GPHC $5M Fraud…Special Audit reveals 159 instances of misappropriation

Jan 22, 2014 News

---

– suggests cashier did not act alone

A Special Audit conducted at the Georgetown Public Hospital Corporation (GPHC) to confirm allegations of fraud within the institution’s Accounts Department was not only able to direct culpability to the cashier, but there is speculation that there might have been others involved.
In fact the roles of both the Finance Director and the Accounts Supervisor at the institution have been called into question.
Evidence of a fraud suggesting the misappropriation of in excess of $5 million dollars was unearthed within the GPHC’s Account Department last year. The state of affairs warranted that a Special Audit be conducted.
And based on the findings of the Special Audit, conducted by The Audit Office of Guyana, there were 159 instances where moneys amounting to $5.115 million were apparently misappropriated by the cashier (name provided) and possibly other persons who were not identified up to the time of the investigation.
The cashier and the Finance Director have since been sent on administration leave while the Accounts Supervisor remains on the job.
According to the report of the audit process, which was seen by this publication, the apparent misappropriations occurred whereby cash and cheque payments were not made to the respective payees and the related sums were unaccounted for.  The audit report detailed too that the various transactions surrounded three bank accounts relating to salaries, revenue received and moneys payable to the Consolidated Fund.
During the period of investigations, it was revealed that there were 39 instances where employees did not receive the respective sums due to them which totalled $1.902 million. The misappropriation of funds related to revenue occurred on 56 occasions amounting to $1.015 million while misappropriation of funds that were intended for the Consolidated Fund occurred on 64 occasions and amounted to $2.198 million.
The Special Audit saw moves being made to interview the GPHC’s Accounts Supervisor who stated that “in relation to revenue received only the arithmetic accuracy of the Collectors’ Cash Book Statements (CCBS) and the deposit book was checked.” The Accounts Supervisor had also informed the Audit Office that in relation to payments, requests were made for daily unpaid voucher listing from the cashier who never provided same. This as a result prevented effective monitoring of the cashier, the Accounts Supervisor informed the Audit Office. Moreover, complaints were made to the Finance Director but no support was forthcoming, according to the Accounts Supervisor.
Although the Finance Director in a subsequent interview with Audit Officers acknowledged receiving a complaint of such nature from the Accounts Supervisor and claimed to have had written to the cashier to this effect, the Finance Director was however adamant that it was the function of the Accounts Supervisor to effectively monitor the operations of the cashier.  And since this was not the case, resulting in the misappropriation of funds, the Finance Director has since given assurance to the Audit Office that action will be taken to correct the state of affairs.
But the conclusion of the audit process saw the Audit Office being able to deduce that the cashier was able to misappropriate funds, possibly in collusion with others, because of lapses in the hospital’s accounting system.
According to the Audit Report not only has there been evidence of lack of supervisory checks to monitor the operations of the cashier but it was observed that since the Cashier’s Cage was poorly supervised this provided opportunities for actual theft at the institution. Added to this the audit process uncovered that the system of checking off revenue before it is banked is rather lax.
As such the Audit Office has recommended that the necessary officers be disciplined for facilitating the theft even as the GPHC seeks to review its current practices with a view to avoiding any reoccurrence. Among the many other recommendations of the Audit Office is that moves be made to strengthen the accounting system including the filling of critical vacancies at the institution.
Another notable recommendation of the Audit Office is that the Guyana Police Force be called in to conduct an in-depth investigation and institute charges where necessary.
When contacted yesterday for a comment on the findings of the Audit Office and the implementation of recommended actions, Chief Executive Officer, Mr Michael Khan, informed this publication that the police have already commenced their investigation with the view of laying possible charges.

---

---