–for putting its financial affairs in order

DESPITE some areas of oversight by the Guyana Defence Force (GDF) in its financial operations during 2015, the entity was congratulated by the Public Accounts Committee (PAC) for arresting matters of financial mismanagement.
On Monday, Chairman of the PAC, Irfaan Ali said, “I’m pleased with some of the improvements that have been made. I think you are genuinely trying to improve things and I want to commend you.” He was at the time addressing Quartermaster Colonel Paul Arthur, along with other GDF officials responsible for financial management.
The Audit Office in its report for 2015 noted that while steps have been taken to improve some of the problems highlighted in the report, firmer actions are needed to correct areas with the same irregularities which have been recurring for consecutive years.
In the case of cheque orders, it was observed that six cheque orders totaling $1.212M remained outstanding for 2014, and in 2015 there were 33 totaling $82.642M which were outstanding at September, 2016.
The audit office had recommended that the administration of the GDF continue the process of having the cheque orders cleared and ensure all items paid for were supplied in a timely manner. Since that recommendation, it was reported that all outstanding cheque orders for 2014 were cleared.However, five totaling $8.033 are still outstanding for 2015.
PAC member, Juan Edghill questioned the reason for the outstanding cheque orders, and was informed by Col. Arthur that those were overseas cheque orders for payments for items that were imported.

“We have cleared all cheque orders for 2015,” said the GDF officer who was quick to note that there is a new system in place whereby to receive a new cheque order,the old cheque order would have to be cleared first.
Colonel Arthur said the new system is quite effective and noted that the cheque orders are being cleared faster.
Meanwhile,another PAC member, Volda Lawrence questioned the non-registration of employees of the GDF with the National Insurance Scheme (NIS) and the Guyana Revenue Authority (GRA). In 2014, 33 employees were not registered with NIS and 146 had temporary numbers while in 2015, 35 were not registered and 302 had temporary numbers.
The Audit Office had recommended that the administration of the GDF expedites the process to ensure all persons are registered and have permanent Insurance numbers. Col. Arthur noted that the process is an ongoing one to ensure that employees are compliant but to date there are 39 employees with temporary registration numbers while all employees have been registered.

Asked what controls have been implemented to ensure that employees have permanent numbers, Col. Arthur said the Force would have removed the delinquent employees from their payrolls to ensure they comply. That system worked but before that action is taken; he noted that the employees have to be written to first.
In the case of the overpayment of salaries totaling $1.090M for 2011-2013 and 2015 and deductions totaling $325,000 to specific agencies, it was recommended that the Force continues to pursue the recovery of the identified amounts.
Thus far, $365,000 was repaid on the overpayment in 2015. The sum of $715,000 and deductions totaling $325,000 are outstanding. It was noted too that for the years 2012-2013, letters were sent to the persons who were overpaid informing them to refund the money and advertisements were also placed in the newspapers.
The PAC asked Arthur what further action has been taken to recover the overpayments. Lawrence asked, “could you kindly say what measures were taken against the officer (s) who signed off on these projects?”
In response, Col. Arthur said no punitive action was taken but noted that the Force received approval to write off the payment. “No action was taken against the engineering officer,” he said. This prompted PAC Chairman, Mr Ali to ask what the normal practice is when overpayment is done.

“We have never taken any action against the engineer,” responded Col. Archer. Jermaine Figueira called for punitive measures to be put in place if an officer is found guilty of overpayment. That officer has since been removed from that department.
Similarly, the PAC questioned whether the overpayment of $216, 250 to the contractor on a contract for the sum of $1.952M during the year 2012, for the rehabilitation of Artillery Barracks, Base Camp Stephenson, Timehri has been recovered.
The GDF said that a letter dated November 10, 2016 was sent to the Finance Secretary requesting a write-off of the overpayment since the contractor has died. Additionally, the Defence Board by way of a letter dated April 24, 2017, granted its no objection to the write-off as losses.

There were other instances of overpayment to contractors by the GDF. In one case, $2.374M was overpaid to the contractor who was hired to rehabilitate the Barrack Base at Camp Kanuku in the sum of $9.966M.
The Audit office recommended that the overpaid amount be recovered, and called on the Force to ensure that the completed works were accurately measured and quantified before payments were made to contractors for works completed. The PAC was informed that the works on the Barrack Base have since been completed.
Additionally, the sum of $262,000 was overpaid to a contractor hired to rehabilitate the canteen area at Camp Stephenson to the tune of $8.657M. $158,000 of the sum was refunded by the contractor leaving $104,000 outstanding. It was noted that the site was revisited and work revalued and the overpayment now stands at $158,000, the same amount refunded on December 29, 2016.
As such, the GDF representatives came under fire for lack of proper monitoring and control mechanisms to which Col. Arthur noted that at the time of the mishaps, the officials had just returned from training in Cuba. “In 2015, these were inexperienced… [and] had just returned from Cuba.”

PAC Chair, Ali made it clear that in a number of instances, there were severe breaches of which the National Procurement and Tender Administration Board (NPTAB) was uninformed of, noting that the actions of the officers have left the GDF exposed to possible financial loss.
Meanwhile, it was discovered that there were 11 cheques on hand totaling $67.251M and have become stale dated. Those cheques should have been refunded to the Consolidated Fund. Currently, there is one cheque on hand at the Sub-treasury in the sum of $168, 875, which is related to a direct payment. That cheque date was updated to January 18, 2017.
PAC member, Nigel Dharamlall asked, “Why were the cheques not refunded to the Consolidated Fund?” Col. Arthur explained that most of the cheques represented “remained payments from items ordered from contractors.”
However, the PAC Chairman made it clear that there is no excuse for breaching the Fiscal Management and Accountability Act. He instructed the GDF to adjust its schedule in such cases and work to minimize financial mismanagement.