The plight of the labour movement, through the prism of the teachers deal

Introduction
Even as mainly organized labour assemble at their various points today to march in silent resignation, listen to flat speeches from their leaders, numb their plight and pain with music, food and liquor produced by their colleagues for the profits of the investing class, the evidence so overwhelmingly confronting their membership on this Labour Day points to a movement that is in complete crisis, their numbers in decline, their leadership in disarray, their unity in tatters, and their very survival in question. Almost every issue that has faced workers recently, be it RUSAL’s attempt at union-busting; the teachers’ union imaginary giant leap; government’s withdrawal of Critchlow Labour College subvention; the de facto abolition of collective bargaining in the public sector; the CLICO-induced six billion dollar hole in the NIS financial statements, or politicking by some of the movement’s leaders, would make an excellent case study for any thesis on the Collapse of the Labour Movement in Guyana.

Yet, a country whose first two modern-day leaders came out of the bowels of the labour movement cannot find a single person with the interest and inclination to engage in such an exercise or produce a leader with the capacity to heal the rift, stem the tide, deliver hope or start the debate. Indeed even an intellectually curious economist, touting past working class credentials and harbouring future presidential ambitions confesses to an ignorance of the number of unemployed, while more truthfully demonstrating insensitivity to the plight of that class. The state of the workers is probably mirrored in the paucity of statistics compiled by the movement, academia, and the national institution with the duty to produce such data. We are after all in a market-based, low-wage economy in which the users of labour care only about the maximization of profit, whether at the expense of the state, the consumer or labour.

Physical and psychological blow
The Economic Recovery Programme introduced by Mr. Desmond Hoyte and his team dealt a physical blow to the public sector. The PPP/C has added the psychological coup de grace, crudely using the carrot and stick to compromise and destroy the leadership, not caring about putting even their own supporters on the breadline. In the not too distant past, the interest of the worker and the leader coincided to such an extent that leadership in the movement was merely a function, as they collectively and individually faced the same struggles and felt the same hardships. Now, the only thing they share is as occupants of George Orwell’s Animal Farm, the interests not only having diverged but sections of the leadership having become the instruments of the exploiters, sorry I meant employers. What hope is there for those destined to remain workers or to be part of that pool of the unemployed or near unemployed – the unwaged housewife and single mother, the Amerindian made to depend on handouts from the coast, the rural poor on the goodwill of the “plantation” owners, the petty trader from meagre sales, and even the employed on remittances from abroad.

With such challenges facing the country, what prospects are there for the transformation of the economy into one that is competitive by regional and international standards, where businesses benefit from an expansion in aggregate demand, the economy from new investments, workers from new opportunities and the state from additional taxes? How do we escape the trap of having proudly marketed ourselves as a low wage economy characterized by low demand and low investments into a new and dynamic one, capable of delivering the standard of living compatible with basic human needs? How do we re-invent our educational system to make it serve their own advancements and the needs of industry and commerce, and yes, where would the resources come from? And how do we stem the migration of our brightest and even those not so bright?

Every issue or challenge that faces the worker or the member of the working class – whether employed, unemployed or under-employed – has direct and immediate implications for the employer, the economy and the country. A worker who is underpaid or undernourished is hardly likely to be a productive worker; the single parent earning no or low pay cannot provide for a learning child; the unemployed cannot contribute to enhancing aggregate demand. It is such a huge challenge that no one seems willing to admit, let alone confront it. Failure to recognise or confront it is more likely to lead to migration than solution and while with each person migrating the number of unemployed will fall by at least one unit, so too will demand for goods and services. It is the classic case of Catch 22.

The effects of the ERP, the money-driven privatization process that threw workers to the wolves, the introduction of a market-based economy in which social benefits are assigned no value, where the private sector is permitted not only to exploit labour but to corrupt and bribe public officials and the state, to evade taxes with impunity and to ignore laws and rules at their leisure, have combined to inflict a stifling effect on the economy.

