Forensic audit underway into financial irregularities, procurement breaches at GWI – CEO

Amid several damning revelations into the financial and procurement operations at the Guyana Water Incorporated (GWI), a forensic audit is now underway to investigate these issues.
At a press conference on Friday, Chief Executive Officer (CEO) Shaik Baksh underscored that the probe was necessary into the financial irregularities and procurement breaches within the utility entity. The Special Organised Crime Unit (SOCU) was also called in to investigate.

Over the course of four years, an internal audit would have found that some $1.8 billion was expended to purchase SeaQuest (a water treatment chemical) which involved another company that led to a violation in the procurement laws.
“The first one relates to the SeaQuest. This was a chemical mix which cost us $1.8 billion over four years and it relates to importing this dried mix from a company called Aqua Smart in the United States, for which the management saw that they need a middle man. They have a middle company doing the procurement and then mixing, batching the product and transporting it to the regions. A middle man was there, breaching all the tender processes. There has been double charging in the batching, mixing and transportation. Huge sums are involved there,” Baksh pointed out.
Along with this issue, fictitious charges and questionable delivery of goods were unearthed by an internal auditor which will also come under the scrutiny of the forensic investigation. Baksh noted that one person has already been dismissed in relation to this matter.
“There were fictitious charges inserted on transportation invoices. We have had to dismiss one employee. A clerk was left in charge of this operation and top management was approving. There was also questionable delivery of goods. For example, the clerk was signing on behalf of regional authorities and the internal auditor cannot find any evidence that the product was being delivered to the regions on some occasions. Yet claims were made.”
There are other cases where monies were released to contractors but these works remain unfinished. This specifically speaks to the Vlissengen Road to Newtown Kitty project, where the performance bond had expired.
“There was contract splitting also. They breached everything…Vlissengen Road to Newtown. The contract sum was $123 million but the contractor was paid $114 million or 93 per cent of the contract sum and only 11.2 per cent of the pipe-laying process was done…We had no alternative but to go to the court. We have this contractor in court right now and a manager was dismissed,” he explained.
Millions of dollars were also released for the construction of a new building in Region Five but it remains 80 per cent complete.
To compound the current irregularities, there is a backlog of audits, dating back to 2018. In the recently concluded 2017 audit, it was found that $73 million could not be verified. The company is hoping to erase this backlog by the end of the year.
“You have a backlog of unaudited accounts. The years 2013 to 2015, you had a timely reporting, audit and audit reports going to the Parliament and Ministers and so on. But they lagged so as I speak in 2020, we only completed 2017. We did a lot of work and…the external auditors have issued a qualified opinion of GWI’s financial statement in 2017,” Baksh said.
Meanwhile, when asked whether the utility company has been making any profits, the CEO responded in the negative. As such, he encouraged consumers to ensure that their dues are cleared.
“GWI is not in a profit-making position. One of the big challenges is the collection of revenues. I went out to the media and pleaded with our customers to make payments. Come forward and pay because we have a service to offer, in terms of treated water especially. The energy cost is over $200 million a month so we need you to pay up your money,” the CEO added.