Audit flags spending by Sherod Duncan at GNNL

Sherod Duncan
Sherod Duncan

An audit into Sherod Duncan’s stewardship of the state-owned Guyana National Newspapers Limited (GNNL) has found that in excess of $5 million was spent on 21 transactions which did not adhere to the Tender Board Rules and procedures which govern the corporation.

Duncan has however argued, in his response to the auditor, that in the absence of the Board of Directors of the newspaper  “any approvals that were needed at this level were done by the Subject Minister.”

“The subject minister was briefed at all times, in the absence of the Board on the business of GNNL, giving his approval where practical and necessary,” Duncan repeatedly noted.

Auditing firm Chateram Ramdihal Chartered Accountants Professional Services Firm, was contracted by the Office of the Auditor General to conduct a special audit into the overall management and governance of the GNNL for the period of June 1, 2018 to September 10, 2018.

In their draft report submitted to the Board of GNNL on January 23 and seen by this newspaper, the auditors note that tender rules were flouted, services were acquired by the company without contracts, payments were made on invoices with inadequate details, without passage through established approval process and on invoices that bear no mark of authentication such as business stamps or signature.

Additionally cash advances given to Duncan for overseas and local travel are still to be cleared as he has not provided the necessary documents to support expenditure while the company’s personnel policy and procedures manual was ignored during the recruitment, termination and dismissal of several employees.

Duncan was appointed General Manager in June and immediately began to aggressively upgrade the company’s social media presence making several expenditures which the audit notes were not part of the GNNL’s 2018 Budget. Costs associated with the Social Media Department alone totaled some $2,346,549, none of which was budgeted for.

“It is best practice that any deviation from the company’s approved plan is sought at the level of the Board of Directors or the subject Minister in the absence of a board before implementation. No approval was seen in this regard,” the report stated.

Additionally Duncan travelled to New York and Lethem as part of different promotion campaigns which cost the company $936,028.

The New York trip which took place in the company of the marketing coordinator for the resuscitation of the publication’s New York edition cost in excess of $736,028, but according to the report “there was no approval from the Minister for such an event and to date, no relevant documents were brought forward to support these expenditures.”

Duncan in his response argued that the relaunch of the New York Edition was approved by the subject Minister.

He noted that while overseas relaunching the New York Edition “our team encountered challenges with establishments, such as the hotel where they were booked, accepting cash. Consequently in the absence of a company credit card the US Distributor and Focal Point Person undertook to pay for same and make other critical payments from his credit card in exchange for the cash they had on hand”. 

Duncan maintained that every effort is being made the get the relevant documentation from this person.

Similar questions surrounding the spending of $200,000 on a July 2018 trip to Lethem were not answered.

Also unanswered were questions related to the spending of $721,000 to repair one of the company’s vehicles used by Duncan.

The embattled General Manager is accused of making payments outside of the established approval process and in the absence of a contract to validate such. Payments in this area were also made to persons whose name did not appear on the payment invoice for which no receipts were provided nor was the work certified satisfactorily done.

“The air condition unit was serviced in May at a cost of $22,000 and again in August at a cost of $50,000,” the report states adding that “repairs were done by a mechanic other than the company’s pre-qualified mechanic.”