The teachers union did not learn
As we approach elections 2011, the evidence is that the votes of the working class can either be bought or taken for granted. Economics or workers’ own personal circumstances it seems do not alter the voting dynamics, perhaps the only thing about labour that the political leaders seem to understand and then exploit. The teachers “settlement” is a classic case on this Labour Day. Let us look at it. In 2006, the government and the teachers union signed their first five-year pact (2006-2010) that included an annual 5% plus a one percent performance-based incentive, some non-cash benefits such as scholarships to 100 teachers each year, clothing allowance and duty-free allowance for one-off duty-free concessions for vehicles for 100 head teachers per year. It also included a housing revolving fund of $40M.

What was not given any prominence was that the Union was paid some money, the sort of sum given to GAWU last year as part of a “dispute settlement” resolution. President Jagdeo, who had been driving the negotiations for the government, found this was a small price for the government to pay for the union’s weakness and capitulation. It is not known how many head teachers benefitted from the duty-free concessions or teachers from the scholarships but what is certain is that the revolving fund was never set up.

For those teachers who were below the threshold for the payment of income tax at thirty-three and one third percent, the settlement will keep them in poverty. For those above, the net increase – assuming they all received the 1% incentive – was 4%, i.e. two-thirds of six percent. Over the five years, inflation averaged 6.5 %. In other words, the teachers at the end of the 2006-2010 deal were worse off than they were before, notwithstanding a gift made to them by Jagdeo in 2007. You would think that teachers would learn but clearly not their leaders.

Giant step – backward
Having been taken along in a game described by the union’s leadership as “tough negotiations” in which Jagdeo again played the leading role for the employers, the union which had sought a 15% increase, accepted a new five-year agreement providing for an annual five percent pay hike. On this occasion the goodies were a renewed agreement for the non-cash benefits that the government had failed to pay under the previous five year deal. Mr. Colin Bynoe, the union’s president in a clear slip of the tongue described the deal as a “giant step”. He left out the word “backwards”.

As Mr. Earl John, a human resources specialist pointed out in a letter in Friday’s Stabroek News, no negotiations were needed to get five per cent. That has become the standard gift from Jagdeo, confirmed by him at a press conference in October 2007 when he said of negotiations then taking place with the public servants: “If they are not concluded [soon] we are going to have to do like what we did in other years and make a payout to the public servants.”

With Mr. Bynoe’s giant step, 100 teachers will get house lots each year so that in one hundred and thirty years all teachers will have earned a house lot. And with the $40 million housing revolving fund, at even an average loan of $2 million per house, twenty of those teachers will be able to access the fund. Every other Guyanese it seems, their brother and their friend, is entitled to a house lot. For the teachers they have to agree to what in real terms is a five year wage freeze.

The result is that for the next five years, Guyana will continue to have the lowest paid teachers in the region; will invest hundreds of millions each year preparing Guyanese teachers for migration; both teachers and students will continue their high rates of absenteeism from the classroom; students will pass through the classroom rather than pass their examination; and the leadership of the teachers union can take a five-year sabbatical until just before the current agreement runs out.

Better leadership
Our teachers deserve better leadership and a more enlightened attitude from their employers than the kind of success Minister of Education Shaik Baksh could crow about. But the same can be said of many other unions, in the public as well as private sector. Ask any public servant of any achievement of their union in the past five years and they would be at a loss for a charitable answer. Ask the workers in the low paying shops, factories and farms what the labour movement has done for them and the instinctive answer will be nothing.

Ask the bauxite workers and you will be told that the government and the Minister of Labour Manzoor Nadir have colluded with RUSAL in union-busting. Ask other workers seeking union representation and they will tell you of impediments rather than empathy from the Trade Union Recognition Board. Ask the United Minibus Owners and they will tell you how the government brazenly engages in blacklegging operations. Ask the lecturers at the University of Guyana and they will tell you that like the rest of the public service, they too accept imposed salaries and conditions rather than defend their rights to bargain for adequate compensation for their services. For the workers, there are only questions and hardships. It is a short-term gain from an unfortunately near-sighted strategy by the government. In the end, the whole country loses, excepting the ruling class and the exploiters for whom the strategy seems designed.

