THE OFFICE of the Auditor General’s value-for-money audit of the Old Age Pension programme has found that a number of safeguards that should be in place to protect pensioners and the state from fraud are not in place. The study has revealed that physical access to rooms at the Ministry of Human Services and Social Security where the database is located is not restricted, and that there is no security software on the server.
Further, it found that the contract with the printer regarding pension books had significant deficiencies, which resulted in weaknesses in the security and control of pension books.
The study also revealed that the Ministry did not design, control, nor have ownership of the software used for the printing of pension books. In addition, there were no measures in place to monitor the printing process and the quality of printed books. “As a result of the lack of control over the software and the printing process, there is a risk of fraud occurring,” the report says.
According to the report, the serial numbers of pension books issued to pensioners were not entered into the Old Age Pension database as a means of tracking the allocation of pension books and coupons to pensioners. “In addition, information on pension payments processed by the Guyana Post Office Corporation was not entered into the database. As a result, the Ministry could not match payments information to pension recorded in the database to ensure only eligible persons were in receipt of pension payments,” the report says.
It adds that without cost information entered into the database, the Ministry could not readily monitor pension programme costs.
The Old Age Pension programme in Guyana came into effect through the passing of the Old Age Pension Act, 1944, which sets out the eligibility criteria for the payment of Old Age Pension. The Act is administered by the Ministry of Labour, Human Services and Social Security. As at September 2009, there were 42,666 persons in receipt of Old Age Pension payments totalling $2.419 billion.
The report recommends that the Minister and the Head of the Budget Agency of the Ministry should ensure that the eligibility criteria applied for the qualification and receipt of Old Age Pension complies with the Act.
The report says that the Ministry has adopted a policy, with effect from 2005, whereby remigrants must have resided in Guyana for two years prior to application for Old Age Pension. “Consequently, all pensions paid to remigrants, based on the adopted policy, are outside the scope of the Minister’s legal authority,” the report concludes.
It says that although the Ministry has an undocumented internal policy which requires applications for Georgetown and its environs, and hinterland areas to be processed within five and 15 working days respectively, these targets are not being met. “On average, it took 12 to 36 days to process applications from Georgetown and its environs, and the hinterland areas respectively,” the report says.
Further, it says that in relation to hinterland areas, irregularities may occur from payments made to ineligible, deceased or non-existent persons, as a result of lack of verification of applicants and the manner in which payments are made in those areas.
Responding to the Auditor General, Permanent Secretary of the Ministry of Labour, Human Services and Social Security, Mr. Trevor Thomas said that draft recommendations to the Old Age Pension Act are currently at the Attorney General’s Chambers for his consideration and appropriate action. Further, he said that many of the recommendations have been noted.
Thomas said that with regard to the length of time taken to process applications, the Ministry will make efforts to ensure that pension applications are processed within the timeframe that is stipulated.
The PS explained that with regards to the recommendation about information on pensioners, it will be very hard to maintain a database of shut-ins. But he noted that the Ministry arranges to take pension books to the homes of shut-ins.
The PS said that many of the recommendations that have been noted will be discussed with the relevant agencies with a view to correcting them. The PS noted that the Ministry needed guidance on proceeding with some of the recommendations.