GEA forensic audit report
More stringent fuel marking and monitoring systems have been recommended for the Guyana Energy Agency (GEA) in its Forensic Audit Report, which was compiled by Nigel Hinds Financial Services for the period November 1, 2011 to May 31, 2015.
The document, which is posted on the Finance Ministry’s website, detailed that GEA’s Chief Executive Officer (CEO) Mahendra Sharma had “lax” oversight for the fuel marking system which resulted in rampant fuel smuggling.
Consequently, it recommended more rigid measures in order to clamp down on the illegal practice.
The document noted that the invoicing process of the Licensing Division needs to be computerised in such a way that it is integrated with the accounting system of GEA.
“The integration will allow for improved recognition of revenue, accounting of receivables and the monitoring of licence holders,” it suggested.
The report also stated that all GEA invoicing should be a component of the financial accounting system and that customers should not have the option of determining whether they want an invoice or otherwise; instead invoices should be issued to all customers as a standard policy.
A recommendation was also made for an aging report for accounts receivable should be integrated within the accounting system of the agency for better management of revenue, budgeting and enforcement.
Some other recommendations include: for an internal audit charter to be aligned with the strategic objectives of the GEA; monthly, bi-annually and yearly audit summary reports should be prepared by the Internal Auditor for presentation to the Board or the appropriate Sub-Committee; all components of GEA risk management practices should be incorporated into a documented Enterprise Risk Management Policy and be reviewed on an annual basis by the Board of Directors.
Moreover, it also noted that risk assessments should be performed on areas prone to error and fraud, with a focus on segregation of duties to prevent and detect errors and fraud.
“This is clearly needed in the receipt, storage, distribution and reconciliation of fuel marking concentrates,” the report highlighted.
It also proposed that checks and balances for documents reporting on fuel received at the terminal should be signed by representatives from GEA, the shipper and the terminal manager and that the documents should be accompanied by the approved GRA form.
Moreover, the report also disclosed that Sharma had an integral role in unlegislated and unauthorised polygraph testing of GEA employees from the Fuel Marking Services Division that resulted in the services of over 30 employees being terminated.
As such, the report recommended that strong disciplinary action should be taken against Sharma.
In this regard, the report said the use of the polygraph testing on employees should be discontinued until Guyana has the applicable laws to govern polygraph testing and that immediate action be taken to compensate employees who were terminated as a result of the Polygraph Testing Programme conducted by the GEA over the period 2009 to 2014.