The past decade has not been a good one for the workers. Today’s Labour Day will not change anything.

In discussing Vaitarna, Messrs Persaud and Singh failed to distinguish the State Forest Exploratory Permit from the TSA

When Agriculture Minister Mr. Robert Persaud held his press conference on April 12, 2011 to defend the permit/agreement over 1.82 million acres granted to the Indian company Vaitarna Holdings Private Inc., there had been very few letters and questions about the manner in which the two parcels of the land had been allocated to the company owned by Mr. Siddhartha, the coffee magnate of India. Mr. Persaud’s accusation of a “misinformation” and “sleazeball” campaign seemed therefore both inappropriate and disproportionate particularly since Mr. James Singh, Commissioner of Forests had spoken two days earlier on the matter.

In seeking to dispel concerns about Vaitarna, Mr. Singh had raised in my mind some interesting questions which I had hoped to put to him in some form. I withheld those after the Minister had said that he was “ready to debate and discuss the sector’s management stewardship, the policies and whatever is being done within the GFC, at anytime, at any place and with anyone.” It is now close to two weeks since I invited Mr. Persaud to do exactly that on Plain Talk but he has not responded to my written invitation or taken my follow-up telephone calls.

In my view, both Mr. Singh and Mr. Persaud failed to distinguish between the State Forest Exploratory Permit (SFEP), like the one previously granted to Simon and Shock International Logging Inc. (SSI) and the Timber Sales Agreement (TSA) previously granted to Caribbean Resources Limited (CRL). SFEPs and TSAs are issued and revoked under different sections and authority under the 1953 Forest Act.

SFEPs do not confer exclusive rights while TSAs do. SFEP’s are issued by the GFC under the authorisation of the Minister but only if the GFC is satisfied that the applicant, which must be a Guyana incorporated company, has adequate experience to carry on effective exploratory operations. Where there is a breach, the GFC can suspend the permit, subject to review by the President. A TSA on the other hand, permits the sale of produce and is issued by or under the authority of the President. In the case of a non-fulfilment of any of its terms, the TSA may be suspended by the Minister, also subject to review by the President.

It would be interesting to learn of any precedent of a new entrant in the sector being granted almost simultaneously an SFEP and a TSA. The intent of the Forest Act seems clear – an entity must demonstrate its capacity to deliver under an SFEP before being entitled to a TSA. Neither the Minister nor the Commissioner offered any indication that would remotely suggest that Vaitarna has demonstrated any capacity other than a keenness to get control of pristine forests covering 5% of Guyana’s forests. Instead, there is a lot to suggest that the decision was based not on any objective technical criteria but on Vaitarna’s willingness to pay $600 million, an indeterminate portion of which was for debts of CRL, a CLICO subsidiary. With such an outlay, Mr. Siddhartha, a shrewd businessman in India’s competitive and notoriously corrupt business environment will expect to recover his investment at or above his company’s cut-off rate of return, which will only come from fairly intensive operations.

With regard to the actual sums collected, both the US$254,000 and the $600 million should have been paid into the GFC from which, subject to the Act, surpluses could be paid into the Consolidated Fund. Both Mr. Singh and the Minister confirmed that the lesser amount was paid to the GFC but were ambivalent with respect to the $600 million. From a review of the Commission’s records it appears that the $600 million was paid straight into the CLICO fund, in a liquidation process that defies many laws but which the public is silent about for reasons of convenience.

It is interesting to note that the President has not assented to the new Forests Act passed in the National Assembly in February 2009, as a consequence of which it is impossible for the new Guyana Forestry Commission Act 2007 to come into operation, making the Commission more independent and autonomous. It is regrettable that even as we enter into international agreements for the conservation of our forests, we seem determined to retain legislation that is sixty years old rather than operationalise modern legislation that eliminates policy confusion, emphasises sustainable management of the forests, grants the regulator more autonomy and gives the public access to information.

