Overpayment, breaches to country’s financial laws flagged in AG’s 2020 report

…hands over 2020 report to National Assembly

Auditor General Deodat Sharma said that the Audit Office of Guyana is well on its way to building capacity to monitor the local oil and gas sector, even as he handed over the 2020 Audit Report to the National Assembly.

The 2020 Audit Report was handed over on Monday at the Arthur Chung Conference Centre (ACCC) to Speaker of the National Assembly Manzoor Nadir in the presence of members of the Public Accounts Committee (PAC).
With Parliament reconvening on October 10, it is expected that the Audit Report will become a public document once it is laid at the next sitting. In previous Auditor General reports, issues such as overpayment to contractors and breaches to the country’s financial laws were flagged.
These matters usually come up for scrutiny during the PAC meetings. Additionally, there are prior year matters whereby the AG’s recommendations are at various stages of implementation. Questioned what to expect from the report, Sharma was tight-lipped.
“It’s the 2020 AG report. So, in 2020, January to September, there was the 1/12th budget. There was another budget from October to December. So, you wouldn’t really find much projects or expenditures, except for those couple months… but we still had to audit those expenditures, regardless,” he told the media.
In his remarks, Sharma meanwhile spoke of the efforts they have been making to build capacity for the oil and gas sector. In this regard, the Audit Office is receiving critical assistance from Canada through the Canadian Auditing and Accountability Foundation (CAAF).
“Being cognisant of the discovery of oil in Guyana, the Audit Office has been anticipating and planning for our role in the oil and gas sector,” the Auditor General said in his address to the attendees.
“Apart from staff being previously trained in the extractive industries, there is currently a staff within the office who is pursuing a Master’s degree in Oil and Gas at the University of Bedfordshire, London, while members in the Performance Audit Section with the help of CAAF are being trained on how to audit the oil and gas sector.”
Sharma elaborated on the partnership the Audit Office has formed with CAAF. He noted that coming out of this partnership, the Audit Office of Guyana will soon be submitting four performance audits.
“Additionally, 18 persons from the Performance Unit were trained in teaming up for successful audits. Plans are also in place for the Audit Office to benefit from two additional staff being trained in Performance Audit under CAAF Fellow’s Programme for nine months.”
“This fellowship programme is usually completed in Canada with attachments in the Audit Office of British Columbia, however, due to the current travel restrictions, this programme will commence with a virtual component,” the Auditor General said.
As far back as 2017, the Inter-American Development Bank (IDB) had flagged the independence and capacity of the Auditor General’s Office as one of the priority areas that have to be addressed in order to ensure there is transparency and accountability with regards to the oversight of the nation’s revenue ahead of oil and gas production.
Then Resident Representative of the IDB, Sophie Makonnen had been adamant that “institutional capacity in the public sector is one of the priorities that will ensure growth in social and economic development of Guyana; this is really important in the current situation in which Guyana finds itself and I refer to oil revenues which you are expecting in the next few years”.
Guyana, with US oil giant ExxonMobil as the operator, began producing oil on December 20, 2019, in the Stabroek Block. Guyana’s oil revenues are being banked in the New York Federal Reserve Bank, where it is earning interest.
As of last month, US$436 million, deriving from seven oil lifts since Guyana started producing oil, had been deposited in the Natural Resource Fund (NRF) following the receipt of payment for the seventh lift.