By Janette Bulkan and John Palmer
(This is Part Two of a series of five reviewing the reports of the Guyana Forestry Commission for 2005-12 which were tabled in Parliament on November 7th, 2013)
In the first article in this series, we gave reasons why the National Assembly should be scrutinizing, and be helped to scrutinize, the annual reports and audits of finances of government agencies as a routine function of parliament acting on behalf of the citizens of Guyana. In this second article, we offer comments on the summary accounts from eight years (2005-2012) from the Guyana Forestry Commission.
Summary accounts and audits –
A1. Validity of the signatures of the Commissioner of the GFC – the National Assembly may wish to note and to query why the signature of the Commissioner of the GFC differs greatly in all reports between the main text and the sign-off of the accounts.
A2. Inconsistency in wording by the Auditor General on GFC accounts – the Auditor General’s covering letter also does not use consistent wording between the GFC annual reports. No explanation is given for the variance. Is this due to inaccurate copy typing? Or do the omissions indicate that the Auditor General has doubts about the quality of the GFC accounting and its legal compliance as a corporate body but is reluctant to go into detail? There was mostly a space of several years between the year of accounts and the date of the Auditor General’s audit statement, with no explanation for the gap even though the Guyana Forestry Commission Act (2007) is specific about timing.
A3. Extraordinary inter-year variation in GFC account details – the accounts attached to these GFC annual reports are not in an entirely consistent format, and no explanation is offered for the variance. The most serious problem with these accounts and associated annual reports is that there has been apparently no attempt to link the accounts with the GFC activities. The summary accounts are not accompanied by a ‘management discussion and analysis’ which conventionally would associate the line items with activities in the forest sector.
Large amounts of monies, and large variations from year to year between line items, appear to have been unquestioned by the Auditor General. The table below shows that forest production and export figures are fairly stable from year to year but there are large variations in the line items in the accounts. No explanation is offered why the GFC should be holding over US$4 million in cash each year, why transfers are made to the Environmental Protection Agency (EPA) and to NICIL but none to the Consolidated Fund, why the GFC is acquiring and disposing of fixed assets, why the GFC has current tax liabilities of up to US$10 million in a year – dwarfing other line items. There is a legal requirement for the GFC to make transfers to the Consolidated Fund (Section 16 (2) in the GFC Act 2007), but no requirement to send money to the EPA or NICIL.
Annual reports from Guyana Forestry Commission to National Assembly Note: entries for 2011 from GFC/FSIR (Forest Sector Information Report) whole year 2011, sawnwood exports for 2006 from GFC/FSIR 2006 (missing from GFC annual report for 2006)
A4. Improper merging of line items in GFC accounts – it is not conventional anyway in accounts to have a combined line item for licences and penalties; they should be separate because they clearly have quite different origins and purposes.
A5. Claims by the GFC of high levels of compliance by concession holders are incompatible with the high levels of penalties – most of the annual reports state that monitoring has shown that there is a high level of compliance with law and procedures by holders of logging concessions. Given that GFC licence fees are low by world standards holders, and that at most G$12 million has been raised in any one year from the application fees for three State Forest Exploratory Permissions (see page 30 in AR 2012, 3 x US$ 20,000 fee), the large fluctuation from year to year for ‘licences and penalties’ should be explained. If compliance has been so good, how has the GFC levied over US$ 0.9 million for this line item (in 2008)? As Press reports in 2007 indicated that the GFC had levied large fines against Barama alone (at least G$96 million and 50 million), why is there not a closer match between the figure in the annual accounts and the Press reports?
A6. Inadequate transparency in GFC procedures – why, indeed, does the GFC never take any alleged offender to Court, and on what bases are GFC penalties levied? Why is there no explanatory document on the GFC website or in GFC outstations, to explain the compounding procedure, the bases for the penalties, and the penalties per offence, cross-referenced to the exact Section of law and exact Regulations in subsidiary legislation?
A7. Lack of clarity in dating of information – in several tables in various ARs, it is unclear whether the data refer to the state on 01 January or on 31 December. Every table should be checked for clarity.
In the third article in this series, we will offer comments on the general principles for annual reports from government agencies and note peculiarities common in the eight reports from the Guyana Forestry Commission.
1 Reported as 57 million in 2007 and as 75 million in 2008.