Jul 21, 2018 News
Cabinet has reappointed businessman Lance Hinds as Chairman of Guyana Energy Agency (GEA)’s Board of Directors. This was revealed yesterday by Minister of State Joseph Harmon, during the post-Cabinet press briefing held at the Ministry of the Presidency.
Others listed as board members are: Nadia Sagar; Mark Bender; GEA’s CEO, Dr. Mahender Sharma; and the Deputy CEO of the GEA, Dr. Vincent Adams.
Hinds is a former Georgetown Chamber of Commerce and Industry (GCCI) President. According to his Linkedin profile, Hinds is also the Chief Executive of the BrainStreet Group, a business information technology solutions company that offers management information and business system consulting services for government and private sector agencies.
The businessman’s work is cut out for him as there are complaints that GEA is still not operating optimally.
When the APNU+AFC Government took office, GEA was deemed one of the more corrupt agencies that operated under the PPP/C regime. GEA was one of the agencies that government mandated undergo a forensic audit. That audit was done by Nigel Hinds Financial Services.
Reports are that many of the recommendations of that report are still to be implemented.
Yesterday, this newspaper spoke to Lance Hinds. He was reminded that auditors found that GEA was using an accounting software called “Peachtree” to automate and manage its accounting functions. However, the agency does not have a licence to use Peachtree Accounting Software. The auditors found the use of the software in this manner to be illegal.
Hinds said that the GEA is still in the process of addressing that. He said, “One of the things coming out of that was an overhauling of the applications. However, I will have to check and see what is happening on that front. It is not something being dealt with directly at a board level, but what we did in the last session was begin modernizing the financial system. I will need to check on that”.
The audit had also found the Fuel Marking Division of GEA to be a haven for corruption of all sorts due to frail internal control systems. In fact, auditors stressed that the abuse of and non compliance with the rules and regulations of the programme was closely linked to high levels of fuel smuggling.
Forensic auditors also found that GEA was using a highly compromised manual system to prepare and issue invoices for licences. These include wholesale, retail, import, export, bulk transportation carriers, and storage licences.
The auditors noted that the annual revenues generated from licensing fees averaged $25 Million for the years 2011 to 2014 – amounting to over half of GEA income, when fuel marking fees are not considered. They asserted that the generating and issuing of invoices for licensing fees are not governed by a standardized system and are not integrated in the agency’s accounting system. “For example, an invoice is only issued when requested by customers or when management elects to issue.”
Hinds said that addressing the loopholes that facilitate corruption continues to be a work in progress.
“We have improved our monitoring processing to reduce corruption. Whenever it happens, it is addressed and dealt with condignly.”
Also, Hinds said that the GEA is working on putting in an automated licensing system. This will replace the manual operation that now prevails which leaves much room for altering of records.
Hinds said that he and other GEA officials are working to ensure that GEA is strengthened to better serve Guyana.
Forensic auditors have recommended “strong disciplinary action” for lax oversight of the Fuel Marking System which led to the loss of millions of dollars.
The auditing team noted for example that GEA has been incorrectly recording funds that it collects from oil companies on behalf of the Government of Guyana as revenue on its financial statements. The auditors noted that the International Accounting Standard #18, Paragraph eight states that, “In an agency relationship, the gross inflows of economic benefits include amounts collected on behalf of the principal and which do not result in increases in equity for the entity. The amounts collected on behalf of the principal are not revenue. Instead, revenue is the amount of commission.”
The report of the forensic auditors said that the monies paid to GEA for fuel imported by GEA on behalf of the Government of Guyana should be treated as Accounts Payable instead of Revenue.
The audits also found that GEA accepts payments for fuel from Rubis Guyana Inc., Sol Guyana Inc., and Guyana Oil Company Limited. It noted, however, that premium charges were granted to the Guyana Oil Company Limited. The team of highly qualified forensic auditors emphasized that there was no basis for this premium financial package.
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