A deliberate act meant to perpetuate a lack of accountability

  …a serious indictment on the Auditor General’s Office – Ram

By Gary Eleazar

It was not by accident but rather deliberate that the Guyana Government did not operationalise two very critical modules of the Integrated Financial Management and Accounting System (IFMAS) for more than 10 years. This is the view held by Financial Analyst, Christopher Ram, who yesterday in a brief telephone interview with this publication weighed in on the predicament where two of the most critical modules of the $132M accounting system have not been put to use. The IFMAS system was designed with seven aspects, namely, the Appropriation, Expenditure, General Ledger, Budget Preparation & Reporting System (BPRS), Purchasing, Revenue and Asset & Inventory Modules.

Financial Analyst, Christopher Ram

The Purchasing and Asset and Inventory Modules are the ones that have not been implemented. Without the two modules in use, Ram said that this facilitates a lack of transparency and accountability. He observed that former President Bharrat Jagdeo, under whose watch the system was put in place, was not known for his respect for transparency and accountability. The unimplemented Purchasing Module seeks to provide the ability to create purchase requisitions and purchase order with self-creating commitments to reserve the necessary funds; provide the ability to record the receipts and return of goods and automatically update the purchase order to reflect the transactions; complete integration with the payment process to reflect payment for goods ordered and received and provide the ability to create an asset record when goods are received. The unimplemented Inventory/Assets Module seeks to provide the ability to create inventory and asset entries when entering a new record based on the requisitions; provide the ability to have automatic stock ordering when the system hits a user-defined reorder point; provide the ability for tracking issues and receipts; provide the ability to enter receipts for deliveries to stores via the Purchasing module; provide the ability to make adjustments to reflect inventory average and shortages and provide the ability to provide queries and reports on current inventory, stock activity and receiving reports. According to Ram, there is nothing to suggest that when the system was purchased, the two unimplemented modules were not also purchased, which raises serious suspicion, given the lack of accountability now in existence. Ram said another even more puzzling indictment is the fact that the Auditor General over the years has never flagged the situation in his report as being of importance and explained the consequences to the public funds by not having the two modules in place. “This is a serious indictment of the Auditor General,” said Ram, who also questioned whether there would have been conspiracy at work. According to Ram, the public has for too long allowed the Auditor General’s Office to flout its responsibility to the nation. The 2012 Auditor General Report only observed that the Purchasing and Asset & Inventory module is still to be operational. Over the weekend, the contentious issue was raised with none other than the Head of State, President Donald Ramotar and he committed to having his Finance Minister, Dr Ashni Singh meet with the press to provide answers to the numerous questions. IFMAS was implemented on January 1, 2004 under former President Bharrat Jagdeo. Its intention was to modernize the business of the Government. It is responsible for recording all financial data generated by the Government. These include the issuing of cheques, recording of warrants; contingencies fund advances and the generation of the annual financial statements. The accounting system was specially designed to suit Guyana’s financial landscape.

AG reports expose weaknesses of Gov’t.’s manual tracking

  - Ministries still to provide evidence to account for millions expended President Donald Ramotar at a recent press conference had stated that he is not too worried that billions in assets can go untraced despite two critical modules belonging to the Integrated Financial Management and Accounting System (IFMAS) have not been used for 10 years by the Ministry of Finance. The President said that the Ministry has “manual systems as their alternatives” to back up the shortcoming. Government actually bought the “reconfigured” IFMAS software at a cost of US$660,000 to modernize its business. Minister within the Ministry of Finance, Juan Edghill had also pointed to those very alternative systems in place of the two absent modules: Purchasing and Asset Inventory.

