– PAC told
By Chevy Devonish
Permanent Secretary (PS) Alfred King led a team from the Ministry of Culture, Youth and Sport that had to take its lumps from the Public Accounts Committee (PAC) on Monday after admitting to awarding a contract to a contractor to clear his over $1 million debt to the ministry.
At the end of the hearing, the ministry team was asked to review discrepancies in its accounts that contradicted the Auditor General’s Reports dealing with its financial activities for the period 2004 to 2010.
According to the Auditor General’s report, a sum of $110,000 had been recovered, from amounts paid to a contractor in relation to work done at Fort Kyk-Over-Al and Fort Zeelandia, leaving a balance of $1.126 million.
King admitted that recovering the money has been a slow process, and said the contractor was given an additional contract to assist in the repayments he is required to make.
Several PAC members were appalled at this revelation. PPP/C MP Odinga Lumumba took the opportunity to state that it was not the government’s policy to use such a method to recover money and he stated that the particular matter was dealt with at the previous PAC meeting, where it was made clear that it was a breach of the Procurement Act.
PPP/C MP Gail Teixeira also stated that it should have been noted that the contractor, who owes money since 2005, was making no serious efforts to repay his debts, having only repaid about 4% to date. Echoing the opinions of the entire committee, she suggested that contracts should not be given to persons who have records owing money and are not repaying.
Lumumba also demanded that justification be given for why this method was utilised as opposed to the others available. King explained that the method was used with the contractor because he had found that it proved fruitful with the smaller contractors. He stated that in more serious cases, the ministry has moved to the courts to recover monies owed by contractors. Even more than this, he stated that steps were even taken to blacklist defaulting contractors.
King blamed lack of supervision and premature signing off on work for the overpayments made to the contractor. As a result, monies were paid even before inspections were carried out to ensure that works were completed. He added that by virtue of being located in riverain communities, works carried out on Kyk-over-Al and Zeelandia were very difficult to monitor and check off before payments were made, even though efforts were made to do so.
The PAC suggested stated to King that the discrepancies created were as a result of a faulty system, and recommended that the ministry make improvements in the way these activities were carried out.
Police involvement
Also scrutinised by PAC during Monday’s engagement was the recovery of salary overpayments totalling $852,780.
When questioned about the ministry’s progress in recovering the monies, King stated that although it was able to recover some of the money, the process was incredibly tedious for several reasons.
He said the ministry has adopted the method of tracking the payments that were made through the banking system in at least five cases and has also visited the homes of several of the individuals who were overpaid.
King added that in one case, the home of a nurse was visited and that the woman agreed to start making payments, having made one since. She has promised to make further payments.
He also disclosed that the police were called in to assist in the process and they have reported that they are encountering great difficulties in locating individuals and in at least four cases they found that persons had relocated overseas. He stated that despite this fact, efforts are still being made to locate these individuals.
Teixeira questioned the decision to involve the police. She argued that since none of the overpayments were deliberate and there was no proof that monies were stolen by persons, the police should not necessarily have been called in unless persons refused to pay. Instead, she suggested that the ministry should have solicited the assistance of the Guyana Elections Commis-sion, which would have been in possession of information that would enable them to locate the individuals.
Although King pegged the recovered amount at $618,052, leaving a balance of $234,728 to be recovered, APNU committee member Volda Lawrence pointed out that these figures contradicted those found in the ministry’s response to Auditor General’s report. In its response, the balance was given as $487,981, after the recovery of $364,799.
This discrepancy prompted members of the committee to inquire if King had even seen the document before it was submitted to the committee. Committee members also observed that the document submitted was not accompanied by King’s signature.
King said that to his knowledge, the figures he stated were the correct ones, and he suggested that there may be some confusion.
The ministry also faced questions about the non-updating of its cheque order register, which resulted in the status of 38 cheque orders, for amounts totalling $7.86 million, not being determined. Responding to the inquiry, King said that of the 38 missing vouchers, they were able to account for 36, leaving just 2 unaccounted for.
However, his claim again was in direct contradiction to the document that was provided by his ministry, which stated that “the Special Projects Account cheque order register was subsequently updated and that of the 38 cheque order vouchers that were outstanding 27, valuing $322,804 were cleared and verified by auditors” The Auditor General’s office reported that the register was now fully updated and that only 5 cheque orders, valued at $322,804 were outstanding.
In the light of the confusion caused by the incorrect figures, committee members again suggested that this matter be left alone so that the PS could get together accurate information.
Special account
Also raised during the meeting was the matter of balances on capital provision, totalling $294,610 million, which were withdrawn from the Consolidated Fund and deposited into a special bank account.
King explained that the special account was not created to divert funding given by government, but to hold funds made available by the United Nations Development Project (UNDP) and other donor agencies for various projects.
The Auditor General concluded that there was no information to suggest that the account was illegal, even though it was suggested that this money should have been paid into the Consolidated Fund.
King further stated that all the funds which were made available by these agencies were spent, and that the sums in question were outside what was given by donor agencies.
As it relates to the unspent government funds, King was asked to explain why this sum was not paid back into the Consolidated Fund at the end of the year, as is required by law. He said that the funds remained unspent because the performance of “the contractors saw them not being able to complete the projects they had planned” and scheduled payments were not made.
When asked, why the money was not sent back to the Consolidated Fund, King admitted that this should have been done but stated that the ministry decided to keep the funds to make payment on the roll-over projects, which were completed the following year.
When asked if permission was ever sought or given for this, King admitted that it was not and said that in retrospect he agreed that the ministry should have sought permission to have the projects roll over to the next year.
King said the decision was taken to have the projects roll over because the ministry still had contractual obligations to the contracting firms that had work ongoing on several projects. He argued that he believed these obligations justified the decision to have the projects roll over, despite protocol. Nevertheless, he admitted that the actions were wrong and said the ministry claimed responsibility for perpetrating the act, which is against the law. King promised that there will not be a recurrence of this in the present year.
Officials from the ministry are slated to reappear before the committee at its next sitting to set the record straight on all conflicting figures.