If these recent Acts had been in place, it would have been harder for the Government to enter into the kind of transactions it has with Vaitarna and easier for the public to access information. This failure may have nothing to do with Vaitarna. But it may be hard to convince any informed person otherwise.

The GLTA never demanded a percentage of the Sport Ministry’s budget

I confess to an inability to discern whether Mr. Neil Kumar’s response (S/N April 21, All expenditure under the Sports and Art Development Fund can be accounted for) to Business Page (BP) of April 17 is a measure of an innate tendency to mislead and obfuscate, a misunderstanding or misrepresentation of what was written coupled with a failure to distinguish between the President of the Guyana (Lawn) Tennis Association and Christopher Ram the incumbent. Even as he confesses – in relation to Business Page – to an appreciation of writing that impresses and persuades, he misinterprets my disclosure of interest as one of bias.

I therefore ask Mr. Kumar to read the column again and provide the taxpaying public with a more informed response to the specific issues raised therein. Until then, there are certain issues in his response that warrant some comment.

1. That the Director of Sports – an office created under the National Sports Commission Act, 1993 – should sign a letter trying to defend the Ministry of Culture, Youth and Sport for its vindictiveness, discrimination among sporting bodies and lack of transparency and accountability, confirms the incestuous relationship between the Ministry and the Commission, an independent statutory body in receipt of a subvention.

2. Mr. Kumar says incorrectly that I demanded a percentage of the Ministry’s Sports Budget to be assigned to tennis. What the GLTA did was make a request for a contribution to help finance a national team of six under-14 tennis players to participate for the first time in a world lawn tennis event. It was in response to Dr. Anthony’s categorical refusal to our request that we pointed out to the Minister that what the GLTA was asking for was the equivalent to 0.2% of the 2010 sports budget, or 20 “cents” of every one hundred dollars. Since Mr. Kumar was not at the meeting I can excuse him if Dr. Anthony misrepresented our request, which leaves the minister in a rather invidious position. Determined not to go begging the Minister again this year we undertook some audacious fundraising efforts which made it possible for our juniors to participate once again in the WJT, showing considerable improvement.

3. Mr. Kumar suggested that I should have called the Ministry for clarification before writing BP. He may wish to ask his minister and the minister’s secretary of the number of unanswered written and oral communication not only from our Association but other sports bodies as well.

He may also wish to offer some explanation for a piece of advice given to me by an officer recently that I should have someone else sign letters from our Association!

4. Mr. Kumar carefully avoided the disclosure of the ballooning cost of the swimming pool and instead takes us around to the Non Pareil tennis courts which are as much a saga as the swimming pool, in terms of time, quality and increasing, undisclosed cost.

5. Now we are told that money from the Fund went to pay for the Guyana Classics, a project headed by Dr. David Dabydeen, recently appointed Ambassador to China. Carefully, Mr. Kumar did not specify how much of the five hundred million dollars allocated to the Fund so far was paid towards that project and who were the payees/beneficiaries.

6. Since Mr. Kumar accuses me of acting on dated information, can he tell us the last year for which Minister Frank Anthony tabled in the National Assembly, as required by the NSC Act, the annual report and audited financial statements of the NSC.

7. Finally, in connection with the status of the NSC, Mr. Kumar’s response is revealing indeed. He should ask its former Chairman Mr. Conrad Plummer why he has consistently disavowed association with the NSC and whether it was not because the NSC had been defunct and dead for several years. Overcome by the spirit of Easter, Cabinet we are now told has resurrected it!

To use a term in doubles tennis, the ball is now in Mr. Kumar’s and his Minister’s court.

