May 21, 2016 News
…APNU/AFC administration repeated act in 2015 budget
By: Kiana A. Wilburg
A forensic audit into the National Frequency Management Unit (NFMU) has exposed just how “cunningly” officials there were able to hide the fact that they were secretly funding two Jagdeo-inspired projects.
The forensic auditors from Ram and McRae, Chartered Accountants, made this eye-opening discovery as they scrutinized the budget of the NFMU. The NFMU appears in Guyana’s National Budget as a statutory body under the formerly named Office of the President.
The expenditure that NFMU would need to carry out its operations for the year is also listed in the National Budget. The Forensic auditors however found it strange that the single largest line item in the NFMU’s budget is Rates and Taxes and Subvention to Local Authorities.
In fact, the auditors observed, too, that NFMU is the only statutory body whose budget is included in the National Budget that has such an item.
Upon analysis, the forensic auditors were able to discover that this item, “Rates and Taxes and Subvention to Local Authorities” is nothing but a disguise to make payments from public funds to the E-Governance initiative and the One Laptop Per Family project. They stressed that there is no way that a project can by any definition be classified as a Local Authority.
The auditors said that this represents a violation of Article 217 of the Constitution of Guyana. The Ram and McRae team also found it interesting that this violation does not appear to have engaged the attention of the country’s Auditor General, Deodat Sharma who is expected to be a diligent observer of how funds are used by state agencies.
What was also surprising to the auditors was that a review of the 2015 National Budget exposed that the
APNU/AFC administration continued the common practice of including the expenditure of other entities under Rates and Taxes and Subventions to other entities within the budget of the NFMU.
In fact, the auditors discovered that a total of $538 million was included in the 2015 Budget for the NFMU under the category in discussion, as compared to $443 million that was included in the 2014 Budget which was presented under the PPP administration.
The forensic auditors recommended that no additional funds be budgeted under the above stated category.
Junior Finance Minister, Jaipaul Sharma, had told Kaieteur News that he was appalled when he discovered during the initial stages of the forensic audit that “almost 90 percent of the funds of the Frequency Management Unit dating back to 2012, 2013 and 2014 were spent on two projects that had absolutely nothing to do with the agency.”
Sharma said that he found NFMU’s investment into PPP’s E-Governance Project which involved the failed Fibre Optic Cable from Brazil and the One Laptop project to be “very strange and downright deceitful.”
The fibre optic cable which was started in 2011 under former President Bharrat Jagdeo was intended to bring another source of internet connectivity to Guyana. It should have been completed by 2013, but turned out to be a major embarrassment for the previous administration, after it faced delays due to damage and other technical issues.
It was part of a bigger initiative to advance Guyana’s e-governance drive and equip 90,000 poor families with laptops and link state agencies into an efficient internet site.
The One Laptop Per Family and the E-Governance projects along with the Brazilian fibre optic cable initiative, reportedly cost taxpayers in excess of US$70M.
“It is unbelievable that (the NFMU) were hiding expenditure on these projects. It goes to show the kind of financial lawlessness that was allowed to take place at these agencies. I just don’t understand how monies could be spent on these two programmes which had nothing to do with the Frequency Management Unit from the beginning.
“The auditor has already made it clear that about $100M has to be recovered in this regard for it goes against the financial regulations of the company,” said the Junior Finance Minister.
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