Three suspected in pension scam, leave jurisdiction
Audit finds widespread, long-running manipulation
Stabroek News
February 12, 2003
The final report by the Auditor General's department on the pension scam should be finished soon but no charges have been laid against persons already identified in the interim report submitted in November.
Three of the persons suspected as the perpetrators of the fraud have escaped jurisdiction and the police are reported to be working on finer details to bring charges against seven assistant postmasters across the country.
But charges against the Ministry of Labour, Human Services and Social Security's employees suspected to have devised the scam, are not expected shortly as retrieving evidence against the three is proving to be difficult, sources said yesterday.
In 2002 the government printed 40,000 pension books but later found that laser printers, offset press and photocopiers were used to print forgeries, a number of which were cashed. There was also misuse of genuine pension books by ministry employees.
The scam was uncovered on August 26, when the Berbice Fraud Squad got tipped off that a former postmaster was running such a scam and a search was conducted of his home. The Berbice Fraud Squad found 31 partly used but genuine pension coupon books and 1558 forgeries for the month of September 2002. The forgeries alone carried a value of $2.6 million.
A search subsequently conducted at the home of an assistant postmaster found a post office stamp and several schedules relating to old- age pension payments. It was these findings that alerted the ministry, and the police and Auditor General were called in to probe the extent to the fraud.
The police have not yet uncovered where the forged coupons/books were printed or to which social workers, the 31 genuine pension books were allotted for distribution. In the case of the latter, lax record keeping by the ministry facilitated this lack of paper trail.
The interim report said the Guyana Data Forms of 16 Leonora Public Road got the $1.2M contract to print the 40,000 old-age pension books by a waiver of central tender board procedures. The books were printed and delivered between January 11 and February 10, 2002. However, the printer still has the plates in his custody and the audit office advises the ministry to recover these and have them properly secured.
It found that the Director of Social Services was authorised to issue the pension books but did not do so in a sequential order, nor did he record the serial numbers of the books against the names of the social security officers who requested them. The report said pension books were to be recorded in a controlled forms register for receipt and issue but this was not being done, hence the inability to trace the officer(s) who had control of the 31 pension books mentioned above. Security has since been tightened and such records are now being kept.
During the audit, 23 employees from the 15 post offices were interdicted with 10 exonerated and returned to duty but seven were turned over to the police and a further six were assisting with the investigation.
The forged coupons (leaf-lets in a pension book), the audit office said, were sent to various post offices: Campbellville, New Amsterdam, Anna Regina, East La Penitence, Bagotsville, Agricola, Bourda, Nigg, Rose Hall, Skeldon, Whim, Reliance, Wismar, Aurora, Charles-town, GPO mobile, Mahaicony, Benab and Skeldon, to be cashed. The total of forged coupons exchanged for cash between May and October was 8,078 at a value of $13.958M. The audit office is continuing investigations to look at those coupons cashed for March and April of 2002 to determine how many were fraudulent.
The audit office said checks were not carried out by the supervising officer at the post offices to ensure the coupons cashed were genuine. The explanation given was that the specimen books were not sent to the post offices but the audit office found this not to be true.
The interim report said an independent probe by the Guyana Post Office Corporation implicated three senior officers in the ministry in the fraud. These persons have been dismissed.
The audit found that the system was manipulated for payment to coupons with serial numbers above 40,000 (the amount of pension books printed) with all of these cashed at the New Amsterdam Post Office.
Duplication of serial numbers was also found mainly at the New Amsterdam Post Office with two such coupons found at the Benab and WeldaadPost Offices.
Additionally, pension books issued to pensioners (by social security officers) carry an issue sheet bearing the receiver's name, identification, address, registration, life number, serial number and signature or mark. The audit found the identification and address of persons on coupons were false. One person also appeared to have signed several coupons. Payments in Region Six carried no life numbers. There were also false signatures on coupons.
The ministry's accounts staff were also found to be lax in that they carried out no checks on the coupons reimbursed for the post office to ensure that they carried the special security features with which they were printed.
"Had this been carried out, the forged coupons would have been detected earlier," the interim report of the audit office said. The ministry had employed a contracted em-ployee to examine all coupons before they were reimbursed but this officer did not carry out any of the examination and had his services terminated. The new security features enabled the probe to move along as quickly as it did, sources said.
The interim report recommended disciplinary action against officers who failed to exercise due care in relation to the scam.
Since that report was submitted, the ministry has effected security measures to ensure that there is no repeat of the scam. These security features would be changed periodically to allow for the non-manipulation of the system.
It is suspected that the scam relating to pension vouchers dates back several years as the Auditor General report for 2001 noted that 40,000 books were printed and cashed although there were only 32,000 pensioners. The old age pension currently is $1728 per month.
The ministry provides old age benefits to persons over 65 years as well as social assistance benefits.
