State Audits vendettas:

Ram $37M, Hinds $25M, Goolsarran $7M

BY EDWARD LAYNE

After months of dodging questions, the A Partnership for National Unity/Alliance For Change (APNU/AFC) government has finally buckled to pressure from the political opposition and transparency activists, and for the first time broken its silence on the secrecy surrounding the award of the multimillion-dollar contract to several close allies of the coalition to conduct forensic audits into state agencies.

Christpopher Ram

Finance Minister Winston Jordan

People’s Progressive Party/Civic (PPP/C) Member of Parliament Juan Edghill during Thursday’s sitting of the National Assembly, bombarded Finance Minister Winston Jordan with questions regarding the audits.

In response to a question regarding the procurement process which followed in the award of the audit contracts, Minister Jordan conceded that government single-sourced the forensic auditors in accordance with the Procurement Act.

“In accordance with Sections 28(b) of the Procurement Act 2003, Act No. 8 or 2003, the National Procurement and Tender Administration Board awarded the contracts on a single source method. The government decided to use this method for a number of reasons including the fact that there is a limited number of Chartered Accounting firms in Guyana, and not all of them offer forensic auditing services,” Jordan said in his response.

But this statement conflicts a previous position of Junior Finance Minister Jaipaul Sharma, who said government needed to get this underway as soon as possible and if it had to go through the established process, too much time would have been wasted, causing a late start in the audits.

With regards to financial burden the audits is placing on the state coffers, Jordan revealed that some $133 million has been expended thus far which are widely regarded as politically-motivated.

The bulk of the contracts went to Ram and McRae Chartered Accountants who bagged $37 million, while Nigel Hinds Financial Services was handed $25 million, and Anand Goolsarran $7 million.

The remaining $64 million in contracts were awarded to Nizam Ali and Company, Harryman Parmeswar, HLB Seebarran and Company, and TSD Lall Company.

Anand Goolsarran

Nigel Hinds

It is important to note that staunch APNU/AFC supporter Christopher Ram is a partner in the Ram and McRae Chartered Accounting firm, while Goolsarran is a former Auditor General under the People’s National Congress administration.
Asked about the legal authority under which the audits were conducted, the Finance Minister noted that it was being done in accordance with the Audit Act of 2004 and a June 2, 2015 Cabinet decision.

Jordon was also grilled on the origin of Terms of Reference for the auditors.
“A generic set of Terms of Reference was prepared by the Ministry of Finance, submitted to Cabinet in May 2015 and approved by Cabinet on June 2, 2015,” Jordan responded.

He was also asked to provide details on the academic, professional and experiential qualifications of the auditors, specifically whether the auditors were certified by the Institute of Chartered Accountants of Guyana. He stated that the auditors were qualified Guyanese Accountants and well known in their sphere.

“It is not necessary for the Individuals/Firms to have practice certificates issued by the Institute of Chartered Accountants of Guyana, since the results of such audits do not require the expression of an opinion on the financial statements of the entity being audited,” he stated, adding that only an external auditor of an entity is required to be in possession of such a practicing certificate.

He explained that Junior Minister of Finance Jaipaul Sharma is tasked with coordinating, supervising and reviewing the audits.

Following its assumption to office following the May 11, 2015 General and Regional Elections, the APNU/AFC embarked on forensic audits of a number of state agencies, an exercise which many criticised as “political with-hunting”.

The Opposition has been maintaining that government breached the procurement laws by single-sourcing the auditors, since the contract sum is way above the threshold as prescribed in the Procurement Act.

Last August, Leader of the Opposition Bharrat Jagdeo described as a “massive scandal”, the haphazard manner in which the government embarked on the audits, highlighting the fact that there was no public tender.

“This audit will run us probably into $150 million… Imagine if we had handpicked two pro-PPP/C people and give them contract without any public tender that could be $150M,” he had argued, showing the double standards that exist in society.
Jagdeo and his PPP/C have always maintained that the issue was not the audit, but rather the clear bias of those who were conducting the audits.