AG reports expose weaknesses of Gov’t.’s manual tracking

Jun 09, 2014 News

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– Ministries still to provide evidence to account for millions expended
President Donald Ramotar at a recent press conference had stated that he is not too worried that billions in assets can go untraced despite two critical modules belonging to the Integrated Financial Management and Accounting System (IFMAS) have not been used for 10 years by the Ministry of Finance. The President said that the Ministry has “manual systems as their alternatives” to back up the shortcoming.
Government actually bought the “reconfigured” IFMAS software at a cost of US$660,000 to modernize its business.
Minister within the Ministry of Finance, Juan Edghill had also pointed to those very alternative systems in place of the two absent modules: Purchasing and Asset Inventory.

Edghill also insisted that despite the non implementation of the two modules, the Ministry is currently generating “reliable and comprehensive” financial statements, which are used by the Auditor General (AG).
While the Head of State and his Minister hold firm to the effectiveness of their “manual systems”, the Auditor General’s reports reveal a different side as it exposes the weaknesses of the manual alternative. An examination of the AG’s 2012 reports reveals just how effective government’s alternatives are in ensuring that millions or billions in assets and consumables don’t go untraced.
A look at the Ministry of Public Works reveals the weakness of the manual system. The 2012 AG’s reports cited a discrepancy highlighted in 2011 in relation to a Toyota Carina AT 192 vehicle, PJJ 3886, which remains unresolved.
The Ministry acquired the vehicle on November 3rd, 2004. The vehicle was bought for use by the Construction Manager of the Chinese Construction Company that had executed works on the International Conference Centre, which was funded through a grant from the People’s Republic of China. The vehicle was subsequently sold to a private individual for $1.24M even though evidence indicated that the Ministry had full ownership.
Without producing evidence to the contrary, a senior functionary within the Ministry on June 5, 2012 gave credence to the sale and advised the Head of Budget Agency to facilitate the transfer of the property. Even though the transfer has been held in abeyance, the whereabouts of the vehicle was unknown to the Ministry and from all appearances, was released into the custody of the purchaser since July 2009.
In the case of the Ministry of Education, the AG’S reports for 2012 said that the Ministry had still not taken steps to account for its expenditure, in that for the period under review, a total of 20 payment vouchers for expenditure totaling $2.393M were not presented for audit examination. As a result, it could not be determined the propriety of the payments made and whether value was received for the sums expended. A total of 11 payment vouchers for expenditure totaling $11.511M also remained outstanding for the year 2011.
Also under unresolved matters, with regards to the School Feeding Programme in Region Nine, two warrants amounting to $40M were issued to enable preparation and supply of school snacks to 3,500 students across 43 villages.
However, financial returns were not provided to account for funds expended on behalf of the Ministry. In the circumstances, it could not be ascertained whether the amounts were expended for the purposes intended.
In the previous financial year (2011), there was poor accountability under the programme, as it relates to $42.999M expended to enable preparation and supply of school snacks to 3,814 students across 48 villages in Region Nine.
As for the year 2012, the Ministry was still to provide records to validate spending amounting to $6.715M for the year 2007. The sum was expended on behalf of the University of Guyana (Berbice) for the purchase of library books, computers and accessories, completion of the science laboratory, and the payment of retention.
The Ministry’s response to this was “The Head of Budget Agency indicated that efforts are still ongoing to locate the outstanding vouchers to be presented for audit scrutiny/examination.”
In the case of the Georgetown Public Hospital Corporation, an examination of the payments revealed that the major contracts had an aggregated face value of $1.162 billion, of which the Corporation paid $1.043 billion during the year. The Ministry of Health was noted to have paid the sum of $117.256M to the contractor on behalf of the Corporation. It could not be determined whether the supplier had satisfied the requirements for bank guarantees with respect to the contracts, since these were not provided for examination.
As for the Ministry of Health, specifically, The AG’s reports said that at the time of reporting, outstanding deliveries for the year 2011 totaled $59.835M, following the receipt of pharmaceuticals and other medical supplies to a value of $28.266M. The position remained the same for 2008, in that the Ministry is still to provide evidence to support deliveries valued at $79.262M.
With the aforementioned examples highlighted, some financial analysts have opined that the Ministry of Finance should be ashamed to say that their alternatives are effective and should really reconsider its statement that millions in assets and consumables are not going untraced.
It is clear that the manual systems cannot adequately keep track of government assets and expenditure until it’s almost too late.
However, if the two vital IFMAS modules were implemented, there would be immediate tracking of discrepancies.

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