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Auditors question Natural Resources Ministry’s $15M admin cost to Guyana Gold Board
Auditors reviewing the expenditure of the Guyana Gold Board (GGB) have questioned a $15M expenditure to meet administrative cost to the Ministry of Natural Resources.
This was pointed out in the audit report of Maurice Solomon & Co. Chartered Accountants which examined the Board’s operations for the year 2017.
“We draw attention to note seven of the financial statements which shows a total amount of $15,247,945 under Administrative expenses – NRE. This amount relates to employment costs paid by the Board on behalf of the Ministry of Natural Resources,” the audit report states.
Gold Board’s chairman, Gabriel ‘GHK’ Lall
Further, the report points out that auditors were unable to verify whether there is a share agreement between the Guyana Gold Board and Ministry of Natural Resources and what constitutes expenditure and limits to be borne by the Board.
In 2016, the board under the Admin Exp-NRE line item spent $16.5M.
Auditors also continue to question the position of the GGB management that the entity is exempt from Corporation and Property Taxes.
“We were unable to ascertain the relevant authority that gives legal effect to this exemption,” the audit report states.
According to the report, the Guyana Gold Board has not paid any Corporation or Property taxes since its formation and no provision for such taxes has been made in the financial statements.
The Guyana Gold Board succeeded in recording a turnaround year in 2017 despite a number of challenging circumstances. These ranged from the inherited to the existential, and tested the dedication and resolve of management, staff, and the incoming board of directors. Still, some positives were achieved.
Chairman of the Board of Directors for the GGB, Gabriel ‘GHK’ Lall noted that the agency achieved a 75.1% reduction of its longstanding overdraft at the Bank of Guyana, which went from a January 1, 2017 balance of $18.9B to a closing balance of $4.7B on December 31, 2017.
“The then acting and now new General Manager, Miss Eondrene Thompson, is due full credit for this sterling achievement,” Lall stated.
He pointed out that another financial milestone was attained when the GGB went from an operating deficit of $194.1M on January 1, 2017 to an Operating Surplus of $648.3M on December 31, 2017.
He explained that the agency was confronted by significant matters. Among them, money laundering, worker misconduct, overdraft overhang, gold shipments to foreign partners, negative media coverage, and information security.
“In fact, gold shipments from the GGB to the Royal Canadian Mint (RCM), its longstanding overseas refiner, were halted briefly due to conflict-free gold apprehensions…the GGB was able to surmount this devastating setback through a combination of firm unambiguous commitments, follow-up operational reexaminations and overhaul, and other agreed-upon curative actions,” Lall noted.
It was last year that the GGB signed a new 3-year Collective Bargaining Agreement with the Guyana Workers Union, which was considered fair and reasonable, given the prevailing economic climate.
“Moreover, the opportunity was taken to tighten the existing disciplinary code, and especially as it relates to financial improprieties,” Lall stated.
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