During the reign of the People’s Progressive Party/Civic (PPP/C), the Guyana Forestry Commission (GFC)
transferred millions of dollars to various state agencies just because it was instructed to do so.
Among these transfers was one to the National Industrial and Commercial Investment Limited (NICIL) to the tune of $300M.
Former Auditor General, Anand Goolsarran, conducted a forensic audit into the operations of GFC.
He pointed out numerous issues including the fact that the Commission has been making transfers and payments from its retained earnings to other State agencies.
Goolsarran said that in accordance with Article 217(3) of the Constitution, “No moneys shall be withdrawn from any public fund other than the Consolidated Fund unless the issue of those moneys has been authorized by or under an Act of Parliament”.
Goolsarran said that with such a Constitutional provision it follows that funds cannot be transferred to other State agencies to meet public expenditure. The auditor added that such a practice, apart from being a violation of the law, undermines authority of Parliament to approve such expenditure. In addition, since the expenditure was not included in the National Estimates, it was not reflected in the Public Accounts of Guyana, thereby resulting in a significant under-reporting of expenditure.
In GFC’s response, the agency said that it was told to make the transfers and do so on that basis.
“Transfers were done to the Consolidated Fund and other State Agencies based on Ministry of Finance instructions or Cabinet directives to the GFC.
“In the circumstance, GFC complied with the directive provided through the Ministry of Finance and Cabinet instructions.”
Apart from the transfers, Goolsarran pointed out that Section 22 (1) (a) of the Act prohibits the Commission from making any loan or grant except for the purpose of carrying on the functions of the Commission.
Nevertheless, on September 10, 2014, Cabinet approved of the Commission granting a loan of US$600,000 in six monthly installments of U$100,000 to the Iwokrama International Centre, commencing May 2014.
Goolsarran said that “Repayment was to commence on 31 January 2016 at a rate of US$50,000 per month for the period January to December 2016, plus interest at 5%, with an additional 2% in event of default.
“However, the loan is not in conformity with the Act since the operations of Iwokrama do not relate to the functions of the Commission.”
GFC’s response was that it can grant loans once it sees the loans appropriate.
GFC stated that Goolsarran did not take account of Section 22 (1) (c) of the Act which states that the Commission shall not make any grant or loan except on terms and conditions that it considers appropriate.
GFC said, “Although Section 22 (1) (a) prohibits the making of loans and grants by the GFC for such purposes as in the case of Iwokrama, Section 22 (1) (c) provides for the Commission to make
loans and grants available on terms and conditions deemed appropriate by the Commission.
The GFC granted a loan to Iwokrama of US$600,000 on the basis of a Cabinet directive to the GFC. The GFC Act makes provision for granting of such loans under Section 22 (1) (c). A loan agreement is in place that stipulates the terms and conditions of the loan to Iwokrama.”
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