Auditor General Report: APNU/AFC cut $131M in cheques for projects in Region 10 despite no work done – PAC hears
…engineers warned not to follow instructions which breach fiscal laws
Officials from the Regional Democratic Council (RDC) of Region 10 (Upper Demerara-Berbice) were on Monday grilled by the Public Accounts Committee (PAC) as to why $131 million worth of cheques were cut and kept on hand, despite the work that was earmarked to be done and paid for not being carried out.
It had emerged in the Auditor General’s 2019 report that as many as 228 cheques, which amounted to $131.8 million, were cut for unfinished and future works. During the sitting, Regional Executive Officer (REO) Dwight John and his predecessor, Orrin Gordon, fielded questions on these cheques. According to Gordon, an explanation was given when the Audit Office of Guyana came to inspect their office.
“We usually get a circular from the Ministry of Finance, indicating that you have to close off operations by that time. At that time, works were still going on. There were rollover projects that were still in the system. We would have noted that a considerable amount of rollover projects were requested of this accounting entity, in addition to the fact that there were some major capital projects that were not moving on,” he said.
He explained that there was, therefore, a mixture of payments that were in the system. And while it was discussed extensively with the Auditor General Office at the time, in an effort to explain what was occurring, they were given a timeframe by which they should have cleared the cheques.
“If, for example, individuals didn’t complete, we would ensure that those are returned back. As you would see, some here that had to be returned to the Consolidated Fund. And the others that would have been completed, the cheques would have been paid off.”
Breach in law
However, Public Works Minister and PAC member Juan Edghill was unimpressed by this explanation, pointing out that the Region’s practices of cutting and holding cheques without turning them over at the end of the year, were breaches of the Fiscal Management and Accountability Act.
“Do you agree that there was a breach?” Edghill questioned, and Gordon agreed.
“So, we cut cheques that were not supposed to have been cut and kept? You can’t cut a cheque before the IPC (Interim Payment Certificate) says the work is complete.”
While Gordon acknowledged that the system was not a perfect one, it was one that allowed work to be completed without acrimony between the Government and the contractors. But Edghill noted the problems associated with his statement that a system existed which allowed the breaking of the rules.
“If it was a man got his IPC, you prepare the cheque, the Ministry of Finance cut it. And he come in January or February to pick up his cheque, because he didn’t come back, he was late, it’s a different story. But we’re talking here that the cheques were cut! And the works were not completed. That is the issue here! How the cheques cut and the work ain’t do?” Edghill further queried.
While Gordon called for changes to be made to the system in order to eliminate the need to keep these cheques on hand, PAC member Ganesh Mahipaul had a warning for engineers, urging them to “not subject yourself to instructions that are against the financial laws of this country… you cannot pay for work that is expected to be completed.” (G3)