Review of Audit Reports on the Public PPP/C Gov’t Accounts of Guyana (2019/20-2022/23): Marked Improvements in Financial Accountability and Governance Observed under the Incumbent, PPP/C Gov’t
Summary Points
- Financial accountability and governance deteriorated consistently under the APNU+AFC’s tenure in government.
- Notably however, marked improvements were observed since the PPP/C Government assumed office in 2020.
- Over $300 million in overpayments were made under the APNU+AFC in 2019/20, that were never recovered. This outturn changed for the first time in 2022/23 whereby all overpayments made were fully recovered and/or outstanding or unfinished works were completed.
- The average number of recommendations issued by the Audit Office under the APNU+AFC Government was 547 on an annual basis, with an average implementation rate of 32.2%.
- Conversely, the average number of recommendations issued annually under the PPP/C Government was 219; 2.5 times less than their predecessor, with an average rate of implementation of 85%.
- Multiple breaches of the FMA Act and Procurement Act were observed under the APNU+AFC, which was evidently minimized under the PPP/C Government, according to the Audit Reports.
“Each year, the Audit office issues recommendations to Ministries, Departments and Regions that are designed for improving systems and practices at these entities and improving the Government’s governance and accountability mechanisms” (Audit Report, 2023).
A review of the last two fiscal years under the APNU+AFC Government (2019-2020) and the PPP/C Government (2022-2023) was conducted; the purpose of which was to ascertain whether there has improvements in public financial accountability and governance over the years. Of note, for brevity, the findings highlighted herein are considered the main/substantive findings extracted from the Executive Summary of the various years audit report.
In so doing, it was found that financial accountability and governance deteriorated consistently under the APNU+AFC’s tenure in government, whereas marked improvements were observed since the PPP/C Government assumed office in 2020.
In the year 2019, there was nearly $300 million in overpayments on contracts where no significant works were completed, and no recoveries of the overpaid sum were made; a total of five instances were reported where Supervising Consultants failed to administer contracts in the best interest of the Government. Further, a total of four (4) special investigations were conducted by the Auditor General in respect of questionable contracts that were awarded in breach of the Procurement Act, as well as financial mismanagement; multiple breaches of the Procurement Act were established across four regions and several ministries and departments; high maintenance costs for vehicles were flagged, totaling $252 million; 887,800 litres of fuel valued at $182 million were unaccounted for, uplifted by an unauthorized vehicle; and non-delivery of several items valued at $202.4 million.
In 2020, contracts totaling $1.58 billion were terminated; overpayments on contracts amounted to $11.375 million were made in respect of five contracts. There was no recovery of these overpayments up to the time of reporting in the ensuing fiscal year; and
$1.658 billion in items were not delivered.
In 2022, overpayments totaling $52.8 million were made, but at the time of reporting, 66% of the overpaid sums was recovered―for the first time. In addition, three contracts were terminated valuing a combined $176.548 million. The Leguan Stelling works was flagged in this report, noting that almost five years later, work remained incomplete. The contract sum was valued at $413.259 million and was awarded in 2018.
In 2023, recovery of overpayments improved considerably, wherein overpayments totaled
$199.1 million for 74 contracts―were fully recovered―including by contractors completing unfinished or outstanding works for which payments had already been received. Contracts totaling $1.857 billion were terminated for poor/substandard work by contractors; and breaches of the Procurement Act were noted for the Guyana Defense Force (GDF) and the National Drainage and Irrigation Authority (NDIA).
State of Implementation of Audit Recommendations Under APNU+AFC Government Versus the PPP/C Government:
- In the 2016 Audit Report, it was reported that 442 recommendations were made in the 2015 report, of which 60% have not been implemented.
- In the 2017 Audit Report, it was reported that 602 recommendations were made in the 2016 report, of which 58% have not been fully implemented.
- In the 2018 Audit Report, it was reported that 454 recommendations were made in the 2017 report, of which 76% have not been fully implemented.
- In the 2019 Audit Report, it was reported that 593 recommendations were made in the 2018 report, of which 83% have not been fully implemented.
- In the 2020 Audit Report, it was reported that 645 recommendations were made in the 2019 report, of which 62% have not been fully implemented.
- In the 2021 Audit Report, it was reported that 548 recommendations were made in the 2020 report, of which 11% were not implemented.
- In the 2022 Audit Report, it was reported that 220 recommendations were made in the 2021 report, of which 22% were not implemented.
- In the 2023 Audit Report, it was reported that 218 recommendations were made in the 2022 report, of which 12% were not implemented.
Altogether, the average number of recommendations made under APNU+AFC Government was 547 annually with an average implementation rate of 32.2%. Conversely, the average number of recommendations made annually under the PPP/C Government was 219; 2.5 times less than their predecessor, with an average rate of implementation of 85%.
In conclusion, this review of the Audit Reports for the period 2019/20 and 2022/23 illustrates that financial accountability and governance significantly deteriorated under the APNU+AFC Government. In contrast, marked improvements were observed under the PPP/C Government, with 2.5 times lesser recommendations for improvement made by the Audit Office. In the 2019/20 period, multiple breaches of the Fiscal Management and Accountability Act and the Procurement Act were observed. However, these breaches were evidently minimized in the 2022/23 period by the incumbent.
