Since 2015, the International Monetary Fund (IMF) told the Government that the internal auditing systems for agencies that would benefit from oil proceeds, have to be strengthened. As of June 30, 2018, there have been zero improvements.
In an assessment paper handed over to the government, the Fund reminded that Guyana’s Fiscal Management and Accountability Act (FMAA) dictates that line agencies have an internal audit function. But only a few have this capacity. The IMF said those entities which do have such departments “are incapable of handling auditing of oil-funded projects.”
The IMF stressed, “Internal audit is an essential management tool for the efficient use of public resources and therefore, a more urgent emphasis should be put on completing its development. We have noted that progress in developing strong internal audit function is hampered by a lack of staff. If the Internal Audit function for oil and gas is to be advanced, it will be necessary to strengthen the central internal audit unit and accelerate recruitment of staff with some knowledge of internal audit. This must be accelerated this year.”
Finance Minister, Winston Jordan is on record stating that very few budget agencies, if any at all, can boast a proper system of an internal audit system that meets the test of competence.
The Finance Minister stressed that internal auditing has become a factor in the new accountability and control era. He said that the manner in which public sector entities maintain internal control and how they are held accountable has evolved to require more transparency and more accountability from these organizations that spend taxpayers’ funds.
Jordan emphasized that the role of internal auditing has evolved from an administrative procedure with a focus on compliance, to an important element of good governance. With this in mind, the Finance Minister promised that a project will be launched to review the needs and capacity of each budget agency or cluster of budget agencies so as to implement a proper system of internal audit.