No financial statements to verify lotto fund spending since 2015

-Auditor General’s report

Expenditure for 2017 and 2016 from the Lotto Fund (Source: 2017 Auditor General’s Report)

Auditor General Deodat Sharma has declared that the expenditure of hundreds of millions of dollars by the Guyana Lotteries Commission cannot be verified given the absence of financial statements for the years 2015 to 2017.

The 2017 Auditor General’s report, which was presented to the National Assembly last month, noted that the last set of audited accounts was for the year 2013 and at the time of the current report, the Audit Office was awaiting the signed financial statement for the year 2014 to finalise the audit. “However, financial statements were not presented for audit for the years 2015 to 2017,” the report highlighted.

It explained that the Government of Guyana and Canadian Bank Note Ltd (CBN) entered into an agreement establishing a Government Lottery, which was organised and conducted under the provisions of the Government Lotteries Act. Under this agreement, CBN is to pay Licence fees equivalent to 24% of gross revenue.

The Guyana Lotteries Commission, which was established in August, 1996 by a Cabinet Decision, manages the receivable licence fees and ensures that amounts spent are within the national sector and in accordance with the guidelines for access to the lottery funding, the report said.

The Lotteries Commission continued to receive proceeds from the Lottery, which were used to make payments approved by Cabinet, it said, while adding that the Commission is subject to separate financial reporting and auditing.

Further, it was explained that according to the Receipts and Disbursements Statement of the Ministry of Finance, for 2017, the Ministry budgeted $500 million for Lottery Receipts under the category of Miscellaneous Revenue and amounts totalling of $334 million were transferred from the Commission’s bank account to the Consolidated Fund.

Similarly, for 2016 $200 million was budgeted, while amounts totalling $600 million were transferred to the Consolidated Fund. It was noted that while the Ministry of Finance has been budgeting for Lottery Receipts, the net receipts are received at the end of the year.

According to report, amounts totalling $145.578 million and $234.787 million were recorded as having been spent for 2017 and 2016, respectively.

The report pointed out that in the absence of audited financial statements for the years 2015 to 2017, it was not possible to “verify the completeness, accuracy and validity of the revenue and expenditure for the Guyana Lottery Commission for those years.”

It was also noted that a special investigation was conducted by Special Organised Crime Unit (SOCU) into the Lotto Fund.

The Finance Ministry, in response, indicated that the Finance Secretary would write the current Chairman of the Lotteries Commission requesting the signing of the financial statement for 2014.

The Audit Office, in turn, recommended that the Finance Secretary follow-up with the Guyana Lotteries Commission to have the signed financial statements for the year 2014 submitted in order to finalise the 2014 audit and financial statements for the years 2015 – 2017 be submitted to the Audit Office for audit.

Last April, Chairman of the Commission, Natural Resources Minister Raphael Trotman, had opined that the commission should be dissolved as it was not functioning.

Trotman told Stabroek News that the commission had not met since its appointment in 2015.

He explained that since there is only one lottery company, CBN, the commission is not required to regulate payment of licence fees from several entities, while other functions, such as regulating the spending of the amounts paid, is not a statutory responsibility of the commission.

“Those duties have been taken on by the Ministry of Finance, so there is really nothing for the commission to do,” Trotman said.

Finance Minister Winston Jordan has repeatedly told Stabroek News that the commission is required to make decisions in relation to the fund and provide the ministry with a report of its decisions, while State Minister Joseph Harmon told a post-Cabinet press conference that any deductions from the fund must first be approved by the commission, which would convey that recommendation to the Ministry of Finance.

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