Annual General Meetings generate interest

Introduction
As the season for general meetings moves into high gear, members, or as some companies call them shareholders, have been showing some interest in these meetings, although not always for what might be considered the right reasons. One complainant in a letter appearing in the press this week went so far as to make the charge of meanness against the directors and management of one of those companies. For good measure the writer reported that there was a “deep groundswell of resentment against the directors and management.” One individual who takes a healthy interest in such meetings and is one of the younger breed of investors wrote me on a number of issues all of which he suggested indicate that the directors and management are generally insensitive to the convenience of their members, including the calling of meetings when most persons would be at work, the meetings of more than one company being held on the same day, and no facilities for the aged and infirm. The shareholder was so incensed that he suggested that despite the expense of putting out glossy annual reports, company management really do not want shareholders to attend, speculating that there must be “something to hide”.

That speculation seems both harsh and unjustified. Experience suggests that our shareholding public is not sufficiently informed to detect any “hidden truths” and questions at an AGM almost without exception come from a handful of persons and are less than pointed. Some people it seems go to meetings as a social event, for many the only time they are invited to a hotel. Others go for that peculiarly Guyanese phenomenon at which gifts are distributed to those in attendance. While the motive for this may be good, this is an unfortunate practice to which members have become so accustomed that I do not think any company would wish to discontinue.

Serious business
A shareholders’ meeting is a serious event at which searching questions should be asked of the directors particularly given the weakness of our financial press and the fact that none of the companies meets the press and gives them the opportunity to ask questions. Such meetings are not really the forum for long-service awards but for directors to allow questions about their stewardship.

The practice of gifts apparently developed as a goodwill gesture and is now used to encourage attendance at meetings. It is important to note shareholders’ entitlement is to dividends – not gifts – and that all holders of the same class of shares are to be treated equally. In other words if one shareholder gets a gift or a dividend, then all shareholders of the same class are equally entitled. It would be interesting to see how any of the companies would respond to a challenge to a charge of discrimination against shareholders who do not attend and are therefore told that they are not entitled to a gift.

On this note it is useful to note that the Institute of Chartered Secretaries of India – a country that has lots of experience with improper influences – says categorically that “No gifts, gift coupons, or cash in lieu of gifts should be distributed to Members at or in connection with the Meeting”.

Clash of meetings
In terms of timing of meetings, part of the problem is that several of our public companies have a calendar year-end and have four months within which to hold their annual general meetings. But to do so they need to have the company’s financial statements finalised and audited for inclusion in their annual reports which must be circulated three weeks before the annual general meeting. It is hardly any surprise then that most meetings are held in the fourth month following the year end. While the Securities Council cannot dictate the date and time when companies which they regulate can hold their AGMs, it may wish to consider discussing with them a schedule so that there is no clash and persons who hold shares in more than one company are thereby free to attend each of these meetings.

This coming weekend there are three meetings of public entities – the Demerara Distillers Limited and Sterling Products Limited (April 29) and the New Building Society Limited (April 28). All the reports offer useful opportunities for serious questions on policies, performance, shareholder relations, etc. which could be raised by some shareholder group with collective knowledge and some institutional memory. Before making some specific points about the companies here are some general questions which shareholders can raise.

Board of Directors
With each of the three companies having only one woman director, the questions should be asked about the steps the company is taking to attract qualified women and minority shareholders for board membership. They may also wish to enquire about any mandatory retirement age for directors; whether there is an ethics committee; the perquisites paid to executives, the basis on which these are valued, whether executives reimburse the company for the fair value of personal benefits received and whether executive perquisites are checked by internal auditors and reported to the audit committee.

Audit and controls
The number of internal auditors the company has; whether they report to a sufficiently high level of management and have ready access to the audit committee; the regularity with which they visit each operating location, including foreign operations; the standards and performance of the internal audit department and whether these have been evaluated by an external review; whether internal auditors have full, unrestricted access to all company functions, records, property and personnel; and the actions taken on any material weakness in internal control reported by the independent accountants.

