FMAS modules…Installed four not operating to full capacity

Aug 14, 2015 News

---

– Govt. to review complete accounting package

By Kiana Wilburg

Even with the partial implementation of the Integrated Financial Management and Accounting System (IFMAS) under the previous administration, Minister of Finance Winston Jordan disclosed that there still exist some glaring weaknesses in government’s financial systems.
As a result, Jordan said that a complete review will be done on the IFMAS. He made this, among other statements, during his budget presentation on Monday.
The Finance Minister recalled that in 2004, the past administration began the phased implementation of the system. This change saw a move from a completely manual system to an automated accounting system.
The computerized accounting system was created by the Canadian Company Freebalance. It is intended to ensure accountability and transparency regarding how taxpayers’ money is budgeted and spent by the government.
A specially tailored system was made for Guyana by the company and was secured at a cost of $132M.  It comes with seven components: Appropriation, Expenditure, General Ledger, Budget Preparation & Reporting System (BPRS), Purchasing, Revenue and Asset & Inventory Modules. After ten years, the Purchasing and Asset and Inventory Modules are the ones still to be implemented.

Last year, this newspaper carried a series of articles showing how liability for assets and monies could be improved if all the modules belonging to the IFMAS system were operable.
During his 2015 Budget speech, Jordan revealed that after more than ten years and the expenditure of vast sums of money, the four modules are “operating sub-optimally” or not to the highest standard.
Jordan said, “We have not been able to avoid some shocking revelations about weaknesses in the financial systems.”
He noted some of these to be; bank accounts not being reconciled, spending beyond budgeted amounts, unauthorized expenditure, unrecorded liabilities, and missing assets.
Jordan said that Government will begin a complete review of the operations of IFMAS to see whether it meets the objectives of a modern, dynamic public sector managing billions of dollars in the delivery of goods and services.
The Finance Minister said that an initial effort to strengthen public financial management through the strengthening of the accounting and reporting systems will be executed in conjunction with the country’s development partners.
In a previous interview, Jordan told this newspaper that he will investigate the matter of the unused modules Guyana paid millions for, as he is familiar with the system.
“That system was initially brought here under a grant agreement with the Canadians. Any subsequent module to be added will be under that licence and would have to be paid for by us…I have not spoken to the staff here, but what I understand is that when it was first put in, we had two or three modules working and later on, we had two or three more added, and we would have paid for that process,” Jordan had expressed.
He added, “You have to bring in the people to activate it and so forth, but I will be the first to admit that the others which are not in place are extremely useful.”
The Finance Minister had said that were the Asset and Inventory module in place, the system of handing over of assets would have been “much easier and believable.”
That very module provides the ability to: create an inventory for asset entries; track issues and receipts; enter receipts for deliveries to stores via the Purchasing Module; make adjustments to reflect inventory average and shortages; and provide queries and reports on current inventory, stock activity and receiving reports.
The unimplemented Purchasing Module provides the ability to: create purchase requisitions and orders with self-creating commitments to reserve the necessary funds; record the receipts and return of goods and automatically update the purchase order to reflect the transactions; complete integration with the payment process to reflect payment for goods ordered and received; and create an asset record when goods are received.
Jordan had said, “I am not saying that people have cheated, but I am saying that because it is not in place, you still have to go and verify that these assets are in place. For example, if ‘X’ ministry says these are the vehicles we are handing over, you still have to verify through carrying out a check, that the records reflect the truth”.
“There is no proper register of the properties of the ministries, or an asset register that says over the last five or three years of your time in government, these are the assets which were transferred, disposed of or sold.”
Jordan had said for this purpose, the Asset and Inventory Module “would be beautiful.”
He made it clear however that, “We have to find out how much under the licence is required to get it up and running.”
“If I ascertain that we don’t have to pay, then I would try to find out what is stopping us from activating it. I have to find out a reason why. And if no plausible reason can be given, I will have it activated immediately, provided that we can do so.”
The Finance Minister said that if it requires “a humongous amount of people, then we will have to prioritize our activities”.
It is important to note that the Former Finance Minister, Dr. Ashni Singh had said that over 400 persons have been trained to use IFMAS.
Jordan noted that he would “love to see it happen” because with government’s assets “no one can tell you where it is at.” He had said that no one seems to be able to keep a proper asset register, which would also include the gifts received from international bodies.
He recalled that the country’s Auditor General, Deodat Sharma, had complained bitterly that the Finance Ministry’s system for recording gifts and assets is very poor.
Sharma in a previous interview with Kaieteur News had even said that should the two unused IFMAS modules be operationalised, it would certainly make for an easier and more efficient audit of government books. With this position, the guardian of the national purse has continuously called for the two modules to be activated.
Doug Hadden, Vice President of Sales of the Canadian Company which develops the IFMAS, had said that he is unaware of any case where a government bought the system and did not use all of the modules. He said that while Governments are treated with a sense of privacy, he would advise that all the modules be used.
AFC’s Leader, Khemraj Ramjattan had said, “Not to want the implementation of those two most important modules which were paid for and delivered to the Government, exhibits an operation akin to a Pablo Escobar running the Drug Enforcement Agency. Just like what Escobar would have done at the DEA, they have knocked out the intelligence system which could have caught them.”

---

---