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Another audit award

Nov 09, 2024 Editorial, News

…Editorial

Kaieteur News- Apparently, VHE Consulting impressed the Guyana Government.  It got another contract to audit ExxonMobil’s spending.  VHE just snared a contract for slightly over US$62M (GY$312,642,284) to audit ExxonMobil’s 2021-2023 expenses.  The Opposition AFC wasn’t happy how that award signing occurred, didn’t seem to think highly of VHE Consulting’s prior audit.

Specifically, AFC Chairman, David Patterson said this about VHE audit contract award, “We noted that the contract signing was done without the presence of the media, departing from earlier such contract signing. We see this as an attempt by the government to dodge questions on the performance of the company, as well as the contents of their report.”  There is much meaning in that phrase “dodge questions on the performance of the company” from the AFC chair.  It is reasonable to infer from his statement that there are some concerns about VHE Consulting’s work and output in the US$7.3B audit, which report remains hidden from Guyanese.  What did it look at, what did it do, and what about those other areas of possible inexplicable and unacceptable spending discrepancies?

If the PPPC Government is so confident about the “performance” of VHE Consulting, then why resort to shielding it from probing questions?  Audits of billions of US dollars expended by ExxonMobil should not be a leadership nor consulting company secret.  So why go to the length of what amounts to barring the media from the signing of the award?  Is this how the oil is being managed?  Is this what is celebrated as the openness of democracy for something as basic, yet so involved, as a big audit of a partner’s spending?  Has ExxonMobil not shown itself to be a partner that is more of a proven warrior that stands against Guyana’s interests, than as an ally working in a common cause?  For example, ExxonMobil is battling against Guyana over US$214M in audit findings by the British firm IHS-Markit, why must it be so?  It may be more appropriate to ask a sharper question.   Why does ExxonMobil have to be so money hungry, so penny grabbing, that even honoring its share of US$214M in findings from a legitimate audit is made to seem like the end of the world for the company?

There is something else that is noteworthy about the IHS-Markit audit and their findings.  The British company compiled US$214M in findings from an audit of US$1.6B in ExxonMobil spending.  The Guyana Revenue Authority agreed to settle for that number, despite having some objections.  What IHS-Markit flagged was equivalent to 13.375% of questionable spending by the company.  Meanwhile, in the VHE Consulting audit of US$7.3B in ExxonMobil’s expenses, approximately US$100M was the sum of findings.  It is remarkable that out of such a huge amount of spending, only slightly over 1.3% in findings resulted.  We at this paper are surprised, to put it mildly, and now share some points for Guyanese to think about.

We are surprised that ExxonMobil could have cleaned up its act, swiftly straightened out its self-advertised world-class accounting systems.  Though no two audits are alike, we are still surprised at that US$100M in VHE Consulting findings, which seems to indicate that ExxonMobil is billing Guyana fairly and cleanly with what it claims as expenses.  By way of a related digression, nationally reputable chartered accountant Chris Ram had done his own review of US$460M in ExxonMobil’s pre-contract costs and came up with close to 20% that failed to meet accounting standards, or fell in the realm of ‘suspicious.’ IHS-Markit flagged 13.375 in its audit (the GRA possibly had a greater percent), Chris Ram pinpointed 20% on a batch of earlier spending, but VHE Consulting only dug up about 1.3% in its audit.  Again, one audit is different from another like chalk to cheese, but the gap is troubling.  This could be the reason why the media was not invited to the last VHE Consulting award signing.  Who knows what questions may have been asked.

It would have made much more sense for a different company, a new audit face, to audit the 2021-2023 ExxonMobil expenses.  A new audit company could be keener to leave no stone unturned, giving Guyana probably better value for its oil dollars spent

(Another audit award)

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