Auditor General, Deodat Sharma

Edghill also insisted that despite the non implementation of the two modules, the Ministry is currently generating “reliable and comprehensive” financial statements, which are used by the Auditor General (AG). While the Head of State and his Minister hold firm to the effectiveness of their “manual systems”, the Auditor General’s reports reveal a different side as it exposes the weaknesses of the manual alternative. An examination of the AG’s 2012 reports reveals just how effective government’s alternatives are in ensuring that millions or billions in assets and consumables don’t go untraced. A look at the Ministry of Public Works reveals the weakness of the manual system. The 2012 AG’s reports cited a discrepancy highlighted in 2011 in relation to a Toyota Carina AT 192 vehicle, PJJ 3886, which remains unresolved. The Ministry acquired the vehicle on November 3rd, 2004. The vehicle was bought for use by the Construction Manager of the Chinese Construction Company that had executed works on the International Conference Centre, which was funded through a grant from the People’s Republic of China. The vehicle was subsequently sold to a private individual for $1.24M even though evidence indicated that the Ministry had full ownership. Without producing evidence to the contrary, a senior functionary within the Ministry on June 5, 2012 gave credence to the sale and advised the Head of Budget Agency to facilitate the transfer of the property. Even though the transfer has been held in abeyance, the whereabouts of the vehicle was unknown to the Ministry and from all appearances, was released into the custody of the purchaser since July 2009. In the case of the Ministry of Education, the AG’S reports for 2012 said that the Ministry had still not taken steps to account for its expenditure, in that for the period under review, a total of 20 payment vouchers for expenditure totaling $2.393M were not presented for audit examination. As a result, it could not be determined the propriety of the payments made and whether value was received for the sums expended. A total of 11 payment vouchers for expenditure totaling $11.511M also remained outstanding for the year 2011. Also under unresolved matters, with regards to the School Feeding Programme in Region Nine, two warrants amounting to $40M were issued to enable preparation and supply of school snacks to 3,500 students across 43 villages. However, financial returns were not provided to account for funds expended on behalf of the Ministry. In the circumstances, it could not be ascertained whether the amounts were expended for the purposes intended. In the previous financial year (2011), there was poor accountability under the programme, as it relates to $42.999M expended to enable preparation and supply of school snacks to 3,814 students across 48 villages in Region Nine. As for the year 2012, the Ministry was still to provide records to validate spending amounting to $6.715M for the year 2007. The sum was expended on behalf of the University of Guyana (Berbice) for the purchase of library books, computers and accessories, completion of the science laboratory, and the payment of retention. The Ministry’s response to this was “The Head of Budget Agency indicated that efforts are still ongoing to locate the outstanding vouchers to be presented for audit scrutiny/examination.” In the case of the Georgetown Public Hospital Corporation, an examination of the payments revealed that the major contracts had an aggregated face value of $1.162 billion, of which the Corporation paid $1.043 billion during the year. The Ministry of Health was noted to have paid the sum of $117.256M to the contractor on behalf of the Corporation. It could not be determined whether the supplier had satisfied the requirements for bank guarantees with respect to the contracts, since these were not provided for examination. As for the Ministry of Health, specifically, The AG’s reports said that at the time of reporting, outstanding deliveries for the year 2011 totaled $59.835M, following the receipt of pharmaceuticals and other medical supplies to a value of $28.266M. The position remained the same for 2008, in that the Ministry is still to provide evidence to support deliveries valued at $79.262M. With the aforementioned examples highlighted, some financial analysts have opined that the Ministry of Finance should be ashamed to say that their alternatives are effective and should really reconsider its statement that millions in assets and consumables are not going untraced. It is clear that the manual systems cannot adequately keep track of government assets and expenditure until it’s almost too late. However, if the two vital IFMAS modules were implemented, there would be immediate tracking of discrepancies.

So we have been buying and selling state owned assets for over a decade with no official recording of these transactions.  Well done Jag-de-HOE.

You tief abee theese money in front abee thesse own eyes.

FIYA PUN YOU and you blasted tears will never out that FIYA.

Finance Minister advises Permanent Secretaries to take full responsibility
for IFMAS implementation

Georgetown, GINA, February 13, 2004

The Ministry of Finance noted at an internal meeting that Permanent Secretaries should play an integral part in the implementation of the Integrated Financial Management and Accounting System (IFMAS).
IFMAS is a computer accounting programme that allows for greater efficiency in financial transactions, especially in the payments of salary and allowances. 
IFMAS, a Free Balance design, ensures that at the end of the day each financial transaction is clear and transparent.
At the meeting held today, it was revealed that Permanent Secretaries, who are the accounting Heads of Ministries, Departments and Agencies, appoint junior staff to conduct financial transactions for salary payment. 
This could lead to deficiencies and incorrect entering of information with the new financial system. Deficiencies could lead to late payment of salaries for public servants. 
The Ministry is urging all Permanent secretaries to take note of the sensitivity of IFMAS and the importance of accuracy. 
IFMAS was implemented in January last and to date several meetings were held with accounting officers. These meetings are called with a view to perfecting the use of the system. 
TOP

Quoted from Chris Ram

http://www.chrisram.net/?tag=minister-of-finance

These were only a few examples of Dr. Singh’s “brightness”. Here are some others:

1. Every single audit report since Dr. Singh became Minister of Finance reminds us that “the Contingencies Fund continues to be abused”. And the abuser: the Minister of Finance in whom section 41 (2) of the Fiscal Management and Accountability Act (FMAA) invests sole powers and responsibilities over the Contingencies Fund.

