Finance Ministry to set up special unit to track oil money

Apr 16, 2018 ExxonMobil

…Minister Jordan says current systems not good enough

By Kiana Wilburg

There is going to be an unprecedented flow of moneys into the Guyanese economy when oil comes on stream. But the current accounting systems are just not enough to keep track of the profits to come.
Finance Minister, Winston Jordan told Kaieteur News that the systems will have to be enhanced. He revealed that a special accounting unit will be established at the Finance Ministry to track oil revenues.
The economist noted that this is necessary since the current arrangement will not be able to specifically identify activities, returns, cash, etc. as it relates to the oil and gas sector.
He noted however, where the current accounting system called the Integrated Financial Management and Accounting System (IFMAS) is concerned, a new version has been put in place. The economist said that there were a lot of “teething problems” but now the Ministry has been able to move on to the Integrated Financial Management and Information Systems (IFMIS).
While the current system is inadequate, Jordan said that the next step would be in the context of all the assistance which has been given to the Ministry. He said that several recommendations were made and they have to be implemented.

Finance Minister, Winston Jordan

“In a sense, we even need to establish an accounting unit here. We hardly have trained qualified accountants here. We have no accountant here with an ACCA (Association of Chartered Certified Accountants). No accountant! In fact, we are operating here right now with one Accountant General and one acting Deputy Accountant General. You are supposed to have three. One left and went to the States Asset Recovery Agency (SARA) and one was implicated in the Lotto (scandal) and was sent off. ”
IMF RECOMMENDS
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.
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.”

Discover more from Kaieteur News

Subscribe to get the latest posts sent to your email.

Latest News