A TOTAL of $133,045,900 has been spent on some 45 forensic audits funded by the APNU-AFC-led administration since it took office in May.An additional five audits are being funded by the Inter-American Development Bank (IDB).

Former Junior Finance Minister under the People’s Progressive Party (PPP), Juan Edghill, had asked Finance Minister Winston Jordan to disclose the amount of money spent on the forensic audits, among other queries he had.

According to documents presented to the National Assembly yesterday, 17 firms have been recruited by the government to conduct the audits. Those firms — Nigel Hinds Financial Service; Ram and McRae; HBL Seebarran and Company; Harry Parmesar; John Henry Barnes; Donna Ellis; Dr. Anand Goolsarran; Thomas Nestor; Azzarudeen Haniff; Drubahadur and Company; Lester Bowen; Nizam Ali and Company; Goorwattie Kaladeen; Maurice Solomon; P.K.F Barcellos Narine and Company; TSD Lall and Company; Saykar Boodhoo; and Charles Sugrim — have all been contracted by the government to conduct audits on several state entities.

Nigel Hinds Financial Services, HLB R. Seebarran and Company, and Azzarudeen Haniff are also conducting audits that are funded by the IDB.

“The audits are being done in accordance with Section 4 (4) of the Audit Act 2004, Act No. 5 of 2004, which states: ‘Notwithstanding anything in this Act or any other law, government’s right to conduct or cause to be conducted internal audits remains unimpaired’,” said the Finance Minister in response to a question of cost posed by Edghill.

He also said that Cabinet, via a decision dated June 2, has approved the forensic audit of selected entities, projects and funds.

The answers to the questions were laid in the House yesterday.

Accounting firms Ram and McRae, Nigel Hinds Financial Service, and Dr Anand Goolsarran received a significant portion of the contracts. Ram and Mc Rae Chartered Accounting firm received over $37M in contracts; while Nigel Hinds Financial Services received $25M, and former Auditor-General Dr Anand Goolsarran received almost $7M.

SINGLE-SOURCE
Jordan assured the House that the procedure followed in awarding the contracts was single-source, in accordance with Section 28 (b) of the Procurement Act 2003, Act No.8 of 2003.
“Qualified and available individuals/accounting firms,” he said, “were identified to conduct the internal forensic audits. These individuals and firms were allowed to study entities and submit cost proposals.”

The Finance Minister noted that factors that informed the proposals included the level and number of staff to be assigned to conduct the audit.
“Negotiated costs,” he said, “were consistent with (in some cases, even lower than) what are generally paid by the Audit Office of Guyana for the services of technical experts and chartered accountants to audit the accounts of an entity on behalf of the Auditor General.”

Earlier this month, the Ministry of Finance disclosed that 23 of the audits were completed by auditors, while the remainder was near completion. Audits were conducted into the following government companies: NICIL/Privatisation Unit, Guyana Oil Company Limited, National Communications Network Inc. (NCN), Property Holdings Inc., Guyana National Printers Limited, Guyana National Shipping Limited, Guyana National Newspaper Limited, Atlantic Hotels Inc. (Marriott), GNCB/GCFS-PHI, Guyana Power & Light Inc. (GPL), Special Investigation into Financial Irregularities at GPL, Lethem Power Company Inc., and Guyana World Cup Inc.

Several statutory bodies were also subject to the audits, namely: The Central Housing & Planning Authority (CHPA), Deeds and Commercial Registries Authority, Environmental Protection Agency (EPA), Guyana Energy Agency (GEA), Guyana Forestry Commission (GFC), Guyana Geology & Mines Commission (GGMC), Guyana Gold Board (GGB), Guyana Information News Agency (GINA), Guyana Office for Investment (GO-Invest), and the Guyana Rice Development Board.

In the case of public entities, projects and funds, the MMA/ADA, National Frequency management Unit (NFMU), National Drainage & Irrigation Authority, National Sports Commission, Pesticide and Toxic Chemicals Control Board, and the Guyana Revenue Authority (GRA) are being audited.

In the case of statutory corporations, the Cheddi Jagan International Airport (CJIA), Post Office Corporation, New Guyana Marketing Corporation, Demerara Harbour Bridge Corporation and the Guyana Water Inc. were selected for audits.

Special bodies such as the Dependents Pension Fund, Ministry of Agriculture (Hydrometeorological Services), Passport & Police Office, Student Loan Revolving Fund, Sugar Industry Labour Welfare Fund (SILWF), CARIFESTA, Lotto Funds, MCYS Art Development Fund, Ministry of Home Affairs (Water Cannon Purchase), Ministry of Human Services (Old Age Pensions), National Insurance Scheme (NIS), E-Government, PetroCaribe, GPHC – Special investigation into financial operations and functioning of Drug Procurement Operation, Ministry of Housing Scrap Metal Unit, and the Ministry of Health – Special investigation into financial operations and the functioning of Drug Procurement Operation, all comprise the 50 entities that have been subjected to the audits.
TERMS OF REFERENCE
Meanwhile, the terms of reference (TOR) for the forensic audits, along with the qualifications of all auditors, were submitted to the National Assembly for perusal.

According to the TOR, the objectives of the forensic audits are to determine the entity’s adherence to, and fulfillment of, principles of corporate governance; assess and test systems; and detect any instances of corporate malfeasance and inefficiency for remedial and/or judicial interventions and systems realignment; determine the authenticity and validity of significant commercial and financial transactions entered into by the entity with related parties, suppliers and customers; and measure the extent of potential prejudice the entity may have suffered through such dealings, if any; carry out a comprehensive financial systems audit which should look at all systems, decisions and practices which have underpinned the entity’s finances; and test and assess financial discipline at all levels.

Additionally, the auditors may conduct a human resources audit, which should include key issues like manpower policy and needs determination, selection and recruitment regarding philosophy, grading and departmentalisation, payroll system and management, performance, culture and whole policy on advancement and promotions, labour issues, skills development and deployment.
The planning culture of the entity, entity’s manpower and skills development policies, to equip its key functional areas with strategic competences needed for migration to a digital era and beyond are also to be determined by the auditors, who are also required to gauge the entity’s readiness to do business in an environment characterized by open competition locally, regionally, and globally; as well as the removal of statutory sources of revenue, including subsidies.
REPORTING
No later than 14 days after the completion of field work, the auditing firms have to submit a “comprehensive report to the Minister of Finance, highlighting consultant or firm findings’ recommendations on corrective action to be taken, and specific recommendations geared towards greater and better financial management, accountability and corporate governance.”

In the event of the discovery of malfeasance, the consultant or the firm is required to “bring the matter of the illegal or dishonest activities to the immediate attention of the Minister of Finance. In addition, to recommend to the government any action to be taken to institute appropriate disciplinary action which may include prosecution,” the TOR stated.

By Ariana Gordon