2. Dr. Singh’s Finance Ministry has underwritten every one of the irregular transactions of the Jagdeo Administration since October 2006, including the infamous Pradoville 2 for which Dr. Singh’s NICIL allotted house lots to former President Jagdeo, Cabinet Members, members of NICIL boardand friends, all at below market price; computer purchases from a Brooklyn barbershop location; sole sourcing of school books for $90 million; disastrous multi-billion dollar road and other infrastructure contracts.

3. On all but one occasion of Dr. Singh’s presentation of the [annual] mid-year report under section 67 of the FMAA, the report pre-dates by months the date of its publication, prompting integrity concerns.

4. Dr. Singh has never once complied with section 21 of the FMAA dealing with conditional appropriations. Nor on his own recent admission in the National Assembly, has he ever complied with section 24 (4)of the FMAA, on each of the fourteen occasions he came to the National Assembly for supplementary funds, concealing the annual budget deficit.

5. Dr. Singh has begun to use creative financing to plug the ballooning budget deficit caused by over-spending and non-receipt of the Norway money. In 2010 he treated $11.117 billion as Miscellaneous Income, “the net result of the ‘closure’ of inactive accounts, and retiring long outstanding obligations in relation to the issuance and redemption of Government Securities.”

6. Dr. Singh was central to the sale of state property and the unlawful granting of tax exemptions to the Ramroop group. In these transactions, Dr. Singh had not one but three occasions to check the validity, legality and propriety of the transactions: as Minister of Finance, as Chairman of NICIL, and as a senior Cabinet minister. He missed them all.

7. As Minister of Finance, Dr. Singh controls the Consolidated Fund and has allowed the proceeds from the Lottery to be placed in a “special” account outside of the Consolidated Fund. He approves the operations of this extra-ordinarily special account from which only his mentor, former President Jagdeo could spend.

8. Dr. Singh was part of a transaction for $4 billion in which there was sufficient evidence to refer Minister of Housing Irfaan Ally to the Privileges Committee for allegedly misleading the National Assembly.

9. Dr. Singh has presented five budgets to the National Assembly totaling $627.5 Billion. During that time, we have had no natural disasters or economic shocks undermining the Budget. Yet, during the same period, Dr. Singh has returned to the Assembly with fourteen (14) supplementary appropriation bills covering over 440 transactions totaling $67.5 billion –conditions that would embarrass even a mediocre budget controller. For good measure, none of the transactions involving drawings from the Contingencies Fund, covering a minimum of $19.5 billion, was brought within the “next sitting” of the National Assembly timeframe required under section 41 (5) of the FMAA.

10. Dr. Singh has ministerial responsibility for the National Insurance Scheme and the Insurance Act. To him therefore, is due more than a quarter share of the blame in the Jagdeo-Dr. Singh-Luncheon-Gita Singh quartet for the NIS loss of $5 billion in Clico.

11. As Finance Minister Dr. Singh would have known of the mistake that led to the excessive VAT rate of 16%. In order to disguise the effect of the mistake and a windfall of close to twenty billion dollars, he sought supplementary spending provisions of $18 billion in the last two months of 2007! “Brightness” is certainly not the word to describe such shocking conduct. No wonder, neither Dr. Singh nor former President Jagdeo has responded to my several public challenges to them to release an unredacted copy of the report of the Barbadian consultant who was contracted to carry out the exercise. As a result the state has so far gouged the Guyanese taxpayer of more than fifty billion dollars.

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Fighting corruption is good thing. Replacing gov't. for that reason is a risky thing since no gov't is immune to corruption. Given the shameful history of the opposition i have no confidence that they will be a gov't with less corruption. On the contrary, they will be more corrupt.

I'm sure Jagdeo and his inside clan had a lot to do with the non-compliance.  Ramotar is being checkmate by these guys with every move to straighten thing out.  This is why an occasional change of Govt is the best model.

What you are saying is, if your spouse is cheating on you, it's a risky thing to replace her since you may have no confidence that her replacement would be better.

Mr Ashni Singh is a disgrace to the accountimg profession. Our professional laws require us to make effort to remove corruption. He did everything in his power to do the opposite for Mr Jagdeo and Mr Brassngton. He is a waste of his ACCA and PHD.