IMF wants Govt. to review accounting systems

Feb 07, 2018 News

…to allow for accurate reporting of petroleum revenue

Finance Minister, Winston Jordan

Before oil revenue starts flowing into the economy by 2020, several international organizations and even local critics want to be assured that Guyana is equipped with robust accounting systems which would ensure accurate reporting on the use of those funds.
On this note, the International Monetary Fund (IMF) recently called on the Government of Guyana to review the nation’s accounting systems, which is usually referred to as the Integrated Financial Management and Accounting System (IFMAS).
The Fund said that the Accountant General’s Department (AGD), attached to the Ministry of Finance, should be tasked with the responsibility of undertaking such an analysis. The IMF said that while the Department will take into consideration the functionality of IFMAS, it should also determine the gaps and developments needed to be ready for recording and reporting of petroleum revenues.
Critically, the Fund said it will be essential that treasury reforms are coordinated with those of the budget process. In this regard, the international body said that in the future, the Office of Budget is likely to update a budget classification system to cater to the petroleum revenue that would be flowing into the economy.
The International Monetary Fund noted that the AGD also needs to align its chart of accounts with the revised budget classification. At critical parts of the medium-term planning process, the Fund said that key decisions will require the AGD’s inputs, therefore necessitating the Department to adapt from an annual to a medium-term mode of operations in line with budget execution.
The Fund said, “For example, it is important to decide how to show the (medium term) in- and outflows from the Natural Resource Fund in the budget documents as well as in the regular financial reports. Based on the draft Natural Resource Fund Law, the reporting requirements of Natural Resource Fund are comprehensive and the AGD needs to develop new skills and knowledge to be able to prepare the required reports. Therefore, the AGD should ensure that the current rules and procedures are updated and start building capacity to meet these demands.”
UPGRADE
The Finance Ministry has since moved ahead with the upgraded version of Government’s accounting software. This is according to Minister of Finance, Winston Jordan.
Going forward, Jordan said that the Government will be examining the effectiveness and user-friendliness of existing and alternative platforms. He said that this will be done to ensure that Government continues to improve on processing times within IFMAS.
He said, too, that the Government will also be moving to design the Integrated Financial Management and Information Systems (IFMIS) to replace the IFMAS.
IFMAS is intended to ensure accountability and transparency regarding how taxpayers’ money is budgeted and spent by the government.
A specially tailored system was first developed for Guyana by the Canadian company Free Balance and was secured at a cost of $132M. It came with seven components: Appropriation, Expenditure, General Ledger, Budget Preparation and Reporting System (BPRS), Purchasing, Revenue and Asset and Inventory Modules.
But after ten years, the Purchasing and Asset and Inventory Modules were not implemented.
In 2014, this newspaper carried a series of articles showing how liability for assets and monies could be improved if all the modules belonging to the IFMAS system were operable.
The Finance Minister recalled that in 2004, the past administration began the phased implementation of the system. This change saw a move from a completely manual system to an automated accounting system.
During his 2015 Budget speech, Jordan had revealed that after more than ten years and the expenditure of vast sums of money, the four installed IFMAS modules were “operating sub-optimally” or not to the highest standard.
He recalled that the country’s Auditor General, Deodat Sharma, had complained bitterly that the Finance Ministry’s system for recording gifts and assets is very poor.
Sharma in an interview with Kaieteur News had even stated that had the two unused IFMAS modules been operationalized, it would have made for an easier and more efficient audit of government books. With this position, the guardian of the national purse has continuously called for the two modules to be activated.