Finance Ministry owes NIS millions – Audit

May 23, 2016 News

The recent release of the National Insurance Scheme (NIS) forensic audit report has revealed that the Ministry of Finance has millions outstanding for the scheme.
The debt was incurred during the reign of the People’s Progressive Party/Civic (PPP/C).
Ramesh Seebaran in his report revealed that a debt of $168M was recorded in NIS’ audited financial statements for 2013. Part of that figure represents debts dating back in 2001. The sum owed by the Finance Ministry represents the chunk of the debt recorded in that year.
Seebaran reported, “Included in this amount, is a balance of $116M owed by the Ministry of Finance and an amount of $38M which represents dishonoured cheques from contributors. Further, over $20M of the $38M is owed in excess of five years.
Management has advised that these balances were referred to the Guyana Police Force but were sent back to the Scheme to be dealt with under their debt recovery policy.”
The auditor advised that the Board of Directors has to determine whether the various receivable balances should not be impaired.
Further, it was found that the Guyana Sugar Corporation (GuySuCo) is the largest defaulter with an indebtedness of over $1.5B. According to Seebaran, the Operations Manager presented a list of receivables totaling $1,091,172,705 at August 2015 which does not include GuySuCo whose indebtedness is $1,574,283,889 for the period September 2014 to April 2015.
The audited report outlined that although a 2011 actuarial review reported that 40 per cent of the informal sector workforce is not contributing to the Scheme, the current system is not designed to determine the actual or near actual contributions from employers/self-employed/employees that are not registered.
Back in 2014, there were discussions on a draft Debt Management Policy which resulted in the formation of a document titled ‘Procedure for Debt Management Unit’ prepared in August 2014 but has not been approved for implementation to date.
On this note, the auditor recommends the establishment of both a proper Debt Management Unit with adequate staff and resources to effectively pursue defaulters and a legal department since at the moment, management only engages lawyers for significant cases. This practice severely hampers its debt collection abilities.