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Audit finds that NDIA breached its own act

Jun 18, 2016 News

A forensic audit report into the National Drainage and Irrigation Authority (NDIA) has revealed several instances of irregularities at the government owed agency.

From issuing millions of dollars to non-working vehicles, to the purchasing of equipment without Cabinet’s approval, these irregularities have resulted in a few raised eyebrows.
The report also consisted of a finding that shows that the agency breached its own act.
The National Drainage and Irrigation Act 2004 states that the Authority shall keep proper accounts and other records of its transactions and the accounts shall be audited by the Auditor General, or by any such auditor appointed each year by the Board with the written consent of the Auditor General.
However, the auditors stated that the NDIA has never prepared its own accounts since it was incorporated by the Act of Parliament.
This was brought to the attention of management on several occasions by the Auditor General; NDIA operated as a section of the part Ministry of Agriculture (MOA) and at a Board meeting held on June 4, 2013, the Permanent Secretary (PS), George Jervis, advised the members of the Board that NDIA could commence its own accounting system which was introduced from November 2013.
It was pointed out that the NDIA was never audited as a separate entity but as part of the MOA up to fiscal year ended December 31, 2013.
The auditors indicated that the amount of coverage given in the previous audits was very limited given the size of the operations.
“We are of the view that had more detailed coverage being given; corrective actions would have been taken earlier to address the many breaches and poor controls in critical areas noted herein.”
The auditors recommended that the Financial Statements should be prepared on accrual basis as detailed in the Contract and in accordance with NDIA Act of 2004.
“We do not recommend the traditional cash based accounting because it only focuses on receipts and payments and changes in cash balances. More importantly it does not provide the level of transparency that is required to properly manage the entity and to assess the stewardship of those entrusted with taxpayers’ money.
Management requires a full set of financial statements to properly asses the financial position, financial performance and cash flows and to develop a long term plan for the organization.”
With regard to accounts and auditing, the report revealed that the authority spent in excess of G$12 billion in both Capital and Revenue Expenditures over the past four years and the Internal Audit Unit (IAU) or the watchdog for NDIA, only has one person who is tasked with responsibility of auditing the entire organization. The present internal auditor previously functioned as Accountant for a number of years.
Not only was there ‘only’ a pair of eyes to look over all the financial transactions at the NDIA, the auditors observed that this Internal Auditor was inadequately resourced given the level of expenditure incurred.
The auditors indicated in their report that it is not possible for one person to monitor the effectiveness and efficiency of internal controls over the financial operations. This they noted is clearly demonstrated throughout the audit report with the many red flags and breaches identified.
The NDIA functions as Guyana’s apex organization dealing with all public matters pertaining to management, improvement, extension and provision of drainage, irrigation and flood control infrastructure and services in declared areas of the country.

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