Last update: 11-Dec-2013 3:23 pm
Wednesday, December 11, 2013
Trinidad & Tobago Guardian Online
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Financial irregularities at agri society
A probe into the Agricultural Society of T&T (ASTT) by internal auditors at the Ministry of Food Production over a 20-month period has unearthed financial irregularities in the organisation. As a result, Food Production Minister Devant Maharaj has instructed his ministry to withhold the $5.9 million the society was allocated in the 2013 budget, until the society can account for every cent spent. Maharaj has also called on National Security Minister Gary Griffith to investigate the alleged financial impropriety in the institution.
The ASTT’s president is Dhano Sookoo. Documents from the audit obtained by the Sunday Guardian showed that questions have been raised over the purchase of a $396,000 vehicle, a $6,500 monthly duty allowance paid to Sookoo, as well as the society’s high expenditure and deficit.
The audit shows poor accounting practices, weak internal control, inconsistencies, breach of financial regulations and misappropriation of funds into the ASTT, “which exposed the society to the likelihood of erroneous decision and the possibility of monies being manipulated for private gain.” Among some of the things the auditors discovered were:
• Use of white-off and lead pencil prevalent on accounting records
• Records of income and expenditure stored on secretary’s computer which had no password
• Payment vouchers not signed by president
• Trips not signed as authorised
• No initials of the certifying officer affixed to the vote book for vouchers passed for payment
• Some of the pages of the vote book initialled by one of the board members who had no such authority.
• Some transactions passed for payment without schedule of accounts being prepared and vouchers passed for payment under the incorrect votes.
Copies of the audits were sent to Maharaj and his permanent secretary, Sunday Guardian was told. The audits began in February 2012 and continued until October 8, 2013, by a team comprising Cynthia Sewdass, Jewan Daniel, Ramesh Gaya, L Maharaj, Sookdeo Sonnylal and Geraldin Ferdinand. Vote books, ledgers, files, payment vouchers, cash book expenditure, bank statements and schedules were examined by the auditors and interviews were held with Sookoo and ASTT staff members.
It was suggested that the ASTT:
• Establish accounting processes
• Detail the process of performing each task in an operation manual
• Consolidate its accounts into one cash book
• Establish a requisition to purchase system
ASTT’s $778,000 deficit
An examination of the ASTT’s vote book for the financial period October 2012 to September 2013 showed the society had spent $5,979,715.73 even though the ministry had released only $3.9 million of its $5.9 million allocation for the fiscal year 2012-2013. A vote book is used to record and monitor expenditure.
As of August 22, 2013, the ASTT’s outstanding debts stood at $93,737.80 of which $44,000 was attributed to arrears in salary, with the remaining $49,737.80 owing to Board of Inland Revenue (BIR) and the National Insurance Board. However, the latest audit dated October 8, 2013, revealed that the ASTT was faced with a deficit of $778,841.88 for short term employment and promotion, publicity and printing.
The first audit, held in February 1, 2012, showed that in most instances purchases were made verbally without the issue of a corresponding follow up purchase order. It also revealed that a cheque dated December 15, 2011, for $63,375 was issued to Alvin Ramroop for which there were insufficient funds for it to be honoured. Another document dated July 9, 2013, showed that $396,000 was released on May 10, 2013, for the payment of a vehicle, with $250,000 being spent and the remaining $146,000 not accounted for.
However, a follow-up audit, dated October 8, 2013, on the purchase of the said vehicle, showed that although “expenditure was incurred to the sum of $250,000 at the date of the completion of this exercise October 7, 2013, no vehicle was seen.” There were also queries about a $26,100 payment to Shamm’s Transport which provided transport to ASTT staff to a Christmas party last year.
Although two invoices were used, one for $24,100 and the other $2,000, the registration numbers of the vehicle were not recorded on bills, nor the number of staff transported. One report revealed that diesel was being purchased almost on a daily basis and mileage cannot be accounted for and balances of monies cannot be accurately verified. Questions were also raised about the ASTT having three bank accounts but no approval seen from the Ministry of Finance for those accounts.
