Process to hold money outside Consolidated Fund not followed – IIA Chair

US$18M signing bonus

The US$18 million signing bonus controversy has engaged the attention of the Institute of Internal Auditors (IIA) Guyana chapter, with the Chairperson of the body questioning the process Government used to keep the money outside the Consolidated Fund.

In an interview with Guyana Times on Tuesday, IIA-Guyana Board Chairman and Financial Consultant John Seeram noted that while the signing bonus could be held outside the Consolidated Fund, there were certain prerequisites.
“What is important is that once money is received, it should be recorded in the Government’s statements of assets and liabilities, comprising of the Consolidated Fund as an entity and there is the Deposit Fund as an entity and the Contingency Fund as an entity,” he explained.
“My view is that that US$18 million bonus could be deposited in the Deposit Fund bank account and be shown in the Deposit Fund as an entity, thereby showing up on the statements of assets and liabilities.”
He noted that only when it is appropriated accordingly could it be moved from the Deposit Fund. Asked whether this process was followed in the case of the signing bonus, Seeram replied in the negative.
“Not to my knowledge,” the experienced auditor said. “But I wrote an article suggesting the use of a deposit fund. I’m just waiting to see what happens.”

The bonus
Recently, local economist Ramon Gaskin said in a letter to the media that the Bank of Guyana’s financial statement was recently issued and there was no trace of the signing bonus.
The bonus became a matter of controversy last year after it was revealed that not only did Government fail to disclose that it had received the money since 2016, but also it had deposited it into a private account at the central bank instead of the Consolidated Fund.
Government had defended its actions saying that the money was placed at the Bank of Guyana since Government intended to use it to pay the legal team that would represent Guyana’s interest at the World Court on the border controversy with its western neighbour, Venezuela.
However, Gaskin on Monday wrote that, “The Bank of Guyana has published the list of 128 Government Account Balances at the end of January 2018 in excess of 36 billion Guyana dollars… the US$18M ‘Signing Bonus’ received by Guyana and allegedly placed in the account is not listed”.
But, when contacted, an aide to Finance Minister Winston Jordan told this publication that the money has not been moved, thus it could not have been spent. “It is still there,” the aide assured.
Minister of State, Joseph Harmon had also denied that the monies were used.
“The signing bonus is monies that belong to Guyana, but that bonus, wherever it is, will be placed into the Consolidated Fund and it is from that Fund that any team whatsoever will be paid,” he stated.
Although the legal team has already begun work and has completed Guyana’s submissions, which were filed with the World Court on Thursday last by Foreign Affairs Minister Carl Greenidge, Harmon told reporters that Government intended to follow prudent fiscal management policies regarding the use of the US$18 million.
“Whether (the legal team) work before or they work after, it is from the Consolidated Fund, these monies will come from (to pay them. But before that)… we will of course have to make applications to the National Assembly for its approval for these funds… It is just prudent fiscal management,” he stated.
Moreover, Natural Resources Minister Raphael Trotman, when probed on the whereabouts of the signing bonus, had declined to pronounce on the matter, but told media operatives that there was nothing sinister afoot if the monies were to be moved.
While Government Ministers have said that Section 37 (2) of the Financial Management and Accountability Act provides for public monies to be held in Extra Budgetary Funds and deposit funds until they are credited to the Consolidated Fund, there are steps to be followed.
Section 42 mandates that after a deposit fund is established, the Minister has to inform the National Assembly of the fund’s existence.
According to Section 42 (2) of the Act, the Minister also has to specify “the source or sources of the monies in the deposit fund; the purpose or purposes for which monies may be expended from the deposit fund; the banking arrangements for the deposit fund and the intended investment strategy for the monies deposited in the deposit fund.”