Agri Ministry fails to ensure supervision, control over fuel for NDIA – Auditor General’s Report

Nov 10, 2013 News

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The National Drainage and Irrigation Authority (NDIA) expended $304.8M on the supply of fuel for the year 2012, yet the Agriculture Ministry failed to put measures in place to ensure supervision and control over the issuing of fuel to Regions for its fleet of machinery and equipment.
This was observed by the Audit Office in the Report of the Auditor General to the National Assembly on the Public Accounts of Guyana and on the Accounts of Ministries, Departments and Regions for the Fiscal year ended December 31, 2012.
“At the time of reporting, the Audit Office was investigating allegations highlighted in the report of the NDIA Field Auditor.”
According to the report, the Ministry purchased fuel in the sum of $333.9M. Some $19.2M represented overpayments on five accounts, while the sum of $37.9M related to under payment on one account to the suppliers.
As a result of these circumstances, the expenditure in the Appropriation Account was understated by a net amount of $18.7M. Similarly, for 2011, the expenditure in the Appropriation Account was understated by $29.8M.
According to the Ministry, the advances made in December 2012 under the Ministry’s Administration and Fisheries Departments represents payments in anticipation of the January 2013 and February 2013 fuel requirements.
While advance payments under the Hydromet Services were made in preparation for the overall electrical consumption of the Expansion of Office at National Weather Watch project. “Unfortunately due to difficulties with the contractor, the contract was terminated. All fuel have been utilized in 2013 and properly reconciled.
“With regards to the amount of $37M owed to GUYOIL by NDIA, some payments could not have been settled in the fiscal year of 2012, since the Authority had to await NPTAB award which was issued on February 27, 2013,” the Ministry said.
The Audit Office recommended that the Ministry take action to introduce measures for strict control over acquisitions of fuel, while implementing a process of monthly reconciliation with the supplier.
“It was observed that the Ministry of Agriculture failed to observe Stores Regulations and circularized instructions in relation to efficiency controls, operations and proper maintenance in relation to the machinery, equipment and vehicles under its control.”
The report stated the system requires NDIA engineers to authorize the issuance of fuel and spares, which must be properly recorded in log books. However, in most cases, these requirements were breached, the report stated.
Log books presented were not properly written by operators and there was no evidence of monitoring or supervisory checks.
NDIA does not have facilities for storing bulk fuel. As such, contractors hired to uplift and transport fuel were left with the responsibility to store large quantities of fuel.
“The Audit Office considers these arrangements to be very loose and can lead to the perpetration of irregularities,” the report stated.
The report further highlighted that stock ledgers and other monitoring records were not maintained to record and account for fuel authorizations and related issues to contractors.
“This breach resulted in an inability to reconcile with suppliers and to analyze and control fuel usage. In the circumstances, the amounts of fuel received by contractors could not be accurately compared, with expenditure records and/or disclosures of utilizations by the NDIA. The efficiency in the use of fuel was also not determined,” the report stated.
In response to the Audit Office findings, the Ministry said that NDIA recognized the need for improvement in the writing up of log books. Training of operators and engineers in this direction had been conducted with the involvement of personnel from the Audit Department.
“There has been improvement in the writing up of log books, and further training in all areas of record keeping within the mechanical section will be intensified,” the Ministry said.
Storage facility for bulk fuel is currently being constructed at NDIA’s workshop at Lusignan. The entity is also establishing a mechanical store at the same location.
Appropriate clerical and technical personnel are being recruited to allow adequate record keeping, auditing and reconciliation of receipts and utilization of fuel.
The Audit Office recommended once again that the Ministry put measures in place to ensure stricter supervision and control over the issuing of fuel to the Regions for its fleet of machinery and equipment.
It wants log books to be maintained for all of the entity’s vehicles and equipment, and submit them for audit examination when requested.

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