Natural Resources Ministry corrected APNU/AFC breaches to the law, Procurement Act – AG

…contract staff earning over $300M transferred to pensionable establishment

The Natural Resources Ministry has received a commendation from the Audit Office of Guyana in its 2020 Report, which states that the ministry corrected a number of breaches to the law, including breaches to the Procurement Act.
In Auditor General Deodat Sharma’s 2020 Audit Report, it was noted that there were three recommendations made in the previous 2019 Report. These recommendations pertained to breaches to circularized instructions on how to deal with contracted employees, which occurred under the former A Partnership for National Unity/Alliance For Change (APNU/AFC) Government.
In the 2019 report, it was found that $316.6 Million was paid to only 88 contracted employees, taking up 93 per cent of the Ministry’s employment costs. The Auditor General had found that 58 contracted employees were earning between $200,000 and $400,000, while 22 were earning above.

The recommendation was that these employees be moved to the pensionable establishment. In the 2020 report, it turns out that this recommendation has been heeded. According to the Auditor General in updates on prior year matters for the Ministry of Natural Resources, this recommendation has been “fully implemented.”
Another recommendation for the Ministry back in 2019 was to avoid sole sourcing contracts, a breach of the Procurement Act. The 2019 report had found that the $93.2 Million contract administered by the Guyana Geology and Mines Commission (GGMC) to construct a Warden’s Quarter and Office Building in Region 7 was sole sourced.
“Section 28 of the Procurement Act states that the procuring entity may engage in Single Source procurement when, the goods or construction are available only from a particular supplier or contractor, or a particular supplier or contractor has exclusive rights with respect to the goods or construction, and no reasonable alternative or substitute exists. As a result, it could not be determined what were the justifications for awarding this contract via Single Sourcing to GGMC,” the 2019 report states.
According to the 2020 report, however, this recommendation was also fully implemented. But a third recommendation, for the Ministry to avoid having cheques on hand at the time of reporting, is only partially implemented.
“The Ministry continued to breach Section 43 of the Fiscal Management and Accountability (FMA) Act which stipulates that all unspent balances be returned and surrendered to the Consolidated Fund at the end of the fiscal year,” the Audit Office said in 2019.
“Audit checks revealed that the Ministry processed 182 cheques totaling $77.771M from the Consolidated Fund on\after 31 December 2019. As a result, the Appropriation Accounts would have been overstated by the said amount.”
In its response, the Ministry had said that expenditure was carried out in keeping with the Ministry’s Work Plan and Procurement Plan. They also noted that a review of the programmes and figures spent also reveal that the Ministry was consistent with implementing its targets from March to November 2019, with the highest percentage expenditure of 14 per cent being recorded in the month of May.
The Ministry had also claimed that they were a Non-Sub Accounting Agency and as such, all vouchers were submitted to the Finance Ministry for processing of payments. In its recommendations back then, the Audit Office had urged the Ministry to comply with the Fiscal Management and Accountability Act and ensure payments are processed in a timely manner. (G3)