State auditors called to probe Region Five irregularities
Unreconciled accounts posing problems
By Daniel Da Costa
Stabroek News
December 17, 2002

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State Auditors have launched an investigation into alleged financial irregularities within the Regional Administration of Region Five (West Berbice/Mahaica) with its headquarters at Fort Wellington, West Coast Berbice.

Regional Executive Officer, Gerard Rutherford last Friday confirmed that he had "identified a problem and had called in the State Auditors who are conducting an investigation."

He however declined to provide details on the nature of the investigations, saying only "they were ongoing."

Rutherford was asked to respond to reports reaching this newspaper that large sums of monies, including rates and taxes, handed over to the administration by some Neighbourhood Democratic Councils (NDCs) over the past year could not be accessed.

Stabroek News has been informed that in the case of the Naarstigheid/Union NDC, one of the largest in the region encompassing some 16 villages, the sum involved is close to $1M. In June this year, Rutherford had written the permanent secretary, Ministry of Local Government informing him of the unreconciled Bank Account No. 3098, District Commissioner, West Berbice.

It was brought to the permanent secretary's attention that the account had not been properly reconciled from its inception in 1997 because an unreconciled balance was transferred from a closed account No. 304. This account was reportedly in use for over 15 years and was also never reconciled.

According to one NDC chairman, he was told by the regional executive officer that there was a discrepancy between the Bank of Guyana's recorded balance and the administration's cash book balance. "We were told that it is not possible to effect payments to NDCs which had balances in their cash books." Another NDC chairman told this newspaper that his council was unable to pay salaries to its employees and meet their financial obligations to contractors since their funds "were tied up at the RDC".

One NDC chairman said all he was told was that efforts were being made to correct the situation. The problem, he recalled, surfaced in January after the NDC had ordered some materials to execute a project. "We went back to the RDC requesting funds to pay for the materials, salaries and other expenses and were told that we could not uplift any money from our account at the office." This situation, he said, continued until August when monies collected were still given to the RDC but were not placed in a bank account. "We were told that the money cannot be touched since the investigations were still continuing. We were also told that the money which the administration has for us will be going back to the Treasury."

The inability of the NDCs to access these funds has severely affected their work programmes and the capacity to provide services to the communities they serve. The District Commissioner's Account is used for the remittance and disbursement of revenue for NDCs. Stabroek News understands that the account was not being reconciled in the appropriate manner, thus causing overdrafts.

Sometime after June this year, a Task Force headed by the deputy regional executive officer was appointed to reconcile the two Accounts, 304 and 3098. However the team could not determine the reason for the overdrafts.

Meanwhile, all the chairmen in the region were notified last month by the deputy regional executive officer via correspondence dated November 11 that "in keeping with a directive given by the minister of local government, you are hereby requested to proceed to open your bank accounts as early as possible." The move has been seen by the NDCs as an attempt to facilitate the execution of their mandate and to meet their obligations while the investigation proceeds.

And in a related development all Municipalities, NDCs and RDCs have been notified by a general circular that "Central Government has taken a decision to reactivate provisions in the existing laws which allow the properties of defaulting ratepayers to be sold at auction after due process has been observed." This newspaper has learnt that Cabinet has tasked the Ministry of Local Government and Regional Development with the reactivation and implementation of the laws. The laws are contained in the Municipal and District Councils Act, Chapter 28:01 and the Local Government Act, Chapter 28:02.

According to the circular "countrywide consultations into proposals for local government reform were undertaken by the Ministry of Local Government and Regional Development in 2001-2002." These consultations brought out information to the effect that the elected Local Government Organs require these laws to be reactivated without undue delay. Most NDCs and Municipalities have been complaining about the non-payment of arrears rates and taxes by property owners across the length and breadth of the country. This, they say, has been affecting their ability to deliver essential services, maintain infrastructure and to undertake development works in their various areas.

According to the circular, following the promulgation of the necessary Order "all Municipal Councils and NDCs would then be empowered to abandon whatever moratorium was existing and to enforce the process of parate Execution Sales of properties of defaulting ratepayers." The circular dated September 24, 2002 was signed by Minister in the Ministry of Local Government and Regional Development, Clinton Collymore.

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