Before we begin our final in a four-part series on the above subject, I refer to the comments of the Chairman of the Public Accounts Committee (PAC) on our two recent articles on the Fibre Optic Cable Project. This project commenced in 2009 and would have incurred expenditure totalling G$13.707 billion as at 31 December 2014, financed mainly from a loan from the China Export/Import Bank to be repaid over a 15-year period, commencing 2017. However, the project has since been suspended because of problems relating to the laying of the fire optic cables along the Georgetown/Lethem road. In the view of several ICT experts, it will take a herculean effort with further significant capital outlay if the project is to be salvaged. The economic feasibility to do so will first have to be evaluated.
While these two articles did not in any way seek to cast blame on the PAC for any failure as regards the expenditure on the project, it is important to note that the PAC’s primary responsibility is the examination of the public accounts, as opposed to the Auditor General’s report per se. It is accepted practice for the PAC to use the Auditor General’s report as a convenient starting point. However, to the extent that such reports do not adequately address major items of revenue and expenditure, it is incumbent upon the PAC to probe further into these items. A major setback for the PAC, however, is that it is yet to bring its work up-to-date since its last report was in respect of 2009, notwithstanding the efforts of the current Chairman. In order to deal with the backlog, the PAC decided to carry out a combined examination of public accounts for 2010 and 2011 but the related report is yet to be finalized and issued.
With the prorogation of Parliament and the announcement of the date for elections, the PAC is unlikely to meet until early August 2015. It is only after then that it would be in a position to examine the public accounts for 2012 by which time the 2014 Auditor General’s report would be ready for PAC examination. The PAC will therefore be faced with the uphill task of dealing the three years of accounts i.e. 2012, 2013 and 2014.
Need for revision of the accountability timeframe
Of several occasions we raised the issue of whether the accountability timeframe should not be revised, especially in the light of rapid advances in information technology. This is no reason why the Minister of Finance cannot prepare and submit to the Auditor General the public accounts within two months of the close of the year, instead of four months; and for the Auditor General to produce his report within six months of the close of the year, instead of nine months. In this way, the PAC can begin its examination on 10 July. By 10 August, the date the National Assembly goes into recess, it could complete its examination and finalise its report by 10th October when the Assembly resumes its sittings. The Assembly could then benefit from the audited public accounts along with the reports of both the Auditor General and the PAC before consideration of the national budget for the following year.
It is true that PAC members sit on other committees, and there are therefore competing demands for their time. However, in the interest of improved public accountability, the suggestion is worth the try. For example, by minimizing the involvement of PAC members in other committees, meetings could be held more regularly. Political parties also need to select persons to be Members of Parliament with appropriate skills to serve on various committees of the Assembly. Apart from the Chairman, the composition of the PAC does not reflect the kind of financial management expertise needed to properly scrutinize the public accounts. There is too much reliance on the Auditor General’s report as a basis for the PAC examination.
The Audit Office, however, has limited capacity and shies away from any detailed examination of politically sensitive areas, such as the Amaila Falls Hydro Project, the operations of NICIL, the Lotto funds, the Marriott Hotel, the Specialty Hospital, Guyana Forestry Commission, the Guyana Geology and Mines Commission, and the Central Housing and Planning Authority. In addition, many of the findings are routine and repetitive, and are in the nature of internal audit findings totally unsuited to be included in any report to the Legislature. Further, the quality of the Auditor General’s reports has left much to be desired, and while meeting the deadline is important, quality must not be sacrificed in the interest of timeliness. The size of the report also needs to be significantly reduced. And lest we forget, the Auditor General is yet to report on the expenditures on the 2005 Great Floods, the World Cup Cricket of 2007 and CARIFESTA X.
An added benefit of revising the accountability timeframe is that the national budget could be finalized before the end of the previous year, thereby obviating the need for the Minister to authorize withdrawals from the Consolidated Fund for the first four months of the year pending the passing of the Appropriation Act. The incurrence excess expenditure totalling G$4.554 billion in 2014, now the subject of judicial review and which had triggered the motion of a vote of no confidence in the Government, might have been avoided if the budget was approved before the financial year begins.
At the United Nations, budgets are prepared on a biennial basis, and by midnight of the last day of the biennium the General Assembly approves the budget for the next biennium. If the UN, comprising 192 nations, with its difficulties in agreeing on a position, can produce a budget before the financial period commences, how much does it take little Guyana to follow suit? The UN will soon be introducing International Public Sector Accounting Standards which require annual financial reporting, and hence an annual budget. However, in Guyana we are yet to promulgate accounting standards for the financial operations of government, although the Fiscal Management and Accountability Act of 2003 requires the Minister to do so.
Amendments to the Anti-Money
Laundering Legislation
For over a year prior to the prorogation of Parliament, all sections of the society were forced into hysterical reactions about the threat of sanctions being imposed on Guyana if the amendments were not made to the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Act of 2009 to bring it in line with the international standards. The hysteria grew greater and greater as Guyana defaulted on each of the several deadlines that the Caribbean Financial Action Task Force had set. There was a real danger that if sanctions were imposed the economy would grind to a halt as foreign outflows and inflows would have been subject to the greatest degree of scrutiny from the international banking institutions, resulting in significant delays in the processing of business transactions. Drug trafficking is linked to money laundering, serious crimes and corruption. Given the importance of having strong and effective legislation to deal with these issues, one would have thought that the appropriate amendments to the AML/CFT Act would have been passed in 2014. However, political expediency took precedence and the matter has now been placed on the back burner to await the commencement of the Eleventh Parliament. The overblown balloon has now been completed deflated!
Several US Department of State reports have singled out Guyana as a transit country for cocaine destined for Europe, North America and the Caribbean. According to the US Chargé d’Affaires, while there is evidence of progress being made to deal with the problem, the US continues to have concerns about the difficulties in obtaining convictions in local courts. Referring to the drugs found in a boat in the Demerara River, he lamented the absence of prosecution and conviction for drug-related offences. The Chargé d’Affaires, however, noted that this is not unique to drug trafficking and pointed to the need to strengthen the Judiciary.
Fighting corruption and
the Integrity Commission
There is no denying that corruption is taking a cancerous turn in Guyana, engulfing the country at an alarming rate, and eroding society’s social and moral fabric. Indeed, the country is struggling to swim against the tide of an ocean of corruption. Transparency International (TI) continues to rate Guyana poorly – lowest in the Caribbean except for Haiti. Yet we have not seen it fit to have a fully functioning Integrity Commission to monitor the assets of politicians and senior public servants to avoid the accumulation of wealth through the misuse or abuse of public office for private gain. Since the resignation of the Commission’s chairman in 2006, there has been no replacement, and the Commission has not been meeting since then.
According to the US Chargé d’Affaires, “Corruption is one of those things that is driven largely by perception. The perception of corruption whether it is objectively true or not impedes businesses’ willingness to invest, it causes lack of confidence in the government among the electorate so certainly it’s something that needs to be addressed”. He indicated that there is now very well-documented evidence that corruption impedes economic development and that TI has documented a “very serious perception of corruption within Guyana”. Despite the concerns raised by various stakeholders, we are yet to discern any willingness by the Administration to address the issue.
