Auditor General warns of contract splitting at year-end

Dec 29, 2019 News

With a few days before the year closes, the Audit Office has warned Government’s account officers to beware of last minute spending.

Auditor General: Deodat Sharma

Auditor General, Deodat Sharma, has also advised against attempts to split contracts to avoid delays in procurement process.
The official made the statements over the weekend during an interview.
In the past years, the Audit Office, in its annual reports, has been finding cases of a rush in late December for regional administrations and ministries to issue contracts and spend remaining money budgeted for the year.
Under best practices, remaining money has to be sent back to the government’s treasury or Consolidated Fund.
According to the official, Permanent Secretaries and Regional Executive Officers must be reminded that December 31 is when all transactions have to be closed with no cheques for the year to be cut after that date.

President David Granger meeting with Permanent Secretaries earlier this year

“Government operates on a cash basis and not accrual. They are supposed to be cutting no cheques after December 31.”
Sharma said that especially with elections due on March 2, there may be attempts to deviate from procurement and other financial procedures.
“In a time when we are heading towards elections, any deviations will have serious implications.”
He said that in cases where a budget could not be passed, like for 2020, Government ministries and other entities can utilize 1/12th of the monthly expenditure based on the last approved national budget.
“This means that come 2020, the money to be spend has to come from that 1/12. It cannot be from the year 2019. It would be illegal to do so.”
Sharma made it clear that he is aware that happened in the past with the Audit Office flagging such transactions consistently.
“Let us say you try to buy stationery to run it for the next three months, it is illegal to use this year’s funds for next year’s.”
The Auditor General also warned about signing any projects and cutting any cheques that will see work spilled over to next year.
“After December 31, the remaining sums have to be returned to the Consolidated Funds. I am gonna be very serious this year about it.”
He pointed to the Fiscal Management and Accountability Act which cater for fines and even jail terms for Permanent Secretaries and REOs for breaching the regulations.
“My people will be checking on December 31 and we are going to be signing off on those cheques. So no cheques should be cut after that date.”
With regards to contract splitting, the official said that in the past there was evidence that projects were broken into several parts so that they will fall within the approval limit of the region or the accounting officer.
“We will be looking at cases of these nature. We cannot do business the same way,” the official said.
The Audit Office of Guyana (AOG) scrutinises the expenditure of public funds on behalf of Parliament. The office conducts financial audits of all publicly funded entities, including donor-funded entities, local government agencies and trade unions, in Guyana.
The Constitution also secures the independence of the Office, describes its principal functions, and articulates provisions to govern the appointment of the Auditor General.

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