The indiscretions in the financial system

Jun 27, 2015 Editorial

Every year the report of the Auditor General contains what may be considered irregularities by some Ministries and Departments. Most common among these are the hidden accounts, all of which should’ve been transferred into the Consolidated Fund.
The layman would believe that each year when the Budget is presented, sums are allocated to the various Ministries for expenditures that have been detailed in the budget. Some of these things are foreign funded. Monies that come from the foreign agency either as loans or grants are passed through the Consolidated Fund and duly recorded.
This system is intended for transparency and for accounting. Every cent (there are no cents in Guyana these days) spent by the government is duly recorded and explained. It therefore comes as a shock when the Auditor General, in the course of his duties, finds hidden accounts.
This could only mean that someone or some entity created these accounts for whatever reason. But at the end of the year, these monies are supposed to be returned to the Consolidated Fund. Instead, each year the Auditor General finds these hidden accounts.
For example, he notes that a number of bank accounts were rendered non-operational. The net operating balances in these accounts total some $55 billion. One account is overdrawn by $46.8 billion and still cannot be reconciled. There were eight accounts that have been deemed static lying in the Bank of Guyana with balances totaling $1.8 billion.
Something is not all well with the government accounting system. It would seem that while there is a scrupulous effort to collect every ounce of revenue from the tax payer, the government is prepared to allow money to languish in some unused accounts. In cases, the government appears to be lax in collecting monies due to it from individuals.
The National Paint Company was privatized for US$1.15 million but less than half of that sum has actually been paid to the government. The Auditor General has found that nearly US$1 million is still owed to the government. Simply put, the new owners actually acquired the company for US$150,000.
This company was privatized in 1991. It means that over the past 24 years, the owners have been enjoying a windfall. And to crown it, the government appeared to be unmindful of the fact that a private company owed it that money which at today’s value, would be some US$5 million.
There must be other cases of privatized companies that owe the government but for which the government seems to have turned a blind eye. Such things would pose a problem for any new government. Going after those companies could be seen as witch-hunting, especially if they are owned by supporters of the previous government.
Another thing that seems to be very common in the financial system is the system of overpayment. The smallest child knows that once money is overpaid it is difficult to recover the overpaid sum if the individual leaves the system. This is exactly the case. Contractors were overpaid, and then granted new contracts without the government making any effort to recover the overpaid sum.
Even the police have been overpaid, although the extent of overpayment would not cause any ripples. Such lax accounting procedures often encourage people to attempt to steal from the public treasury.
Suffice it to say that the report by the Auditor General is most revealing. It highlights the extent of abuse within the system. For example, the Guyana Elections Commission requisitioned for 22 large water tanks as a matter of urgency. Only five were issued to the various locations. The others have disappeared, reported stolen.
Subsequent reports would make for interesting reading given the various disclosures now being made by people pursuing a separate audit into activities that took place more recently.

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The indiscretions in the financial system

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