The Region 10 (Upper Demerara-Upper Berbice) administration breached Section 43 of the Fiscal Management and Accountability Act 2003 in 2019 since 228 cheques totalling $131.8 million were prepared for work that was still to be completed.
This information was revealed on Monday, February 12, during the 59th meeting of the Public Accounts Committee on the 2019 Auditor General’s (AG) report.
According to the AG’s report, the Regional Administration breached Section 43 of the Fiscal Management and Accountability Act 2003, which requires that at the end of each fiscal year, any unexpended balance of public monies issued out of the Consolidated Fund shall be returned.
This raised eyebrows of both government and opposition parliamentarians of the Committee, who proceeded to take the current regional official, Dwight John, and other representatives to task for allowing this to be swept under the carpet.
Minister of Public Works, Juan Edghill, who was visibly frustrated remarked “The cheques were cut for works not completed. The work didn’t do, how the cheques were cut if the work didn’t do.”
Former Regional Executive Officer (REO) Orrin Gordon, in his defence, told the PAC that actions had been taken in response to “situations confronting the administration at the time.”
Gordon explained, “There are some projects which are not going to be rolled over, and once it is not [rolled over], the (maximum) payment has to be made.”
The former REO reasoned that the regional administration opted to have these cheques prepared beforehand so the payments could be made once the work was completed. He also requested that the system of disbursing funds for projects not rolling over be reviewed so that such issues do not reoccur.
However, several committee members including Ganesh Mahipaul, Edghill, and Chairperson Jermaine Figueira, deemed this unacceptable, pointing out that this should not have occurred in the first place.
Mahipaul asserted, “Engineers, you must not subject yourself to instructions that are against the financial laws of this country… you cannot pay for work that is expected to be completed.”
The AG’s report cited that “Audit checks conducted on 20 January, 2020, revealed that there were 228 cheques on hand totalling $131.848 million.”
It added, “These cheques should have been refunded to the Consolidated Fund and the necessary adjustments made to the Appropriation Accounts. As a result, the Appropriation Accounts were overstated by the said amount.”
Further analysis of the cheques showed that the Ministry of Finance (MoF) cut 5,325 cheques totalling $4.425 billion for current and capital expenditure incurred by the Regional Administration.
However, 1,053 cheques totalling $775.817 million or approximately 18% of total expenditure were cut in December 2019 as shown in the table below.
Office and Field Supplies
The sum of $144.2 million was budgeted for the procurement of drugs and medical supplies under Health Services Programme.
The Regional Administration expended $14.192 million using its procurement procedures, whilst, an Inter-Departmental Warrant (IDW) for $130 million was issued to the Ministry of Public Health (MoPH) for the Ministry to procure drugs and medical supplies on behalf of the Regional Administration.
The Inter-Departmental Warrant №. 1/2019 was issued on 29 January, 2019. A Financial Return was received indicating that the full sum was expended.
However, the Regional Administration continued to receive drugs and medical supplies without the cost being stated on the documentation that accompanied the deliveries, which did not sit well with Mahipaul, Edghill, and Dr Vishwa Mahadeo.
As a result, it could not be determined whether the full value was received for the sum warranted to the MoPH, which Edghill deemed careless and unacceptable.
“How could you not determine the full value for these medical supplies, what nonsense is this; are we serious?” the minister stated while reminding, “A similar situation occurred in 2018, and now it has recurred in 2019.”
Former REO Gordon indicated that a list with a value for drugs and medical supplies was received from the MoPH, however, the amount stated was $169 million which was more than the amount warranted by the MoPH. As such, a request was made for a breakdown of the total cost to reconcile with the drugs received by the Region.
Capital Expenditure
The sum of $567.450 million was budgeted in 2019 for the Region to execute its capital programme. According to the Appropriation Accounts, amounts totalling $480.192 million were expended. Shown in the table below is the shortfall in capital expenditure for 2019 as per the programme.
It was explained to the PAC that the shortfall was mainly a result of the administrative building not being completed and approval granted as a multi-year contract and the non-construction of a nursery and primary school.
However, the AG recommended that measures be taken to ensure that activities and projects are executed during the earlier part of the year so that the intended benefits are not delayed.
Amounts totalling $353.480 million were budgeted for the Regional Administration to execute capital projects for Buildings. According to the Appropriation Accounts, the sum of $267.850 million was expended as of December 31, 2019, on 116 contracts as shown below.
Due to the COVID-19 pandemic affecting the country at the time and the related measures of rotation of workers and travel restrictions, physical verification for these projects could not have been undertaken.
Public works
Amounts totalling $108.800 million were budgeted for the Regional Administration to execute capital projects for Public Works. According to the Appropriation Accounts, the sum of $107.413 million was expended as of 31 December, 2019, on seventeen contracts as shown below:
Similarly, due to the COVID-19 pandemic restrictions affecting the country and the related measures of rotation of workers and travel restrictions, physical verification for these projects could not have been undertaken.
The PAC meeting also became heated as Edghill lashed out at Chairperson Figueira for not giving him a chance to say why hearings of the PAC were cancelled as was stated by Mahipaul who complained that the examination of Region Ten’s accounts was hampered because of three cancellations of meetings of the PAC.
He said that the Parliament Office would send out notices ahead of PAC meetings about cancellations due to the unavailability of members, and suggested more clarity should be provided since the Opposition MPs are usually available.
“I would like to suggest sir, that when the parliament or National Assembly staff decides to send an email of cancellation, it be specific,” Mahipaul said.
However, as the PAC member concluded his statement, Figueira interjected and stated that the matter must be discussed in-house.
“This matter would be discussed further, if it so pleases you, in-house. No further member would be given the floor to discuss this matter,” the Chairman ruled.
However, his ruling did not sit well with Edghill, who despite being repeatedly cautioned, demanded that his voice be heard.
“I will speak because Mr Mahipaul was allowed to speak. This is not a grandstanding,” Edghill retorted, even as he was told by the Chairman that he did not have the floor.
“You allowed Mr Mahipaul to carry on, on camera, and you interrupt him after three minutes, then you say no other member will speak. That’s nonsense! This is lawlessness and it must not be allowed to happen! Edghill declared.
