GEA begs parliament for G$58M bailout boasts US$350M revenue in other forum

GEA begs parliament for G$58M bailout boasts US$350M revenue in other forum – Anand Goolsaran

Sep 24, 2013 News

As an agent of the state, it is inappropriate for the Guyana Energy Agency (GEA) to treat revenue belonging to the state, as its own revenue.

Former Auditor General, Anand Goolsarran

This is the contention of former Auditor General, Anand Goolsarran, who in his recent writings on accountability, said that while in the GEA Financial Statements the US$350M in fuel transactions is represented as revenue; this is not reflected in the National Estimates (Budget).
According to 2012 National Estimates, presented to the Parliament by Minister of Finance, Dr. Ashni Singh, the revenue for GEA is $40M with its expenditure standing at $99.3M, hence the need for a $58.6M subsidy to meet its shortfall.
“The estimates therefore did not recognize the US$350M worth of fuel transactions under the PetroCaribe agreement.”
According to the PetroCaribe Agreement between Guyana and Venezuela, GEA has been designated the buyer for the various types of fuel purchased from that country.
“As a result of this arrangement, GEA has presumably decided to treat the proceeds of the sale of petroleum products to oil companies as its revenue while payments to Venezuela and to the government of Guyana, representing the cost of the products, are shown as office and administrative expenses,” said Goolsarran.
The former auditor general said, too, that although GEA accounts have been audited up to 2012, the annual reports and audited accounts for the years 2010 to 2012 are yet to be tabled in the National Assembly.
“It is refreshing to learn that the Prime Minister has acknowledged this tardiness and has given the undertaking that this would be done as soon as possible.”
It was first reported by financial analyst, Christopher Ram, that with poor accounting practices and no word on who sits on its Board of Directors, the GEA headed by Mahender Sharma, was last year responsible for a whopping US$350M of the nation’s transactions.
Ram had also 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).
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.

GEA Boss, Mahender Sharma

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 subjected to a decent quality audit…It appears that both of these are missing.”
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 Mahender Sharma.