GRA capable of auditing US$460M pre-contract costs

Aug 19, 2018 ExxonMobil, News

… ExxonMobil already approached to submit info – Commissioner-General

By Kiana Wilburg

The Guyana Revenue Authority (GRA) has capable persons who can audit the controversial US$460M pre-contract costs which ExxonMobil inserted into its Production Sharing Agreement (PSA) with Guyana.
Confirming this recently was GRA’s Commissioner General, Godfrey Statia.
Statia, who is also a Chartered Accountant, said that indeed, GRA has four individuals who can conduct the required audit. He said however, that it might be at the expense of other industries. Challenged to say if he is also capable of getting the job done, the Commissioner General answered in the affirmative.
Further to this, the tax chief was asked to say if the government has, at any time, approached his entity to carry out the audit, since the Guyana Geology and Mines Commission (GGMC) lacks the technical know-how and resources to do same.
Statia said, “We don’t have to be approached. We have already asked Exxon for information regarding the pre-contracts. They have so far been compliant in supplying information we have asked for…So you can say that the process to audit has already been initiated by us.”

Chartered Accountant, Chris Ram

Finance Minister, Winston Jordan

ExxonMobil’s Head of Public Relations and Government Affairs, Deedra Moe

GRA Commissioner General, Godfrey Statia

Statia’s comments would be in stark contrast to those made by Finance Minister, Winston Jordan on August 8, last. Jordan told members of the media that Guyana currently lacks the capacity to get the audit done. “It is really a tough issue for us,” Jordan stated. He added, “We are still putting systems in place to do all the monitoring of expenses by ExxonMobil. I must admit that we hardly have any skills at the moment, but it is not as if we don’t audit this thing in 2015 then we’ve lost all chances…”
Since making such remarks, Jordan has been heavily criticized by local anticorruption advocates. For example, Chartered Accountant Chris Ram has said that Jordan’s comment is “the most astounding admission of incompetence” to have emanated from the government. “If you can’t audit US$460M how are you going to be able to audit US$4B? Who did Mr. Jordan consult to know that the country does not have the capacity?” Ram questioned.
The Attorney-at-law said, too, that the accounting professionals of the nation should take offence at Jordan’s statements and even the Audit Office.
He suggested that Minister Jordan should seek advice from the Minister within the Ministry of Finance, Jaipaul Sharma, who has successfully piloted several investigative and complex audits.
Ram had previously expressed the view that the US$460M which accounts for expenses by Exxon from1999 to 2015 is overstated by US$92M. He noted, too, that additional pre-contract cost should be expected for the period January 2016 to October 2016.
In May last, the International Monetary Fund (IMF) held a workshop with government ministers and other officials, warning them that one matter of priority is for GRA to move forward with preparations to effectively carry out cost audits. The Fund said that this is time-sensitive since the PSA introduces a “relatively short” two-year limit on the audit period.
Speaking to the Government’s deadline to carry out audits, ExxonMobil’s new head of Public Relations and Government Affairs, Deedra Moe, said, “The contract states that the government does have two years to audit costs incurred from the end of a year. We view Guyana as a partner, and we will work with the Government on timing on this and other reviews or audits.”
Government has less than two months to audit the controversial US$460M pre-contract costs.