Dear Editor,
Please permit me to weigh in on the IHS cost recovery audit for the period 1999-2017. I have noted the concerns raised by the Stabroek News editorial (s) and perhaps the general public at large. I have also noted the Guyana Revenue Authority’s (GRA) press statement on the matter as well as the Vice President’s in his recent press conference.
I agree that the concern raised about the slothfulness in completing the audit is a reasonable concern―but at the same time, the fact that the process has been actively pursued during this time by agents of the Government of Guyana to where it is currently is also not unreasonable.
Before writing this letter, I was careful to consult with an auditing firm to ascertain what is the average timeline it takes to complete an audit for a relatively large company in Guyana with say an expenditure value of G$1 billion. Bearing in mind that the audit process commences from the time the engagement letter is signed to the preliminary findings which is shared with the management for a response and address any deficiencies, then a final audit report is prepared and another meeting with management before closing the audit process. To this end, my understanding is that depending on the volume of transactions, value of expenditure among other factors―it takes approximately six months on average to complete an audit of this nature to finality; and the sample size covered is usually around 50%.
I am also familiar with the audit procedures―having been involved in the process myself, in responding to audit reports, etc., throughout my career within various organizations―almost all of the organizations I have worked. So, the six months average timeline and sample size covered can be practically confirmed.
With that in mind, the first cost recovery audit which spans approximately eighteen (18) years (1999-2017), comprising an expenditure size valuing more than the country’s pre-oil GDP, and considering that the audit covers 100% of the recoverable costs; the timeline of two years or just over two years to bring the audit to closure―cannot be unreasonable. Further to note, we are now building capacity in this regard as a country.
That said, it would be thoughtless of me to not acknowledge and commend the technical team at the Ministry of Natural Resources and the Guyana Revenue Authority for the thorough and competent work they have done in respect of the audit―based on the GRA’s statement. It is certainly commendable on their part which is demonstrative of the fact that these agencies are building capacity at a relatively fast pace―and demonstrative of the technical competence of the officers involved.
Yours sincerely,
Joel Bhagwandin
Financial and Public Policy Analyst
