GFC refuses to satisfy Forestry Act

May 08, 2016 News

…fails to create reserve fund

By Abena Rockcliffe- Campbell
The Guyana Forestry Commission (GFC) continues to violate the Forestry Act with its failure to setup and

Auditor, Anand Goolsarran

maintain a reserve fund as the legislation requires. However, the Commission has sought to divorce itself from this malpractice saying that the absence of the fund is no fault of its own.
The Commission said that “various” Finance Ministers over the years have basically ignored the need for the fund to be established.
Chartered accountant, Anand Goolsarran, highlighted the issue in his report of a forensic audit he conducted into the operations of GFC.
The former Auditor General pointed out that in accordance with Section 16 of the Forestry Act, the Commission is supposed to maintain a reserve fund and transfer to it, from the net surplus for each year, an amount not less than the amount fixed by the Minister and notified to the Commission.
He said that if the reserve is insufficient to cover any net loss of the Commission as recorded in its profit and loss account for any financial year, the Act provides for the amount of the deficiency to be charged to the Consolidated Fund.
Further, Goolsarran pointed out that the Act also states that if in any subsequent year a net surplus accrues to the Commission, the Commission shall pay into the Consolidated Fund the amount agreed by the Minister of Finance until the amount charged on the Consolidated Fund, together with interest, is fully paid.
Despite such detailed provisions for the fund, it is nonexistent.

GFC Commissioner, James Singh

Goolsarran said, “The Commission, however, has not been maintaining a reserve fund, despite the mandatory requirement of the Act.”
Important to note is that the evidence which Goolsarran said he saw contradicts GFC’s defence for the nonexistence of the fund. Goolsarran noted in his report, “Correspondence seen indicated that in 2004 the Minister had advised the Commission to maintain a reserve of at least one year’s expenses.”
GFC said that General discussions were held with various Finance Ministers on this subject but no affirmative decision has been taken to set up this fund.
Further, GFC said that while it is violating the Act, other provisions somewhat—similar to what is required by the Act—are in place.
GFC responded, “Funds of the Commission are invested in term deposits accounts. In addition, resources are provided through annual budgeting to meet the next year expenses. These two provisions still enable the main tenets of such fund to be kept. In addition periodic transfers are made to the consolidated fund.
It said, too, that Goolsarran did not take account of “the fact that GFC has been making adequate provisions for the allocation of covering expenses in every upcoming year through the GFC’s Annual Budgeting Process. Additionally, excesses of revenues over expenses are held in term deposit account therefore also allowing this to contribute to the fulfillment of upcoming year’s expenses if needed.”
While GFC failed to set up the mandatory fund, the Commission has been, over the years, transferring huge sums to various state agencies. The very audit report highlighted that GFC transferred $300M to the National Industrial and Commercial Investment Limited (NICIL). This sum went towards the building of the Marriott Hotel. The Commission said that it basically followed Cabinet and Ministerial instruction on most of the transfers.

Discover more from Kaieteur News

Subscribe to get the latest posts sent to your email.

Latest News