In the case of a company with several subsidiaries, if the annual report does not provide the information, shareholders should enquire whether all of the subsidiary companies are independently audited and the names of the audit firms. Too many auditors are not necessarily a good sign, while no auditor for any of the subsidiaries casts doubts on the financial integrity of their financial statements.

Political and Economic Environment and Taxes
Shareholders should be asking whether the company has maintained its competitiveness in terms of sales and earnings in the markets in which it operates; the cost to the company of compliance with governmental directives and regulations and the risks of operating in some markets and industries; the conditions for investment and expansion; taxation and efforts to lobby government on various issues.

In an election year, shareholders may wish to enquire whether the company plans to make any contributions, loans or other support to any political candidate or organisation including lobbies and if so to ask for details.

Financial and Liquidity and Capital resources
Against the background of their own personal liquidity and to formulate their savings and investments, shareholders would need to hear from their company of its plans to pay cash dividends and issue cash or bonus stock. With financial statements and annual reports growing in size and complexity, the shareholder should be enquiring why financial statements and footnotes in the annual reports are not more intelligibly written so that the average shareholder can understand them.

This list is by no means exhaustive and would have to be tailored to the specific circumstances of the particular company. Serious shareholders should keep a file containing past annual reports and the questions asked since even directors sometimes need to be reminded of earlier commitments.

Let us now turn to some specific issues which could be raised at this weekend’s AGMs.

DDL
This company operates in several countries, the economies of all of which did not perform as well as Guyana’s. Yet of the group companies, those in Guyana performed less well than those abroad. Indeed the parent company (DDL) reported a 12% decline in after tax profit, while the other local subsidiaries including its trading company Distribution Services Limited, TOPCO, Demerara Shipping and Demerara Contractors all came in with disappointing results. The company’s financing strategy has been questioned in these columns before and one wonders at the logic of financing costs over the past five years nearly double the returns to shareholders. If it has not already done so the company needs to consider why with all the investment TOPCO is still making losses. The company’s investment in India continues to cost the company significant sums while St. Kitts and North America remain marginal after several years of efforts and expenditure. On the other hand the investment in National Rums of Jamaica Limited is producing good returns.

Overall the return on assets and shareholders’ funds, has dipped slightly.

Sterling Products Limited
While turnover has increased, profit after tax has declined and therefore so have measures such as return on assets and return on shareholders’ funds. Chairman Dr Leslie Chin attributed this to higher deferred tax which was not completely compensated for by a decline in the corporation tax charge. In order to maintain the same level of dividends paid in 2009 the company will be paying out 53% of its after-tax profits.

New Building Society
The notice convening the meeting excludes from the right to attend the meeting, mortgage account holders, who under rule 21 of the Society’s Rules are described as advance members. While a similar exclusionary note was included in the 2009 annual report, such persons have always been allowed into the meetings and the basis of the decision to exclude them is questionable.

The other three major issues of note are: 1. the Society has been finally brought under the Financial Institutions Act although it has a four-year transitional window; 2. it is still in breach of section 7 of the Act, an issue I have pointed out before; and 3. the Society actually lent one billion dollars less in 2010 than in 2009.

Indeed, despite the housing programme in which it should be playing a major role, the number of loans at the end of 2010 was a mere seventeen more than in 2009, a clear indication that the Society lost significant market share during the year.

While the report acknowledges the mutual nature of the Society’s ownership it not only repeats the word “profit” ad nauseam but the directors appear not to understand the meaning of the concept. No wonder then that they have ignored rule 23 relating to rebates, an issue which the directors agreed at the last meeting to review following a question from the floor.

For those attending the meetings, enjoy your gifts.

The Ministry of Culture, Youth and Sport – or the sporting ministry?

Beneficiaries of hundreds of millions in Sports and Arts Development Fund uncertain.

Introduction
Today’s column continues a review of the 2011 budgetary allocations by the National Assembly to some of the principal ministries of government by looking at the Ministry of Culture, Youth and Sport, a ministry with which the Guyana Tennis Association of which I have been President for about eighteen months has had a long and unsatisfactory relationship.

