The Guyana Defence Force did not take the requisite steps to secure vouchers totalling $1.6B for examination according to the 2011 Auditor General’s Report on the Public Accounts of Guyana.
The report, tabled in parliament recently, said that at the time of the audit of the GDF, 2,054 payment vouchers totalling $1.668B for expenditure under current appropriations were not presented.
“This circumstance resulted in the failure to determine the completeness and accuracy of the appropriated expenditure, together with whether value was received for the amounts expended”, the Auditor General’s report said.
Despite the large number of vouchers unavailable and the sum they represented, the Audit Office only said that systems should be put in place to ensure adequate accountability. Critics of the report have said that this was the type of discovery that the Auditor General should have taken a harsher stand on and included in his executive summary.
The defence force’s response to the unavailability of the vouchers was that the army had taken note of the issue and “would like to reiterate that the Sub-Treasury is the custodian of all vouchers and therefore should be in a position to make them available to the State Auditors for inspection”. The army added that efforts were on to “establish the whereabouts of the vouchers in question”.
This was what the report had to say in response to the army: “The Audit Office recommends that the Guyana Defence Force put systems in place to ensure that there is adequate accountability for payment vouchers and supporting documents, so that these could be provided for audit in a timely manner”. This response indicates that there would likely be no further examination of this matter until next year’s report.
Accountability problems in the army have cropped up in previous reports of the Auditor General. Indeed, this year’s report noted that a total of 1,259 cheque orders totaling $1.792B remain outstanding for the years 2008, 2010 and 2011. The report noted that the army is required to clear cheque orders within 16 days after issue through the tendering of bills and other supporting documents. However, the audit report said that these cheques were being cleared as long as four months later.
In its explanation, the army said “a continuous process is being undertaken to clear all outstanding cheque orders”. The Audit Office’s recommendation was that the army “adhere to circularized instructions in relation to the clearing of cheque orders”.
Problems were also detected in fuel procurement for the army. The Auditor General’s report said that for 2011, the army purchased fuel from a local supplier valued $462M however the records of the force showed payments for only $384M. Further, contrary to the cash-based method of procurement the army at the end of the review period overpaid GUYOIL amounts totalling $35M.
The army’s response was that with respect to the $77M, warrants for the various GDF outlying locations would account for the difference in outlay. In relation to the overpayment of $35M to GUYOIL, the army said that there was a prepayment arrangement with the oil company and a credit balance is expected to be reflected in GUYOIL’s accounts.
Also highlighted by the audit office was the army’s contract register which it said was not properly written up. The army’s explanation was that the “record was in place but the information contained therein was not adequate to satisfy the need of the Auditors. Advice is being sought on whether there is a more appropriate format in which this record should be written up in an effort to satisfy the need of the users”.
It was also pointed out by the Audit Office that the force has still not produced documents in the form of bonds and insurance valued at $1M under the contract awarded for the building of the arms stores complex at Camp Ayanganna. In the circumstances, the Auditor General’s report says it is unable to verify the propriety of the payment and considers it an overpayment.
The army’s response was that the sum was paid to the contractor as part of the contract but the GDF could find no evidence that the security amount was deposited at the finance department and “so the organization accepts the responsibility for not exercising due diligence and has pledged to prevent this from reoccurring”.
