–special audit cites glaring infractions

-over $5M spent in less than four months

THE Guyana National Newspapers Limited (GNNL) has, over the past five years, been the victim of not just political interference, but also imprudent decisions of the previous management who did not have the company’s or employees’ best interests at heart but rather its finances, which were used without discretion or proper compliance with existing policies.

A series of indiscriminate spending was particularly evident between June 2018 and September 2018, when the company had at its helm, a manager, who is a known member of the A Partnership for National Unity + Alliance For Change (APNU+AFC) Coalition.

Notable infractions during that period were so great that the company’s Board of Directors at that time – comprised mainly of known affiliates of the APNU+AFC – had to commission a special audit of the activities; this was done by Chateram Ramdihal Chartered Accountants.
The audit firm was formally asked by the Board of Directors to conduct a special audit on the overall management and governance of the GNNL in the areas of financial management, human resource management and administrative management for the period June 1, 2018 to September 10, 2018.

The objective of the audit was to determine whether there were mismanagement /excessive spending of funds and whether funds were expended in accordance with relevant principles, rules and regulations, and internal control procedures. It was revealed that $5,460,897 was spent without proper adherence to the company’s policy.

Based on a report seen by the Sunday Chronicle, the audit was conducted using the guidelines as set out by the company’s policy manuals, and it was found that there were several instances where GNNL’s tender board rules and procedures were not adhered to.
It was also found that contracts were not prepared for services acquired by the company; payments were made on invoices with inadequate details; payments were made without passing through the established approval process; and payments were made in the name of individuals which were different from the name on the invoices submitted for payment.

The audit also revealed that payments were made on invoices that bore no mark of authentication, such as a business stamp or signature; cash advances given to a former General Manager for overseas and local travel were not cleared by providing the necessary documents to support expenditures.

Ultimately, there was a clear deviation from the company’s approved budget /plan for 2018 without prior approval. The audit firm indicated that some $4,384,869 was expended through 18 transactions without the provision of two or more quotations, as prescribed by the company’s tender board rules and procedures.

Further, $1,682,554 was expended through nine transactions that did not receive the approval of the company’s management tender committee. In a more detailed breakdown of the indiscriminate expenditures, the audit firm related that a General Manager and the former marketing coordinator travelled to New York for the resuscitation of the New York Edition of the newspaper.

In the absence of a tender committee, the General Manager was expected to seek the approval of the minister with responsibility for information, but there was no formal document to substantiate that the correct procedures were followed. The trip, which appeared more self-serving than professional, cost the company $736,028.

“We did not see the approval of the corporation tender committee/minister for this expenditure as required by the tender board rules and procedures. We also noted that to date [at the time the report was submitted in 2018] the relevant documents were not provided to support/clear the advance given to offset expenditures,” the audit firm said.

In the period under review, another large sum was expended on repairs to the company’s vehicle, used by the General Manager, without the requisite approval. The repairs cost the company $721,800.
Not only was the expenditure not authorised, but the audit revealed that there was no contract for work done and payments were made to individuals despite the invoice being in a different name, without the relevant documents connecting the individual to the invoice, such as business registration or receipt for reimbursement.

Additionally, there were no payment receipts nor evidence of work, certified satisfactorily completed. Invoices provided for payment were also not authenticated by business stamps nor official signatures.
Another instance of indiscriminate and unauthorised spending was seen in the alleged ‘enhancement’ of Guyana Chronicle’s social media presence, for which $2,346,549 was expended. This was the case although the company’s plan/budget for 2018 did not cater for such an expenditure.

According to a breakdown of the allocation, some $454,000 was expended to livestream videos; $404,000 on Facebook boosts; and $1,488,049 to establish a social media department. That aside, the former General Manager spent $2,584,925, to purchase office furniture and equipment that were not provided for in the company’s plan/budget for 2018.

Due to non-adherence to the tender board rules and regulations and lack of adequate documentation, the audit firm was unable to determine whether the company received value for money from any of the expenditures. The former manager has since been severed from the company, but the effects of his actions still haunt the company to this day.

Imprudent management coupled with political interference in the affairs of GNNL has left the company with a task of not only rebuilding the image of the newspaper, but also staying afloat by managing mounting liabilities created mainly by legal suits against the company.
Judgements have already been awarded against GNNL to the tune of over $50 million. Some of the judgements against GNNL include Yokohama Trading, whereby the court awarded $12.5 million; Pasha Global, whereby the court awarded $12.5 million; and Clifton Bacchus, with the court awarding $27.5 million. In these cases alone, GNNL was exposed to claims for over $6 billion.

Further, based on court documents, should the judgement in some of the pending cases be in favour of the plaintiffs, the company could suffer further losses of millions of dollars more. The mounting liabilities, coupled with the effects of the novel coronavirus (COVID-19) pandemic, are not only restricting the company’s ability to provide salary increases and conduct other critical administrative work, but are also driving the entity to insolvency.

According to GNNL’s current Board of Directors, the company faces an uncertain future, adding that without intervention, the requisite capital expenditure to continue operations cannot be contemplated. Further, efforts are being made to monitor the legal claims, as well as other areas of impropriety, illegal spending and uncleared monetary advances taken by former general managers of the company.
Minister within the Office of the Prime Minister, Kwame McCoy, had said that the new management of the company is working through the adversities to ensure that employees remain away from the breadline.

“We have to continue to work this through to be able to make sure we save the workers… because many workers rely on the company to make a daily living and to earn a livelihood.

“We have skilled people and professionals and it is a task for us to make sure that the government, the People’s Progressive Party/ Civic (PPP/C), creates a pathway to the survival of the company and its workers,” Minister McCoy related.