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Auditing Exxon’s US$9B

May 24, 2022 Editorial

Kaieteur News – The accountants and auditors have to know what is feasible in terms of time given the resources at hand. But to audit US$9B in cost recovery expenses representing some three years of activity by Exxon in a matter of four months looks like a real stretch. Auditing one year of such expenses in four months might be doable, but to demand that three years’worth of bills for that amount of money be completed in four months is pushing matters. The question is whether the man in charge of the nation’s oil is not setting up a situation where Guyana is being taken to the cleaners.
Professor Floyd Haynes, also an accountant, says he can get the job done in the narrow time slot demanded (“Govt. wants audit of Exxon’s 2018, 2019, and 2020 bills completed in four months” -KN May 22). His specific words are: “I have a dozen experts. And I have access to more in country. It is possible to get it done once all the documentation is streamlined but Exxon is an organised firm.” Maybe it is so, but we think that Professor Haynes is placing too much confidence in Exxon and its willingness to deal fairly and credibly with Guyana. It has not done so in a manner that is confidence boosting, with another project, where approximately 20 percent of just under a half billion (US dollars) submitted for cost recovery expenses raised concerns, and were questioned.
Moreover, it is surprising that someone of Professor’s Haynes’ calibre and experience did bring himself to agree to such a tight four-month frame. For such a short window of audit scrutiny places enormous pressure on he and his team, if they succeed in winning the audit contract, to get the job done competently and convincingly. We cannot help saying this, with due regard for the learned professor: this is already taking on the appearance of a rush job. It already gives off shades of what he himself said about the price, which Mr. Chris Ram thought was too high. What Professor Haynes had to say was this: “I explained it was just to open the door. It is also a good negotiating tactic to start high and then go back.”
We think that was well said by Accountant Haynes. But we wonder why he did not apply the same standard, as he did with pricing the audit bid, to the time to audit those US$9B in cost recovery expenses for three years. In other words, ask for a higher number of months to do the job, and then if and when bottlenecks and issues are resolved quickly and smoothly, surprise the Government and Guyanese people with a shorter completion time. This is what we believe should have been embedded in the negotiations about money and time relative to this pending audit assignment.
We are aware that negotiations and relationships usually involve some form of quid pro quo, some degree of giving and taking. It is so that all parties walk away with a sense of satisfaction at having agreed to what works because it was reasonable from the perspective of those at the table. This usually is what results when all the persons in the room are engaging in good faith, with no other considerations held out as carrots (or sticks), with what is practical, and makes for good sense.
We are trying hard, but we do not think that agreeing to four months to complete the auditing of three years of bills from Exxon would do justice to the interests of the Guyanese people who are the ones that ultimately have to foot that US$9B in bills. Even with a company that can be trusted, four months for such an audit looks steep. We say nothing about how trustworthy Exxon is, but let its own dealings with Guyana speak on that score. Come to think of it, more than four months may be required just to affix a rubberstamp to the volume of pages that would be part of such an audit. It is likely that that is precisely what is in the mind of those who demand such a timespan for completing this US$9B three-year audit.

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