GFC’s $600M payments to NICIL unlawful

- Ram

Payments in the sum of $600M made to the National Industrial & Commercial Investments Ltd (NICIL), which       chartered accountant Christopher Ram says are unconstitutional, are  among the discrepancies in expenses and income uncovered by his independent scrutiny of recently released reports and accounts of the Guyana Forestry Commission (GFC).

“One expects Finance Ministers to be zealously vigilant and robustly protective of moneys payable into the country’s Consoli-dated Fund. Instead we have NICIL, under the successive chairmanship of two Finance Ministers, being used to siphon off hundreds of millions of dollars due

 Christopher Ram
Christopher Ram

to the Consolidated Fund. There can be no extenuating circumstances that could excuse let alone justify such unlawful and reckless conduct, fully aware of the nescient state of the Auditor Office,” Ram writes in a new entry on his blog, where he opined that the payments warrant legal action against both GFC and NICIL.

Ram has over the years repeatedly criticised the practice of channelling funds due to the Consolidated Fund into NICIL, which he describes as a mini, parallel Consolidated Fund.

In scrutinising of the annual reports and some of the accounts of the GFC for the years 2005 to 2012, which were tabled in the National Assembly by Natural Resources Minister Robert Persaud last December, Ram found that payments of $300 million were made in each of years 2006 and 2007.

“These payments are unconstitutional and unlawful yet the Auditor General gave a clean audit opinion for these years!” he writes.

He also charges that Auditor General Deodat Sharma signed off on financial statements approved not by the Board, which has the statutory duty, but by GFC Commissioner James Singh.

According to Ram, the Guyana Forestry Commis-sion Act of 2007 requires the GFC to submit, no later than six months after the end of the year, a report to the subject minister containing an account of its activities in such details as the minister directs together with a copy of its audited accounts for the year. The minister is then required to lay these in the National Assembly as soon as possible but not later than eight months after the end of the financial year.

He says Persaud, who was also responsible for the sector during his previous tenure as Minister of Agriculture, tabled the report and some accounts of the GFC for the eight years 2005 to 2012 inclusively.

Ram, who says there appears to be “a black hole” when it comes to reports prior to 2005, notes that the minister failed to table audited financial statements for the years 2010 – 2012. He says too that all of the financial statements are incomplete, including those on which the Auditor General has issued an opinion, which do not include even the limited notes to the financial statements.

While pointing out that items in the Income Statement have to be dealt with cautiously in any analytical exercise because there are no audited statements for 2010 to 2012, Ram found that huge fluctuations in both income and expenses stood out.

On the former, he says that except for royalty, there are huge fluctuations in income over the years which are not explained in the narrative annual reports.

“Surely citizens, if not the unalert parliamentarians, would like to know why License Fees and Fines moved from $181 million in 2007 to $336 million in 2008 only to fall back to $102 million in 2009,” he says.

Similar variations in the expenses, he adds, are also evident, such as in operational expenses between 2009 and 2011, and Administrative Expenses which doubled between 2007 and 2008, fell 23% in 2009 and then witnessed a 32% increase the next year.

Ram also says that in the six years between 2005 and 2010, the GFC paid out nearly half a billion in professional fees. He says the persons to whom these payments were made should be identified and the purpose of the payments should be explained.

Also highlighted are tax harges in the GFC’s financial statements for each of the years 2005 to 2010. Ram says that the GFC, which is not tax-exempt, discloses that it owes $1,126 million in taxes but has made no effort to pay any of its tax liabilities to the Guyana Revenue Authority. “It is not as if the GFC cannot afford to pay the taxes it owes: it has around $1,000 million in the bank,” he adds.


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