As the table below shows, the total to be spent by this ministry in 2011 is $2.055 billion, 28% over 2010 and a 73% increase over 2009. If one wants to see how strange this government’s priorities are, one has only to compare this ministry’s budget with that of the combined campuses of the University of Guyana which in 2011 were allocated $582 million in 2009 and $657 million in 2010. Indeed, in 2011, the National Assembly voted more for sports in 2011 than the total allocation to the University of Guyana for any of the past three years! And as we shall see later, the financial management in this ministry is serious enough to invite charges being brought under the Fiscal Management and Accountability Act against those officials responsible for the reckless disregard of the requirement of that Act and ordinary standards of accounting and accountability.

[table to be inserted]

All figures are in millions of Guyana dollars. Source: Estimates 2011

Resource allocation
Despite the name of the ministry, sport seems always to get the highest allocation and for 2011 is allocated $964 million or 47% of the ministry’s allocation, with culture receiving 23% and youth 22%, and the administrative costs of running the ministry taking up the remaining 8%. Of the total, capital expenditure accounts for 40% while recurrent costs account for the remaining 60%.

The ministry employs a total of 359 staff of which 207 are contract employees, up from 159 three years ago and from 197 one year ago. The number of contract employees in each of the four functional areas is culture 62; administration 40; youth 92 and sport 13. As this series has shown this is one of the areas – procurement being another – that offers opportunities for the most unsatisfactory spending and for politicized decision-making by government departments. The average salary paid to each contract employee is approximately $1.2 million per year, significantly more than double the minimum wage.

The mysterious Sports and Arts Development Fund
The Estimates show that for the administration budget, wages and salaries paid to all employees, including those on contract, are $80 million or 52% with utilities accounting for $22 million or 14%. For Culture, wages and salaries cost in 2011 are $110 million or 25%; security $42 million or 10%; national and other events $72 million or 16% and Subsidies and Contributions to local organizations $133 million. And here is where there is a huge problem. Page 387 of the Estimates reveals that $100 million of this $133 million goes to a Sports and Art Development Fund of which no account is ever given. Since 2007, some half a billion dollars has been voted for this Fund but with no systems and procedures in place to ensure proper accountability. Despite questions raised in the 2010 budget debate by AFC MP Mr David Patterson about this Fund which was announced with much fanfare in 2007, the Fund appears to have escaped the attention of the Audit Office which never seems to have eyes for some really serious spending. When MP Sheila Holder of the AFC asked for details last year, Dr Frank Anthony dismissively said that “reports are not available.” Simple, isn’t it?

In the Youth budget, $155 million (37%) is spent on wages and salaries; $22 million on maintenance of buildings; $32 million on utilities; $42 million on “Other”; $12.5 million on training; and $9.7 million as subsidies and contributions of which $5 million is for the President’s award which inexplicably is listed as an International Organisation!

For sport, the current annual operating expenditure is $217 million with the major categories of expenditure being wages and salaries and materials and supplies each of $12 million; maintenance of buildings $10 million, utilities $17.9 million and subsidies and contributions to local organsiations of $120 million, the entire sum of which is paid to the National Sports Commission (NSC). The budget of the NSC shows that it is also to receive a capital grant of $530 million from the central government giving it a total of $650 million. This total is then allocated to capital expenditure of $530 million and current expenditure of $120 million, the full sum received as a subvention.

The pool
It is evident from the table that capital expenditure is relatively insignificant for all the functional areas with Administration’s capital budget being the equivalent of 3.7% of its current budget; Culture 10%; Youth 6.3% and Sport 344%! And this introduces the swimming pool saga, a project that first arose in 2007 and that is taking twice as long to complete as was planned. But the expenditure is also hazy and defies scrutiny. In the 2009 capital estimates, a total project cost of $405 million was stated for the construction of a swimming pool, rehabilitation of roof and electrical system at Cliff Anderson Sports Hall, lighting fixtures and rehabilitation of National Gymnasium, lockers for Colgrain Pool and purchase of sports gear and equipment. In the 2011 estimates, with the only significant additional work being the Athletic Track, the cost has gone up to $1.5 billion! This is clearly outrageous but again, more questions than answers.

