Presidential Advisor on Governance Gail Teixeira

– OAS urges strengthening of Audit Office’s fraud unit 

The Organisation of American States (OAS) said Guyana should develop an anti-corruption strategy, which could include the establishment of specialised units in the police force and in the Office of the Director of Public Prosecutions (DPP) to root out alleged graft in the Government system.

The body also spoke of the many incomplete investigations into state fraud and the authorities’ inability to prosecute alleged offenders of corruption.

The call is contained in a menu of recommendations which form part of the OAS-anti-corruption watchdog, the Inter-American Convention against Corruption and the Follow-Up Mechanism for its Implementation (MESICIC) final report on Guyana. The report was submitted last Friday when Guyana underwent a review by the body in Washington, U.S.A. Presidential Advisor on Governance Gail Teixeira represented Guyana at that forum.

Auditor General Deodat Sharma

The committee’s recommendation also comes against the background of comments made by Auditor General Deodat Sharma when it conducted an onsite visit here last year.

The OAS body, said Sharma, spoke about his department’s difficulties in prosecuting fraud and corruption in Guyana, which resulted in virtually no prosecution of fraud/corruption cases.

Fraud/corruption

The Auditor General informed the committee that both the Guyana Police Force (GPF) and the Office of the DPP are overloaded with cases and that fraud/corruption cases compete with other serious crimes such as murder, sexual violence and robbery.

The Auditor General also stated, according to the OAS report, that fraud cases are usually complex and therefore intimidating to those unfamiliar with the subject.

He said access to bank account information would assist in the prosecution of fraud/corruption cases but the Audit Act of 2004 requires obtaining a warrant from a court in order to obtain such information.

However, Sharma reported that some Magistrates require a criminal charge to have already been filed in order to issue such a warrant.

“In light of the situation described above and in the absence of detailed information regarding the final outcome of the fraud/corruption cases investigated by the Audit Office, the committee believes [the Audit Office] should consider strengthening its ability to prosecute fraud/corruption cases, especially those of greater importance or complexity, whether due to the level of the Government official involved or the amount of economic injury to the state,” the report stated.

To this end, the committee believes Guyana would benefit from establishing an articulated anti-corruption strategy, which could include the establishment of specialised anti-corruption units in the GPF and in the Office of the DPP.

Additionally, the committee reported that Sharma said that lack of staff and the geographic spread of the country have hampered the department’s ability to conduct special audits, particularly in the area of fraud at Government departments.

But the OAS body believes that the office, especially its Forensic Audit Unit, could be further strengthened to increase its capacity in investigating and uncovering fraud and corruption in Guyana.

Noting that Guyana has adopted measures intended to maintain and strengthen the Audit Office as an oversight body  and has established a Serious Organised Crimes Unit (SOCU) with an interagency National Oversight Committee comprising a range of institutions, the body recommends that efforts be made to strengthen the Audit Office, especially its Forensic Audit Unit, by ensuring that it has the human, financial and technological resources necessary for the proper execution  of its functions, bearing in mind the availability of resources.

Annual reports

The OAS’s recommendation stemmed from its perusal of the annual reports of the Auditor General, which provide information on fraud uncovered in the current and previous periods.

In respect to the 2012 Annual Report,  the Committee reported that there was also a loss of cash amounting to $206.379 million at the Accountant General’s Department Head Office.

This fraud was uncovered where payments of arrears pension and gratuity were made to 61 inactive, deceased and fictitious pensioners. At the time of reporting, five persons were charged by the police and the matter is before the court.

Besides, the body said over the years 1995 to 2001, there were nine matters which are either being investigated by police or pending before the Supreme Court.

It noted that in each case, the cases were based on apparent irregularities or suspected fraudulent acts perpetrated against the state.

The estimated losses, which remain outstanding to date, were valued at $14.476 million. The department had still not recovered amounts totalling $962,074, which remains outstanding in relation to 44 employees overpaid during the years 2007 and 2011.

According to the OAS body, from the information above, it observes that there seems to be an issue with the recovery of the amounts overpaid or fraudulently stolen from the state. It said too that it did not obtain complete information on the status of other cases of fraud, thefts, losses and overpayments other than that mentioned in the Auditor General’s Annual Report 2012.

Accountability

Additionally, the body has recommended that the Audit Office publish on its website all accountability documents and reports prepared by the agency and presented to the Public Accounts Committee (PAC), such as its three-year strategic plans and the annual updates thereof, as well as the independent auditor’s report to the members of PAC .

The anti-corruption body also urged that the Audit Office website be improved, by advertising a specific hotline telephone number and/or a (secure) hotline for complaints in electronic form from those interested in presenting reports, complaints or allegations of fraud or corruption.

Additionally, it called on the office to provide guidance on the website on how to present useful reports, complaints or allegations and on how the interested person can follow-up on its status.

The body also called for the promotion of awareness campaigns to educate the general public on how they can help the Audit Office in its functions, especially those of its Forensic Audit Unit, related to the uncovering and deterrence of fraud and corruption in Guyana;  provide support and incentives to its current staff to pursue and attain professional accounting qualifications recognised by the Institute of Chartered Accountants of Guyana; and/or take these qualifications into consideration when selecting future staff are also recommendations made by the body.

Quality assurance

It recommended greater efforts to ensure the Audit Office’s participation in the peer-review programme on audit quality assurance in the framework of the Caribbean Organisation of Supreme Audit Institutions (CAROSAI) and for the continued strengthening of the internal audit departments in the various Government agencies and consider gradually increasing their staff.

The OAS body further called on the Audit Office to prepare statistics on the amount ordered to be paid back to the state in cases of fraud, theft, losses and overpayments and the amounts actually recovered, in order to identify challenges and recommend corrective measures.

“Prepare comprehensive statistics on the outcomes of disciplinary investigative proceedings within the Audit Office showing how many investigations are under way, how many have been shelved, and with respect to how many the statute of limitations have expired, in order to identify challenges and recommend corrective measures,” the OAS body urged.