“As a Guyanese accountant and auditor for more than forty years, it is painful to witness the mediocrity of the advertisement which excludes some of the most fundamental issues that an audit of this nature should address.” This is what Chartered Accountant and Attorney at Law; Christopher Ram had to say after viewing government’s advertisement for firms to audit the pre-contact cost that ExxonMobil is claiming.
Ram noted that the advertisement sets out a scope that is obviously deficient to him.
Ram said, “It is elementary that if the Terms of Reference or the scope of the Engagement is deficient, then the work will be deficient and the objectives not met. With these Terms of Reference as poor as they are, Guyanese must sadly and inevitably brace themselves for the oversight and regulation of the sector to be as bad, if not worse, than Trotman’s negotiation of the Petroleum Agreement.”
The Attorney said that the “most polite words to describe this advertisement and proposed engagement are uninformed, amateurish and short of knowledge and understanding of what an audit of a contractual arrangement is and how it is carried out.”
Ram noted that there is a requirement for the successful person or firm to provide on-the-job training to the staff of the Guyana Revenue Authority (GRA) and the Office of the Auditor General (OAG) on cost recovery auditing, “with a particular focus on value for money.”
The advertisement sets out the scope of the consultancy to include: Determining: If the Contract Costs have been properly assigned to the correct cost category, in the correct amount and with adequate transparency level; If Contract costs are eligible for cost recovery (including determining the fiscal year of incurred expenses and consequences for potential future uplift); and If, in the opinion of the Consultant, costs submitted by the Contractor have been incorrectly categorised and/or should be disqualified from Cost Recovery.
The ad states that the firm or person will have to assist the relevant authorities in communicating the findings of the audit to the Contractor and, if requested, represent or accompany the relevant authorities in meetings with the Contractor.
According to Ram, the writer of the advertisement does not appear to have any familiarity with the constitutional nature of the Office of the Auditor General; the statutory powers, functions and duties of the Revenue Authority; and the relevant provisions of the Petroleum Agreements issued under the Petroleum Exploration and Production Act, and in particular Article 9 – Records, Reports and Information, Article 11 – Cost Recovery, Article 13 – Valuation of Crude Oil or Natural Gas, Article 14 – Disposal of Production, Article 15 Taxation and Royalty and Annex C – Accounting Procedure.
Further, the Ad stated that particular focus will be placed on getting value for money.
Ram said, “Of course, there is now an unhealthy silence from the policy makers and officials in the petroleum sector but would someone please direct the poor Guyanese citizen where value-for-money has any focus, let alone a “particular focus” in the Petroleum Agreement. It just does not exist.
Ram noted too that that the use of a few smart-sounding terms like “fiscal year of incurred expenditure” and “potential future uplifts” may impress the novice but does little to prise out the overcharges and the financial shenanigans of which many international oil companies have been found guilty. Yet, the most serious penalty which these companies face is a fine, never a suspension of their licences and the termination of their Agreements.
Even further, Ram noted that the advertisement assumes that there is no difference between pre-contract costs or how these are to be dealt with, pre-production costs, and post-production costs. Nor does it give any hint of the audit which the GRA has announced it is carrying out, apparently as a result of delegation by the Minister under paragraph 1 of Article 6. Maybe the writer himself does not know.
The attorney also pointed out that funding for the consultancy will come out of financing received by the Government from the World Bank towards the cost of the Guyana Oil and Gas Capacity Building Project. The procurement of the services is being done in accordance with the Bank’s “Procurement Regulations for IPF Borrowers” and is open to Consultants who provide information demonstrating that they have the required qualifications and relevant experience to perform the Services.
Apr 09, 2020Army reserve Colonel (Ret’d) John Percy Lewis MSM (Military Service Medal) passed away Tuesday evening to plunge the local sports fraternity into deeper sorrow after losing the battle to a...
Apr 09, 2020
Apr 09, 2020
Apr 08, 2020
Apr 08, 2020
Apr 07, 2020
Editor’s Note, If your sent letter was not published and you felt its contents were valid and devoid of libel or personal attacks, please contact us by phone or email.
Feel free to send us your comments and/or criticisms.
Contact: 624-6456; 225-8452; 225-8458; 225-8463; 225-8465; 225-8473 or 225-8491.
Or by Email: [email protected] / [email protected]