A FORENSIC audit conducted into the Guyana Gold Board has revealed that the agency recorded losses amounting to over $10B from 2012-2014. The audit was conducted by Ram and McRae.After the APNU+AFC government assumed office last year, it immediately embarked on forensic audits of over 40 state agencies and institutions. According to the report, over the three years the board made losses totalling $10.077B. Of this amount, the board recorded a gross loss of $9.71B (96.4%) in 2013 compared with a gross loss of $281M in 2012 and $79M in 2014.

The auditors revealed that because of the significance of the loss in 2013, they carried out an extensive month-by-month analysis for the year, in an effort to identify the source of the year’s loss. Matters taken into account included opening and closing inventory, purchases and sales of gold and price movements.

And what this revealed was that losses, as a result of the fall in gold prices, amounted to $9.9B, while other stock losses and exchange gains totalled $345M and $624M respectively – a net position of $9.7B.

The auditors reasoned that the difference could be due to a number of factors, including rounding and was therefore not further investigated. The other stock losses reported are a result of averaging of purity factors used in purchasing.

“From our inquiries, the board seemed uncertain how to respond to changing market conditions and continued to hold large quantities of gold, even as the price declined further” the report stated.

As of May of last year, the Gold Board had owed the Ministry of Finance some $8.7B for advances received in September 2012. At the same date, the balance on the Gold Board’s current account with the Bank of Guyana was an overdraft of $8.8B, making a total of $17.5B.

Further, it was noted that at the same date, the Gold Board had gold valued at weighted average cost of $7.7B which exceeded market value by approximately $72M.

“It does not seem that the Gold Board would be able in the foreseeable future to discharge its obligations to the Ministry of Finance or to liquidate its overdraft with the Bank of Guyana. Moreover, the Gold Board Act is silent on how permanent losses are to be dealt with and consideration needs to be given to re-capitalisation of the Gold Board,” the report stated. (Ravin Singh)