In spite of Jagdeo’s rants…Govt says it only inherited billions in debt from PPP

Jun 04, 2017 News

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“Nothing but fluff” is how several members of Government have chosen to describe Opposition

Leader, Bharrat Jagdeo’s comments. The Opposition Leader has constantly reported that the coalition administration inherited Guyana from the PPP in a good state with billions of dollars in the Treasury.
The Government is saying that the only thing it has inherited from the PPP is “billions of dollars in debt.”
In this regard, the government pointed to the fact that it is now saddled with the repayment of billions of dollars in debt on the Skeldon Sugar Factory because of the Jagdeo regime.
The administration said that it is because of the PPP’s poor leadership that the government had to step up to the plate recently to handle a US$17M loan to be repaid on the Marriott Hotel. The hotel is also in need of US$5M in repairs in order to keep the Marriott International brand.
Government officials also cited the fact that the coalition government was forced to scrap the controversial fibre optic cable project which cost taxpayers over $1B.
It was also pointed out that due to the mess with CLICO, Government was left with no choice but to begin repayments of $5.24B that was invested by NIS.
The aforementioned is compounded by the fact that the Government had to inject over $30B in direct cash transfers to the Guyana Sugar Corporation (GuySuCo), due to the horrible state in which it was found.
But Opposition Leader, Bharrat Jagdeo has still been insisting that the Government inherited Guyana from the PPP in good standing.
At one of his most recent press conferences, the former President sought to correct a statement which he alleges was made by the Government.
Jagdeo claimed that the Government made statements to the effect that it assumed office and found an empty Treasury. This is erroneous, said Jagdeo.
While Jagdeo holds fast to those comments, the Government is maintaining that this was never said. Officials clarified that when the party assumed office, the Consolidated Fund was found to be “in heavy overdraft.”
This issue was also clarified in a previous interview that was conducted with Finance Minister, Winston Jordan.
A look at the Auditor General’s (AG) 2013 report also reveals similar concerns about the Consolidated Fund being in heavy overdraft.
Auditor General, Deodat Sharma, noted in that report that the old Consolidated Fund bank account (No 01610000400) was not reconciled since February 1988. He said that a cash book for the account was subsequently reconstructed for the period 1989 to 2003 in order to aid the reconciliation of this account.
However, despite attempts by the Accountant General’s Department to reconcile the monthly transactions on the account from January 1994, the AG said that it was found that a proper reconciliation was still not done.
He emphasized that this account continues to be overdrawn over the years with a balance of $46B as at December 2013.
He said, too, that it should be noted that the new Consolidated Fund Bank account which was opened in January 2004 with a transfer of $5B from the old Consolidated Fund account, was also found to be in overdraft of $2B while the cash book reflected an overdraft balance of $21B.
However, the very 2013 AG report shows in more than a few instances that there are several accounts with unused monies.
As at December 31, 2013, Sharma highlighted that 22 Government bank accounts were listed as inactive. He said that the net accumulated balance of these accounts and other operational accounts excluding the balances of the bank accounts of special projects totalled $54. 9B.
Sharma said that this account included the unspent sums of money by ministries, departments and regions. In spite of his annual recommendations, the monies after 10 years have still not been paid over to the Consolidated Fund. The period of review, reflected a balance of $647.943 million in this account.
Sharma said that prior to 2004; money was released from the Consolidated Fund for use by the non-sub accounting ministries and departments. The money placed in bank account number 3001, Sharma said, was under the control of the Accountant General’s Department.
He also found that eight accounts at Bank of Guyana were holding $1.8B. These monies had been untouched for over a period of five years.
Sharma insisted that these monies belong to the Consolidated Fund. This Fund is Government’s main bank account into which revenues are deposited and out of which expenditure is made.
The country’s financial laws dictate that all advances made from the Consolidated Fund which have not been utilized must be returned to the Consolidated Fund.
Sharma expressed concern over the heavy overdraft of the Consolidated Fund, stating particularly the need for agencies which received advances from the Fund to make the necessary repayments.

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