Follow regulations or face sanctions- Ministry of Finance, Finance Secretary tells Regional Officials

GINA, Guyana, Monday, February 27, 2017

The Finance Ministry’s Finance Secretary Dr. Hector Butts, today, reminded Regional officials that they needed to follow the rules and regulations.

Dr. Butts was at the time addressing the Parliamentary Public Accounts Committee’s (PAC) extraordinary meeting at Parliament Buildings.

Speaking to Regional Executive Officers, Regional Chairpersons and other top officials from across the country, Dr. Butts, who is responsible for designating the individuals/ parties as head of Budget Agencies for various Ministries, opined that what was missing was an understanding of the fundamentals of their roles, “specifically as Heads of Budget Agencies.”

His role, today, was to deal with the overarching problem of managing public finances. “Many of you know I carry an open door policy in which I seek to address as much as possible any emerging problems.”

The senior Finance Ministry Official made his statement after the issues between Regional Executive Officers and Regional Chairpersons arose in the handling and accounting for funds issued to the Regions. These issues were discussed during the PAC meeting.

Dr. Butts impressed upon the more than 25 officials that they had a responsibility to implement measures to prevent fraud, embezzlement and misuse of public funds. He reiterated that if explanations given by those responsible were not forthcoming or understood, then “we have to start thinking about what can be done or ought to be done to streamline our thinking, or bring heads of agencies or parties in line with what is expected.”

The approximately 50 Budget Agencies covered by the Finance Ministry will be guided soon from the implementation of an integrated financial management system. This system, Dr. Butts explained, will enable the Finance Ministry to have access to information that enable better accountability. He mentioned the issue of procurement breaches, which he said will not be accommodated.

“We will have to tighten our belts here because we will have to be looking at how we deal with excess breaches here, especially in terms of looking at possibilities of sanctions, if necessary.”

Dr. Butts reminded that misuse of funds by public officials could result in fines of up to $2M and imprisonment for as many as three years, if found guilty by a Court of Law.

In closing,  he urged that the forum be used to ensure that the management of public funds is done in a transparent and accountable manner, with value for money.

The Senior Finance Ministry official was preceded by PAC Chairman,  Irfaan Ali’s opening presentation in which he stressed that the PAC meet with all stakeholders, including Ministerial Works Committees and technical officers to understand the issues affecting regional finances. He noted that with the exception of a few Regional Chairmen in attendance, quite a few were absent for various reasons.

He added that many of the Regional Financial Committees were not functioning hence the need to summon the officials. He cited the lack of proper minutes after several meetings.

Ali also raised the issue of contractor overpayments, unauthorised payments for variation works and other issues,and failure to document work changes. The officials were reminded that all extra funds needed to be returned to the Contingency Fund.

The PAC Chairman also reminded that many of the problems were not only occurring over the prior two years, but some were also historical in nature.

Auditor General Deodat Sharma spoke of the organisations’ structures and the attendant duties of officers. He explained that there were “appropriation lapses” at the end of the year. This was reflected in the move in some regions to have funds rolled over, but the necessary measures as stipulated in law, were not being followed. These roll -over of funds must be approved by the Ministry of Finance, he reminded.

Sharma also urged that payments only be made for “complete works.” Some regions, Sharma said are paying more to mobilise  for contractual works. The issue of contracts not being given to the lowest evaluated bidders was also noted by the Auditor General. If this is not done, then the relevant officials must be notified why this is so, he added.

Permanent Secretary of the Ministry of Communities, Emile Mc Garrell admitted that the aforementioned problems were recognised, and noted that the Regional Consultative Committee meeting was convened to address these challenges. He added, for example, that the Regional Accounting Unit stands at 14% of its needed staffing strength and many other vacancies, he added exist at critical levels.

PAC Member Charandass Persaud observed that the issues being raised continuously were like a “recurring decimal” noting, “If for example we allow time to elapse then we would have a problem recovering overpayments for example from contractors. Persaud added, “We need to go after them because money was already paid and they are laughing at us!” he added.

Another PAC member, Audwyn Rutherford said that measures needed to be taken to recover any outstanding funds.

PAC Member Pauline Sukhai also added her concerns, noting that many of the issues raised previously, are not being addressed by the accounting officers when they appear before the Committee.

PAC Chairman Ali then urged the Permanent Secretaries not to get involved in politics, but to stick to the technical work that they were

mandated to undertake.

Region Nine Chairman, Brian Allicock then raised some issues. He recalled that with regards payments for Sand Creek Nursery School’s batteries, the contractor had already received 50% of the payment though no work had started.

Allicock lauded the appointment of a new PAC chairman whom he noted had started off on the right foot. He added that the previous chairman  hardly listened to him.

Region Six Chairman, David Armogan noted that he faced similar problem as others . He stated that he too had difficulty in getting to peruse minutes of meetings and seeing bills of quantities. He questioned why he was being told that some programme heads could not be released to attend meetings to ascertain the status of various contracts. He pointed out that expenditures were not being monitored incrementally, hence there was a rush to spend money before they could be returned to the Consolidated Fund, “Cheques are cut in the hope that the items will be supplied in the first quarter of the next financial year. This results in fraud,” he explained.

Region Three Chairman, Julius Faerber raised several complaints. He accused the REO of refusing to attend statutory meetings. He noted that duringsaid. meetings, requests would be made for financial information on various projects. These, he stated, are often not forthcoming. The works committee no longer signs off on works’ payments, he said.

The Bills of Quantities are also not given to him, Faerber added but the PAC Chairman urged that he and other Chairmen read the Auditor General’s Annual Reports.

Similar statements were expressed by the other Regional Chairmen, and deputies in attendance. The failure to receive financial reports was repeatedly expressed by the officials.

In response, the PAC Chairman reminded that all correspondence should be copied to the relevant ministers and other officials.

The Region 7 Chairman, Gordon Bradford proposed that adequate staffers by provided in outlying regions. He suggested a stint of six months to get officials to understand the challenges faced. “We are looking at the AG Report, and have already started looking to correct some of the issues.”

Region One Chairman, Brentnol Ashley, raised an issue with the composition of the regional tender board and the sloth in dealing with errant contractors. Some contractors for 2016 projects are still mobilising,  he noted.

A lack of correct status reports, was also cited by the Region One Chairman. Many of the locally based contractors, he added, are unable to compete with those from the coastal regions. He queried how tender board members could be replaced since some were not attending statutory meetings regularly.

In closing, PAC Chairman Ali said that he hoped that there was a better understanding of the issues and the regulations that needed to be adhered to by all. One common objective that all of them have, he added was to improve the system.