GEA handles US$350M in fuel, submits questionable financial statements - Ram

GEA handles US$350M in fuel, submits questionable financial statements – Ram

Sep 11, 2013 News

With poor accounting practices and no word on who sits on its Board of Directors, the Guyana Energy Agency (GEA) headed by Mahendra Sharma, was last year responsible for a whopping US$350M of the nation’s transactions.

Christopher Ram

This was the summation of Financial Analyst Christopher Ram, who posted his recent findings related to the GEA on his website, chrisram.net.
Ram stated that while the GEA came into existence in late 1997 and commenced operations in 1998, it was more than 12 years before any accounts were tabled in the National Assembly.
“This is no inconsequential oversight,” said Ram, who indicated that the GEA by its own calculation is responsible for a sector which in 2011 was the equivalent of 25 per cent of Guyana’s Gross Domestic Product (GDP).
As it relates to the transactions last year, Ram pointed out that it is the GEA that has been assigned responsibility for the contractual arrangements with Venezuela to supply Guyana with crude oil, refined oil products and Liquid Propane Gas (LPG).
“In 2012 the payments for fuel purchased under the arrangements amounted to close to US$350M.”
According to Ram, the records indicate that audited financial statements and not annual reports were tabled in the National Assembly for years up to 2009.
He said that according to the 2012 activities, the audits for the years 2010 and 2011 have been completed, but these have not been tabled.
The analyst said, “The financial statements are a real cause for concern. You would think that an entity that handles such sums will not only have a good accountant but also be subject to a decent quality audit…It appears that both of these are missing.”
Ram said that “perhaps half-thinking it is a trading entity,” the GEA’s income statement shows as income the moneys it receives from the oil companies and then shows the related payments to Venezuela and the Ministry of Finance as “Office and Administration Cost.”
He said too that the accounts bear no signature of any director and for each year from 1998 to 2009, one of the signatories on the balance sheet is Mahendra Sharma.

Mahendra Sharma

Ram said too that Deodat Sharma, the Auditor General, who signed off the audit report for the years 2003 to 2009, claims that the accounts have been prepared in accordance with International Financial Reporting Standards.
Ram however concludes that “those accounts would have been rejected by any self-respecting accounting technician…Deodat Sharma should be thankful that he is not qualified to be a member of the Institute of Chartered Accountants.”
Ram in his assessment of the Agency said that there are clearly severe gaps in the Agency’s governance arrangements with the identities of the directors a matter of secrecy.
“Our National Assembly seems to have no idea what should be tabled or does anything about the inadequacies of what is tabled…The Assembly for 15 years voted subventions for this body without once asking about how those subventions were being spent.”
Ram said too that the Public Accounts Committee was equally not alert to the omission.
“And of course, one cannot help but worry not only about the accounting capabilities in the GEA but also about the amateur quality of the external audits.