Audit shows…GMC funding personal expenses for officials

May 23, 2016 News

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– some linked to PPP campaigning for 2015 elections

It appears that agencies were not the only recipients of funds from Guyana Marketing Corporation (GMC).The forensic audit into the corporation has revealed that the corporation has been funding expenses, such as trips, associated with former Junior Minister of Agriculture, Alli Baksh.
The auditor, Saykar Boodhoo, stated that while checking vouchers, it was noted that requests for funding came from the Permanent Secretary (PS) of the Ministry of Agriculture (MoA), George Jervis or Baksh’s Assistant.
These were then sent to GMC’s General Manager, who at the time was Nizam Hassan who approved the payment.
Hassan now serves as the General Manager of the Guyana Rice Development Board.
In one instance a cheque was made out to PS of the Agriculture Ministry for $600,000 on February 20, 2015 to pay for the Ministry’s Mash 2015 Costume and Float Parade Band.

Then, the auditor noted, $512,000 was paid to Frandec Travel Service to charter an aircraft for unknown persons headed to Lethem on March 18, 2015. The payment was based on a quotation from Frandec. According to the auditor no invoice was received or attached to the payment voucher.
The auditor also documented the purchase of a cell phone costing $135,000, for former Junior Minister Baksh and a further purchase of two tyres costing $110,000 for his vehicle.
There were also several payments to cover travel expenses for Baksh’s trips to Regions Two and Three. Each cost ranged in amounts from $25,000 to $50,000.
A request from the PS of the Ministry for a cheque in amount of $400,000 to be made out to a Dane Duke on April 9, 2015 to purchase Acousi ant bait for Hinterland communities was also noted. The auditor stated that no invoice was ever provided to GMC.
“When asked to explain why GMC would pay for such items, GMC’s accountant referred the questions to Mr. Hassan, (then) GM,” the auditor reported. “(Hassan) refused to provide any answers for these questionable costs.”
“The cell phone is the property of GMC and should have been returned to GMC when the Government changed in May 2015. The accountant was (also) unable to provide an answer if the vehicle was the Minister’s personal vehicle or if it was owned by the government.”
“Some of the expenses listed may be related to election campaigning for the May 2015 Regional and General Elections,” the auditor also stated.
The report documented that in January 2014, GMC also paid for a cell phone costing $165,000. The auditor observed that there was no indication as to who the cell phone was purchased for. A request was however made to have the Accountant and GM explain why the payment was made. All that was found out is that Jervis approved the payment.
In light of these factors, the auditor stated that the purchase of the cell phone may have been for personal use and therefore constituted a misuse of government funds. He stated that “It might also be construed as a fraudulent transaction.”
This is not all, however. The audit report noted that even after the change of government in May 2015, “financial improprieties by the PS and management of GMC may still be continuing.”
“On May 25, 2015 the PS of MoA instructed Mr. Hassan to have GMC purchase two cell phones for the new Minister of Agriculture and his Assistant. Each cell phone cost $172,840 for a total of $345,680.”

MANAGEMENT’S RESPONSE:
GMC’s management, in its response, stated that the money which was flagged was expended to charter aircraft to facilitate the Ministry of Agriculture outreach in Region 9 on the March 18, 2015.

RECOMMENDATION:
The auditor made it clear that GMC should not be paying for expenses related to the Minister of Agriculture. It was noted that such expenses should be paid by the Ministry of Agriculture, which receives an annual budget.
“Neither the PS of MoA nor the Minister of Agriculture has any authority to demand GMC pay for MoA’s expenses,” he said. “GMC should make payments in accordance to its approved budget.”
The auditor made it clear that the Permanent Secretary of the Ministry, George Jervis, should be made to explain to the GMC’s board why he was instructing GMC to pay for Ministry expenses. According to the auditor, the Board needs to determine what other action(s) should be taken and a resolution should also be reached at the cabinet level.
“The Board should request the PS of MoA to explain why he is expending government funds as his personal slush fund,” the auditor stated. “The police should be called in to investigate and lay criminal charges as appropriate.”

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