NIS makes significant post-forensic audit improvements

May 24, 2016 News

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The National Insurance Scheme (NIS) said, yesterday, that some of the issues highlighted in the recently released forensic audit report have since been addressed and corrected.

The entity highlighted yesterday that despite the fact that it was only recently released; the audit into its operations was conducted about a year ago. NIS said that it has since been able to make much needed changes.
Some of the problems addressed existed for years during the reign of the People’s Progressive Party/ Civic (PPP/C). The fact that NIS was able to attack the issues it did, should reflect the scheme being in a better financial position.
The NIS audit report highlighted that the Ministry of Finance owed the scheme millions. The debt was incurred under the PPP/C.
Ramesh Seebaran, in his report, revealed that a debt of $168M was recorded in NIS’ audited financial statements for 2013. Part of that figure represented debts dating back in 2001. The sum owed by the Finance Ministry represents the chunk of the debt recorded in that year.
Seebaran reported, “Included in this amount, is a balance of $116M owed by the Ministry of Finance and an amount of $38M which represents dishonoured cheques from contributors. Further, over $20M of the $38M is owed in excess of five years.”
NIS indicated yesterday that the Ministry of Finance has since reimbursed all monies that were outstanding for the one per cent Government’s subsidies on NIS contributions.
Seebarran had found that the Guyana Sugar Corporation (GuySuCo) was the largest defaulter with an indebtedness of over $1.5B. According to Seebaran, the Operations Manager, presented a list of receivables totaling $1,091,172,705 at August 2015 which does not include GuySuCo whose indebtedness is $1,574,283,889 for the period September 2014 to April 2015.
However, this has been corrected. NIS said yesterday that contribution payments that were owed by Guysuco have been paid. It was also noted that Guysuco is currently paying its monthly contributions on a “timely basis.”
Because of the level of debt that NIS had, Seebaran recommended the establishment of both a proper Debt Management Unit with adequate staff and resources to effectively pursue defaulters and a legal department since management only engage lawyers for significant cases. The auditor has noted, “This practice severely hampers its debt collection abilities.”
NIS said, “Efforts are being made by NIS to collect all outstanding monies owed by employers to the Scheme. To this end, a Debt management Unit has been established to aid the compliance Section in their collection efforts.”
Also the audit report had revealed that employees at the various branch offices were in serious danger.
The Auditor, Ramesh Seebaran, said that the employees are exposed to electric shock and other health hazards. He also noted that already faulty equipment were likely to be further damaged.
Seebaran said that during visits to some NIS offices, including the main branch, auditors noted that the buildings were in dire need of repairs.  He added that the head office is in such a state that it should be closed temporarily for extensive repairs and maintenance.  Seebaran said that the state of the building poses a health risk to employees.
“Whenever it rains, employees, equipment, furniture, records have to be relocated or shifted to prevent further damage because of the leaking roof and the flooding of the compound and surrounding area.”
The NIS audit started during the May-June rainy season. It was noted that during that time “we observed first hand at the Camp Street and Brickdam locations, the leaking roofs and the soaking of furniture as well as records.”
Further, auditors “witnessed how the pension files stored at Brickdam were being soaked by flood water as rain seeped through the roof and by sewerage water rising from the ground.
“In some cases the records/files were damaged to such an extent that it required employees to wear masks and gloves to protect their health before handling them.”
Seebaran reported that things can become even more dangerous, if the water gets into contact with electricity cables and outlets, putting the building at risk from fire and employees at risk of electric shock.
Seebaran said that similar situations also exist at the branch offices in New Amsterdam, Port Mourant and Fort Wellington.
He said that the branch in Melanie Damishana is also not suitable.  However, he said that this location has the least of the problems. Seebaran said that the front yard at that location floods whenever it rains.
NIS is claiming that maintenance work is continuous and several improvements are being made.
While NIS did not state to what extent repairs were made, it was noted that the entity has been able to “overcome difficulties with several manual records and has already digitized many such records.”
NIS further stated that it “stands committed to our employees and the public that we serve.
The statement sent out by the scheme did not address a few other issues highlighted in the audit report.

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