Auditor General unable to track over $13B belonging to three GuySuCo funds

Last Updated on Friday, 26 June 2015, 21:55 by GxMedia

by Zena Henry

At the end of 2013, the Auditor General (AG) was unable to verify the movement of over $13B which belonged to funds within the Guyana Sugar Corporation (GuySuCo). This is according to the AG’s 2013 report which was laid in Parliament, Thursday June 25.

Under the sub heading “Financial Report of the Deposits Fund, it was stated that, “Contrary to Section 42 of the FMA Act, deposits received during the year (2013) were paid directly into the Consolidated Fund (Account No. 407) and related payments were also effected directly from the Consolidated Fund.”

The document stated further that, “The accuracy of $1.365 billion shown as deposits held for investments on behalf of the Sugar Industry Labour Welfare Fund, the Sugar Industry Rehabilitation Fund and the Sugar Industry Price Stabilization Fund and outstanding advances totaling $12.869 billion as at 31, December, 2013, could not be verified.”

 While this inconsistency does not confirm wrongdoing with the sugar industry’s cash, it certainly prevents transparent tracking of this money and whether the figures amounts deposited and advanced are true.

Section 42 of the Fiscal Management and Accountability Act 2003, (FMA) requires the “establishment of  one or more Deposit Funds into which public monies shall be paid pending repayment or payment for the purpose for which the monies were deposited.”

Finance Minister Winston Jordan explained that prior to the FMA Act there existed the Consolidated Fund, the Contingency Fund and the Deposit Fund where the latter held state money designated for special purposes and thus could not be placed in the Consolidated Fund.

However when the FMA Act which according to the AG, “is the most vital legislation governing the transparent and efficient management of finances in Guyana,”  the law required that separate funds be set up for monies coming from those various funds- that is separate funds had to be created for the three GuySuCo funds to enable verification of the amount of money said to have been deposited and advanced.

However, this was not done and all the money, the AG said, was dumped into and extracted directly from the Consolidated Fund.  Minister Jordan suspects that the former People’s Progressive Party (PPP) administration may have been caught in a “quandary ” having to find a place to put the various funds.

He explained that, “when the original Deposit Fund was closed, they had to find a place to put all these monies, so they probably took a shortcut by placing the funds in the Consolidated Fund.” Jordan said it is not a practice that he would endorse and said that this area is one his Ministry plans to look into.

This is because not only does this action prevent transparency and efficient management, “it also gives a false balance of the Consolidated Fund.”

The act of placing deposits in the Consolidated Fund is a returning inconsistency highlighted almost every year by the AG.

On the other hand, the ailing sugar industry has been up to its neck in financial woes. Only weeks ago, the industry threatened to close its doors and send home thousands of workers if it did not receive some GUY$16B to keep it operating until year end.

The new government has since fired the corporation’s CEO, set up an interim board and allocated some funds to run major aspects of GuySuCo’s operations.

With gross failure in the industry, stakeholders declared that any government in place would want to be as transparent as possible with the industry’s money.