SOCU probing GMC forensic audit report

Jun 18, 2016 News

The Guyana Marketing Corporation (GMC) audit report, which was compiled by Saykar A. Boodhoo, has been one of the most clear and concise reports in recommending criminal charges and highlighting fiscal mismanagement.

Minister of Agriculture, Noel Holder

A recurring feature in this report has been the roles played by former GMC General Manager, Nizam Hassan, and Ministry of Agriculture (MoA) Permanent Secretary, George Jervis.
Hassan is now the Guyana Rice Development Board, (GRDB) General Manager, while Jervis remains the MoA’s Permanent Secretary.
Yesterday, Minister of Agriculture, Noel Holder, revealed that the audit report is in fact in the hands of the Special Organized Crime Unit (SOCU), which is conducting its investigations.
This was after he was asked whether he had made any attempts to seek an explanation from the GRDB official, on the contents of the report. He noted that at this stage he could not and should not do anything that might prejudice the investigation.
The GMC forensic audit is one of several which were initiated by the Government after assuming office last year. The audit covered the years 2012 to 2015 and was completed and published by the Ministry of Finance last month.
According to the auditor, there were cases of Government funds being used to cover expenses associated with trips and the personal items of officials, cover up of fraud by the then Board of Directors and culpability between that Board and a Trinidad company assigned to build GMC’s office.
The forensic audit into the Institution had revealed that the Corporation was funding expenses, such as trips, associated with former Junior Minister of Agriculture, Alli Baksh.
It was noted that requests for funding came from Jervis or Baksh’s Assistant. These were then sent to GMC’s General Manager, at the time, Hassan.
The auditor documented that $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.
A request from the PS of the Ministry for a cheque in the 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.
The forensic audit has also red flagged a sum of $450M, which was transferred from GMC to other agencies such as Guyana Sugar Corporation (GUYSUCO). Also cited by the auditor, had been a payment of $273.3M on a letter of credit arrangement to GUYSUCO. Documented was an excess repayment of $120M to the Guyana National Co-Operative Bank (GNCB).
In addition, the report also documents that $35M in payments were made to the Guyana Rice Producers’ Association (GRPA), while $111.2M in payments to the Ministry of Agriculture for vertical pumps were made in November 2014.
In the case of GMC’s loan to GUYSUCO, the auditor stated that not only was the loan interest free, the agreement had a special clause stating that only $87M was to be repaid to GMC.
This would represent a difference of over $360M, based on the agreement.
The auditor also highlighted what may have been collusion between the Board and the Trinidad Firm Constantine Engineering. He stated that the Board made several visits to the GMC Head office while work was ongoing and would thus have been in a position to see if shoddy work and substandard building materials were being used.
In addition, it was found that fraud committed by an employee in 2012 was not reported to the police or the Auditor General, but that the employee was given a chance to repay.