National Sports Commission
There is an unhealthy and incestuous relationship between the ministry and the National Sports Commission where the financial lines are crossed with the ministry continuing to expend amounts voted as subvention and capital provision for the NSC. The NSC is a statutory entity created by Act 23 of 1993 and should have not less than six nor more than eleven members. The commission has been defunct for several years but PPP/C MP Mr Neil Kumar operates it like a one-man show in association with the Minister, Dr Frank Anthony. From time to time and at public events the former NSC Chairman Mr Conrad Plummer is called out to act in that role, but yet no effort is being made by the Minister to (re)constitute the commission as required by law.

Up to the time of the last audit report, the NSC had not had an audit since 2004, nor had the Minister presented to the National Assembly the annual report required under section 80 of the Fiscal Management and Accountability Act 2003. Despite these serious lapses that could constitute misfeasance in public office, the National Assembly continues to award this unlawfully-operating entity vast sums of money annually. It begins to sound as though the National Assembly either could not care or does not understand the implications of its vote when it allocates money to this and similarly placed entities.

When the question of the failure to have audited financial statements came up in the 2007 Audit Office Report, the ministry assured the Audit Office that the “National Sports Commission was pursuing the preparation of all outstanding financial statements.” Years later, very little appears to have changed. But once again the Audit Office has to share responsibility for the increasing disregard which this ministry and the National Sports Commission show for the law and for accountability. Another body under this ministry with a similar disregard for the law, accounting and accountability is the National Trust, a separate and legal entity created by Act 20:03 of the Laws of Guyana, and which would therefore be subject to separate financial reporting and audit. The National Trust is similarly deficient in respect of submission of financial statements for audit as required by law but there is no evidence that the ministry has taken steps to ensure compliance in this regard.

When the Audit Office reported on unexpended amounts totaling $55.5 million transferred into an Endowment Fund (?) instead of being refunded into the Consolidated Fund, the glib retort of the Head of the Budget Agency, ie, the Permanent Secretary was that “it was impractical to refund the amount of $152.398M to the Consolidated Fund at that stage, as the ministry was committed to pay the amount for the stadium lights. He also indicated that he [emphasis mine] gave permission for the sum to be deposited into the Projects Account.” This person had no problem or hesitation in admitting that he knowingly broke the law!

Procurement
As with all other procurement agencies, this ministry routinely breaches the Procurement Act in which capital works are awarded in a piecemeal manner to avoid adjudication at the level of the National Procurement and Tender Administration Board (NPTAB). As the audit report noted, these were undoubtedly obvious breaches of the Procurement Act 2003.

In 2008, the Ministerial Tender Board awarded one contract under the capital subhead National School of Dance in the sum of $0.382M on April 17, 2008 and yet the contract was signed on April 1, 2008, two full weeks before the decision by the Board. Then in 2009, eighteen transactions totalling $2.016M were undertaken for the acquisition of materials for the rehabilitation of the NOC Guest House. Of these, eleven totalling $1.278M were related to one supplier. According to the Audit Office report, the treatment of the transactions was clearly in breach of Section 14 of the Procurement Act (2003), as it relates to contract splitting.

Funny
But perhaps the most laughable response to come from the ministry to audit queries was in relation to non-compliance with the procedures for the payment of fuel. The ministry explained that the acquisition of fuel is based on a traditional and inherited policy from the Guyana National Service, involving Guyoil!

Despite these significant weaknesses and the fact that the ministry has so far failed to account for World Cup 2007 money, it remains one of the major beneficiaries of lottery money, which is another story. It is easy to conclude that this ministry is infected by a cavalier, sporting attitude more associated with West Indian cricket than with financial management.