Post office audit showed liabilities exceeded assets by $575M

-Auditor General’s report

The most recent audit for the Guyana Post Office Corporation – for the years 2003-4 – showed that liabilities exceeded assets by $575M.

This was revealed in the 2010 edition of the Auditor General’s report which said that the finding indicated that the corporation “has significant going concern challenges and management has not shown evidence of decisions being made to reduce future losses and sourcing of finance for working capital support”.

According to the report, this was one of the reasons why the post office corporation’s audit attracted a disclaimer opinion for the years 2000-4.

A series of other problems was cited. These included there being no supporting documentation for the amounts shown as tax recoverable and a Government of Guyana credit balance which should have been transformed into debentures or debenture stock.

The corporation also reflected  $1.758B as outstanding from agencies but the majority of these balances were not reconciled and had not varied from the previous year.

“Certain agencies had balances owing to them but these were not offset. No provision was made for bad debts although tests revealed that balances were not cleared to date”, the Auditor General’s report said.

Further, it said that tangible assets totalling $59M could not be verified as a listing nor was a register provided. Inventory of $143M could not be confirmed. The report said that bin cards had not been maintained and no physical count was done. The corporation also had receivables of $244M. However, a schedule for all the balances was not provided and for those which were provided the balances could not be confirmed.

Said the report: “No reconciliation was done and test of subsequent payments indicated that these were not cleared off. There was no review for bad debts and management continued business with the same customers although these balances were not cleared. An aged listing was not available”.

Another problem was that the net overdraft balance of $365M included a cash balance of $155M and a net cash deficit of $537M for which no reconciliation was carried out. Added to this, the majority of payments for expenses could not be substantiated by supporting documents.

Post office payables which included significant balances saw no movement over the period audited and were not cleared off from the previous years. “There was no reconciliation to suppliers’ statement and expenses were not accounted for on the accrual basis”, the report pointed out.

GWI

GWI’s audit for 2009 and 2010 attracted a qualified opinion which the report defines as reflecting uncertainties of a fundamental mature in relation to amounts shown in the financial statements.

The Auditor General’s report said that 184 contracts totalling $2.036B for 2009 and 39 totalling $582.2M for 2010 were not recorded in the contracts register. Further, the report said, it could not be verified whether there were overpayments and/or variations to these.

An amount of $869.9M was listed as inventories. However, bin cards were only implemented for 2,553 of the 3,135 stock items for 2009 and 3,103 out of 3,629 stock items for 2010.

The Auditor General’s report also said that copies of purchase orders for 2009 were not presented for audit examination and a cash book was not maintained for the period of review.

While the sum of $5.075B was shown as total billings for 2009, the Auditor General’s report said that when its auditors attempted to verify the actual collections it was noted that there is a difference of $65.1M between the amounts shown as collected on the schedule and the amount shown as deposited in bank statements.

Correction

In yesterday’s edition on page 10 it was incorrectly reported that disclaimer opinions were issued for NICIL’s accounts for 2002-3 when it should have been qualified opinions.

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