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$72M in cheques written to ghost suppliers

Feb 15, 2017 News

In a clear breach of financial regulations, Region Six, East Berbice/Corentyne Democratic Council, has been preparing millions of dollars in cheques for supplies no one even knew existed.
During the statutory Public Accounts Committee (PAC) meeting at Parliament chambers on Monday, the issue was extensively discussed and PAC Chairman Irfaan Ali sought answers to the worrying development.
The irregularity was found in 2015 when the Auditor General’s Office conducted a financial audit of that Region’s affairs. The Region is still in receipt of a number of those cheques and was advised to send them to the Accountant General’s department to be deposited into the consolidated fund.
Additionally, the Region has been preparing these cheques based on the local tender board approval of projects rather than invoices provided by suppliers for supplies that should have been provided.
The Deputy Regional Executive Officer who is responsible for finance was asked to explain why such breaches occurred.
Ali asked the DREO after the Tender Board awarded the contract, what were the criteria used to prepare the cheques. The DREO explained that it was upon the Tender Board’s award that the cheques were prepared. “You can’t cut a cheque based on a Tender Board award,” Ali lamented.
Strangely these cheques were prepared in advance of the expected delivery of the supplies and were made out for the full amount. Ali was baffled about the reasoning behind such a move.
“So if you cut a cheque for $8M and the man does $2M dollar work what happens there?”
The officer was advised that this should not be done; probing further Ali sought more clarity on the issue from the DREO whose answer did not find favour with the PAC Chairman. At this point he suggested that the Region take some time to get the facts straight.
When the regional officials returned much did not change with regard to the explanation they gave and it was at this point the Chairman began to get impatient with the group. The DREO told the committee that no invoices were prepared by any supplier, but that it was his decision to prepare the cheques based on the Tender Board award.
“Mr. Chairman, I admit that the supplies should have been provided before cheques were prepared”. After further questioning it was realized that the Region had in fact prepared a number of cheques to suppliers that didn’t exist.
This was to ensure that monies are not sent back to central government and to ensure that their books were balanced.
The Chairman admonished the Regional officers and informed them that such practices are unethical and leaves room for serious irregularities and this should cease. He asked if the practice was still ongoing and was answered in the negative by the REO, Kim Williams Stephens.
“You are before the Public Accounts Committee, REO, and this is not a show court. This is a serious committee.” Ali said that should he find out otherwise he will recommend that sanctions be brought against the Region and its officials.
When the Auditor General Office did an audit of that Regional Council in 2015 he found that 240 cheques totaling $72.39M were still with the Regional Accounting Unit and the Sub-Treasury. Two hundred and twenty-seven of those cheques were returned to the Accountant General’s Department while the remainder is still sitting at the Region Six office.
The regional officials explain that efforts will be made to update and return the cheques so that they can be deposited into the consolidated fund.

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