest major fraud in its operations, including “phantom” workers on the payroll, payments to front companies and abuse of its assets.
The probe is part of the work of a committee set up to assess progress by the city—revealed to be none on Thursday—in implementing key reforms that came out of the Keith Burrowes Inquiry into the municipality’s operations.
In response to the findings, Georgetown Mayor Hamilton Green yesterday said that he had written the Auditor General requesting a forensic audit of the relevant sections of City Hall.
“We have no doubt that these are the facts. However, we cannot make a firm conclusion until we give the council the right to respond,” Burrowes told a news conference on Thursday. “There will be three people, we refer to them as ‘Mafia,’ [they] will have to go home,” he added of the likely fallout of the findings. He said that Town Clerk Yonnete Pluck-Cort was given a week to register the council’s response to the report.
Green yesterday said that the report highlighted a number of troubling issues, adding that most of it had already been dealt with by the council. Green also said that he has written to the Auditor General, requesting thorough forensic audit.
“I want to make it pellucid and clear that, and I believe I can speak on behalf of the council, we are not prepared to condone nor contribute to any form of impropriety, lawlessness, corruption or venality. Particularly, in the circumstances where corruption at very high level seem to be the order of the day,” Green declared, while noting that there have been much concern about city hall’s management.
Burrowes, who was accompanied by Local Government Minister Ganga Persaud, Junior Minister Norman Whittaker and Permanent Secretary Colin Croal on Thursday, also reported that City Hall is yet to act on any of the recommendations of the Commission of Inquiry and he said the failure to do so was intentional. “I’ve concluded that it’s not incompetence but they just don’t want to implement these recommendations,” Burrowes said. “Low and behold, after giving them equipment—a number of computers and software among a number of other things—they have not implemented not one of the recommendations,” he lamented.
Green, who yesterday said the council accepts the report in its entirety, also acknowledged none of the 40 recommendations that resulted from the Commission of Inquiry have been implemented and he blamed it on the council’s inability to discipline officers.
‘Phantom worker,
dummy companies’
The fraud in the city’s operations was uncovered by Raymon Gaskin, who is a member of the Implementation Committee. Burrowes said the findings suggested that half of 800 members of staff were “phantoms.” “We discovered that about 400 of those persons are phantoms. In other words, instances where we thought persons signed cheques, they just deposited monies,” Burrowes said.
He noted that a recommendation was made to Minister Persaud to have an extensive exercise completed that will match each member of staff with a picture on the council’s system in order to prove their identity when collecting salaries. However, he said they were told that every staff member has an identification card for this purpose. Burrowes said he is still insisting that the system be changed.
Burrowes also reported that it was discovered that the council has been conducting business with “dummy companies” that were unlisted and unregistered. “There were a couple of companies that they’ve done business with [that] do not have an address or telephone number. This is very unusual,” he said.
“One cheque was prepared for $8M and on the invoice they asked that the cheque be prepared to a Miss McDonald. If an entity like City Council engages another company, it is highly unusual that the cheque would be prepared to an individual; it must be prepared to the company. We found out that there are a number of other companies that they use that are dummy companies,” Burrowes revealed.
He also suggested collusion between city staff and persons that are awarded contracts. Some time ago, government provided the council with four new garbage trucks. However, after a recent check, only one of the council’s fleet of seven trucks is working.
“These are new trucks. We started to look as to why [they were not working] and it led us to believe that it was deliberate to have these trucks lined up because then you would have to contract other vehicles and we are now seeing a link between some members of the council and these other persons,” Burrowes said.
Abuses
Overtime paid to workers and gas and diesel issued were also found to be “unbelievably high,” and it is suggested in the case of the latter that the fuel is not only going to city vehicles.
“We’ve given them a bus under the HIV programme but we take it back because it is not being used for that purpose. They complain how they ain’t got computer, we give them about eight to ten computer and none of these things ain’t working and they are not working because they do not want them to work…,” Burrowes said.
He also pointed out that suggestion was made to have someone work with the council and the Auditor General to complete a balance sheet but this was refused.
With regards to the city’s failure to pay staff as well as remit workers tax payments and insurance contributions, Burrowes said this can be owed to the mismanagement of resources by the administration. “I believe that if we implement the system to avoid these things, you will be able to pay a significant part of salaries every month,” he maintained. “I think the government has to give the council permission to borrow from the bank. At the time of investigation, there was $50M. That means that overdraft is not moving. They now have to take money from another account to pay the interest on that overdraft; $750,000 a month, forty something million a year. This is why they can’t pay staff. Why would you have an overdraft that can’t be used, that’s been exhausted and you are paying all that interest? It doesn’t make sense,” he stated.
Burrowes also took note of the councillors’ increase of their own salaries by 33% in comparison to the workers’ 8% increase. “I don’t know if with all these problems, that they are entitled to an increase. I think it is unfair,” he said.
Minister Whittaker in his brief remarks noted that while the council is in debt in excess of $1B, it is owed an estimated $12B. He pointed out the Guyana Power and Light is owed $882M and the company has indicated its intention to terminate its services, which includes street lighting.
“Also, there are persons and businesses out there that are indebted to the city council to a tune of $12B… but there is no interest in reaching out there to collect monies, a lot of which is owed by businesses,” Whittaker said, while also criticising the council for “mismanagement,” “incompetence,” and “disinterest,” in its operations.
Protocol
At a news conference yesterday, Green, who complimented Burrowes for his thorough report, said he was astonished that he was not presented with a copy of the report, while noting that he was informed that he would have to be shown a copy by the Town Clerk. He stated that he was concerned about the manner in which the municipal matters were being dealt with, saying there is a lack of propriety and protocol. “I heard of this report from the Town Clerk, who said she was called and given [a] deadline to respond and that the Mayor should be shown a copy. In normal circumstances, I would expect the minister to send me a copy in what seems to be a new dispensation,” he added.
Green also took umbrage to the final paragraph of the report, which says “serious thought has to be given to the question of maintaining the present council which has obviously outlived its usefulness and is incapable of carrying out its duties.” Saying there were other “inappropriate remarks,” Green said while Gaskin was “well-meaning,” he was unaware of the problems that the municipality has had over the years. “No institution can function without two things: money and management. That is fundamental,” he pointed out
Green admitted that the Mayor and City Council are “far from perfect and even this is a concern since the public’s wellbeing is at stake.” He added, “We feel that the citizens of Georgetown deserve better. I am dead set against all forms of corruption.”
