Report of the Public Accounts Committee on the Public Accounts for the years 2004 and 2005.
This report was recently submitted to the National Assembly. The Report started by listing some of the general problems it observed in the government’s financial management. The Committee said that during its deliberation of the 2004 and 2005 Auditor General’s reports, a number of general problems which adversely affected the financial management system were identified.
Those problems included:
1. OVERPAYMENT OF CONTRACTORS
2. BREACH OF TENDER BOARD PROCEDURES
3. LACK OF MAINTENANCE OF LOGBOOKS
4. NON-COMPLIANCE WITH THE STIPULATED TIMEFRAME FOR THE CLEARING OF CHEQUE ORDERS
5. CAPITAL EXPENDITURE BEING MET FROM CURRENT ALLOCATIONS
6. WRONGFUL PAYMENTS OF SALARIES AND CONSEQUENTIAL DEDUCTIONS PAID TO AGENCIES
7. OUTSTANDING POLICE REPORTS
8. ABUSE OF EXTRA BUGETARY FUNDS
9. VARIATION ON CONTRACTS
10.HIGH COST OF MAINTAINING VEHICLES
OVERPAYMENT FOR CONTRACTORS
The report says that a number of ministries and regions continued to have make overpayments on contracts. The PAC in its report said that it has noted that some ministries and regions have made progress on this issue but some continued to be delinquent.
These included the Ministries of:
2. Public Works and Communications and
And Regions 1-3, 6, 7, 9 and 10.
BREACH OF TENDER BOARD PROCEDURES
There were various levels of non-compliance with the existing Tender Board Regulations relating to the procurement of goods and services and the undertaking of works, both capital and current by a number of agencies for the years 2004 and 2005, particularly where it relates to compliance with Tender Limits. In view of the fact that the last increase in Tender Board Limits was in November 2004 via the Procurement Regulations, the Committee recommends that the Tender Board limits be increased in the light of current prices.
LACK OF MAINTENANCE OF LOG BOOKS
The PAC is in report said that it noted that during the two years the control and use of government vehicles continued to be very lax resulting in log books not being kept or not being satisfactorily maintained. These agencies were found to be delinquent:
The Ministries of:
3. Labour, Human Services and Social Security and
4. Home Affairs
5. The Guyana Defence Force and
6. Regions 1-6 and 8
While the Committee recommended that Accounting Officers ensure that log books are maintained and closed at the end of the year, the agencies continued to ignore these.
NON-COMPLIANCE WITH THE STIPULATED TIMEFRAME FOR THE CLEARING OF CHEQUE ORDERS
All ministries, departments and regions are required to clear cheque orders with 16 days from when they are issues but there was an inability to do so and this was prevalent in
The ministries of:
2. Public Works and Communications
4. The Guyana Defence Force and
5. Regions 1, 2, 4, 6, 9 and 10.
CAPITAL EXPENDITURE BEING MET FROM CURRENT ALLOCATION
While all amounts budgeted are required to be expended in keeping with that which was approved by the National Assembly, the PAC noted that a in a number of instances where the Auditor General reported that Ministries, Departments and Regions were funding activities of a capital nature from amounts approved for the Current Expenditure.
This forced the Committee to recommend that they:
Collaborate with the Finance Ministry with the aim of determining or differentiating current from capital purchases/works and also adhere strictly to the regulations whenever a need exist to make capital purchases from current allocations.
WRONGFUL PAYMENTS OF SALARIES AND CONSEQUENTIAL DEDUCTIONS PAID TO AGENCIES
The PAC report says that the slow processing of pay change directives in several ministries and mainly in the Regions results in wrongful payment of salaries to employees after they had resigned and the consequential deductions being paid to various agencies without the necessary adjustments made to the payroll and the Ministries and Regions not being able to recover such sums or any at all expeditiously.
This was especially prevalent with respect to the employment of Teachers.
It was also noted by Auditor General that this state of affairs also resulted in these Ministries, Departments and Regions recording overstatements on their Appropriation Accounts as a result of the deductions being paid over to various agencies and the Ministries and Regions not being able to recover such sums.
In 2005 the PAC recommended that:
To strengthen the mechanism to expedite the flow of information from various schools/ministries so that the necessary adjustments could be made to the payroll in a timelier manner; that the Accountings officers should seek to discuss with the National Insurance Scheme and the Guyana Revenue Authority the possibility of crediting the amounts overpaid to the respective ministry, department or region’s account; and in instances where the Accounting Officers attempt to recover sums from the agencies proved futile they should seek to bring the matter to the attention of their subject minister.
OUTSTANDING POLICE REPORTS
The Committee in its report said that it is gravely concerned about the number of issues concerning the loss of public property which are currently with the police and have not been resolved or which were pending in the courts. It said that a number of issues are in relation to the Supreme/Magistrate Courts and are dated as far back as 1992 while others were during 2004 and 2005.
The PAC recommends that Accounting Officers: seek the advice of the Head of the Budget Agency, Home Affairs Ministry where matters were with the police and have long been outstanding; seek the advice of the Attorney General with a view of bringing closure to the court matters and where discrepancies and fraud were discovered actions should be taken and developed to avoid recurrences.
On January 1 2004, the Procurement Act 2003 became operational. This act provides for the regulation of the procurement of goods, services and the execution of works, to promote competition among suppliers and contractors and to promote fairness and transparency in the procurement process. Regulations for this Act were also made and came into operation on the 29 November 2004. However, although the Procurement Act to date has assisted in some instances in addressing the numerous concerns the Committee had over the years, it was noted at the time of the report: THE PUBLIC PROCUREMENT COMMISSION PROVIDED FOR BY THE ACT HAD STILL NOT BEEN ESTABLISHED AND THE PAC RECOMMENDED THAT THE ISSUE BE RESOLVED.
The PAC expressed concern of possible collusion between contractors and officials at certain agencies and recommended that:
1. Accounting officers should ensure that there are proper systems for the verification of works to be done and that ministries needed to ensure independent verification.
2. Not only contractors should be held accountable for sums overpaid but also the officer who certified the payment of such sums and
3. The Accounting officer should inform the National Procurement and Tender Administration Board of the names of the contractors and the amount overpaid with a view of preventing those contractors who were requested to repay overpaid amounts and failed to do so from obtaining future jobs or to assist in the recovery of over paid amounts from subsequent contracts.
4. Accounting officers should employ a mechanism within their building/engineering departments to improve the verification f projects to ensure accountability
MORE TO COME !!!