2019 Auditor General report: PAC demands forensic audit of $269M in unaccounted drugs

…less than 10% of $299M budgeted for Region 3 reconciled

Representatives of the Public Accounts Committee (PAC) and the Finance Ministry, have called for a Forensic Audit to be conducted by the Audit Office of Guyana, into Region Three (Essequibo Islands-West Demerara), where $269 million worth of drugs purchased in 2019, could not be reconciled.

Questions about the $269 million were raised due to the findings in the Auditor General’s 2019 report. The money is part of $299.3 Million that was sent to the Region Three administration that year by the Health Ministry, to purchase drugs and medical supplies. But despite the full amount being spent by December 2019, documents to do a reconciliation of all the drugs purchased were not received.
Regional Health Officer, Dr. Erica Forde on Monday at a sitting of the Public Accounts Committee, explained that less than 10 per cent of the drugs purchased were reconciled with the Material Management Unit (MMU). This leaves $269 Million in drugs unaccounted for, with efforts to acquire the outstanding Combined Received and Issued Vouchers (CRIV’s), unsuccessful.
“For the year 2019, we would have searched MMU as well and retrieved some CRIVS amounting to $30.9 Million, when the reconciliation was done with the CRIVS that we found… it was less than 10 per cent of the CRIVS found,” Dr. Forde explained, confirming that neither the region nor the MMU could account for the $269 Million.
The situation resulted in Finance Secretary, Sukrishnalall Pasha calling for a forensic audit, since the absence of these source documents makes reconciling the drugs and medical supplies, impossible.
“I wish to confirm that the information provided by the RHO is correct based on what I was told a few weeks ago. So, the problem that we have right now, the source documents to do the reconciliation are not available. And in the absence of source documents, I would humbly request that a forensic audit be done.”
“Because without the relevant documents, we cannot perform any reconciliation. Without the source document, it would be impossible to do the reconciliation… we would be coming to the PAC for the next few years and be unable to complete the exercise,” Pasha said.
His call was supported by the PPP/C members of the PAC. However, Opposition members of the PAC called for the scope of the forensic audit to be expanded. In fact, opposition member Ganesh Mahipaul proposed that the forensic audit be expanded to include not only other regions, but also prior years.
“If we want to have a forensic audit, it shouldn’t be isolated to region three and 2019. It should be a holistic approach that targets, perhaps, 10 years back so that we can see what is it we have before us, and in an effort to fix it properly, in addition to the recommendations we made in the 2018 report to the national assembly, to further fix it for the betterment… so I would support the audit, provided it spans a 10-year period,” Mahipaul said.
His proposal did not find favor with government member of the PAC, Parliamentary Affairs Minister Gail Teixeira, who noted that prior to 2016, reconciliation of drugs and medical supplies were much more effective.
“This is not where we’re jumping like hop scotch, into a big area we’re not dealing with. We’re dealing with this audit of region three. And so I do not agree with the recommendations of Mr. Mahipaul, nor in relation to Ms. Fernandes. There has to be an answer why the drugs cannot be accounted for.”
“And as I said, if the drugs can be accounted for, there must be a paper trail somewhere. Or was the money used for something else? We don’t know. We can’t tell… and if in the Auditor General’s investigation, it finds that things were really hopelessly organised at MMU in that period, it may then recommend that it go broader than region three,” Teixeira said.
PAC Chairman Jermaine Figueira meanwhile noted that the scope of the forensic audit will ultimately be up to the Audit Office of Guyana, an independent agency. (G3)