No approval for Sookoo’s $6,500 monthly duty allowance
An account of records dated May 28, 2013, highlighted nine inconsistencies with the ASTT’s vote book, among them a $6,500 monthly duty allowance paid to Sookoo, using state funds. “This payment was made with effect from February 2013, arrears totalling $19,500. There was no approval seen from the minister for this allowance to be paid. This voucher was prepared by the president, approved for payment by same,” the report stated.
It was clearly outlined in the audit that the committee shall not use state funds for the payment of clothing, phone entertainment or subsistence allowances to the president, vice president or any ASTT member. Prior to January, a $1,500 clothing, $2,000 entertainment and $3,000 subsistence was paid to Sookoo.
Maharaj: It appears Sookoo rules with an iron fist
Maharaj said his ministry was concerned about the report of alleged financial irregularities and impropriety under Sookoo. Maharaj said he intends to launch a probe into the ASTT. He vowed that monies allocated to the ASTT would only be released to pay salaries and board renumeration, and not for any business transactions. “The ministry will launch an investigation via an internal audit. We see this as an apparent financial irregularity. It appears that Ms Sookoo rules with an iron fist over the members of the board.”
So far, Maharaj said, nine members of the society’s board have made complaints to the Fraud Squad. “The Fraud Squad has initiated an investigation, I was told. No one expect the nine members who went to the Fraud Squad to have the testicular fortitude to challenge what is clearly an indefensible act. We have attempted to put measures in place to regulate and control the activities within the ASTT, but we are being flouted by renegade and rogue elements there.”
Maharaj said he was also deeply concerned about threats and intimidation to four public servants working at the ASTT’s office.
Board member in shock over duty allowance
One of 26 directors of the ASTT, Lall Bhagaloo, said a lot of discrepancies were discovered in the audit. Bhagaloo spoke about the duty allowance for which there was no board approval in 2013. Bhagaloo said one of the articles in the MOU, signed between the ASTT and ministry, states that “no fees or allowances should be paid to any member on the ASTT board without the prior approval of the minister. When we saw this we were alarmed because no board member knew she claimed these allowances.”
Bhagaloo said Sookoo allegedly received as much as $32,500 in duty allowances. “We believe this is illegal.”
Sookoo: I have done no wrong
In response to the audit dated October 8, Sookoo said that a PCZ 7496 Prado which the ASTT had purchased for $396,000 was delivered to them by Toyota on October 8. “It was paid in full, the society owes Toyota no money.” To substantiate her claims, Sookoo e-mailed the Sunday Guardian a certified copy of the Prado dated August 16, 2013. Sookoo said Maharaj and the permanent secretary were duly informed that the vehicle was delayed by Toyota.
She said the remaining $146,000 was used to settle an outstanding balance of $90,000 to the BIR because staff did not remit salaries over a period of time and this incurred interest. “The decision to pay the BIR was taken by the finance committee of the ASTT, chaired by Bhagaloo a few months ago,” Sookoo said. Sookoo is not a member of that committee. The balance, Sookoo said, was used for goods and services and as a down payment for two new tractors costing $600,000.
The ASTT sold two of its old tractors for $167,000, Sookoo said, because they were incurring high repair bills. She said Maharaj knew about the new tractors since July and agreed that funds generated from the service of equipment must be accounted for. Sookoo said Maharaj had indicated in a meeting on July 16, 2013, which was recorded on minutes signed by Bhagaloo, that the ASTT was not under any obligation to seek approval by the ministry for the sale of the old tractors.
Asked if the ASTT had made a bad decision and if there was the possibility of monies being manipulated for private gain, she said, “All decisions for expenditure is made by the committee of management.” Sookoo said purchases and cheques issued are done by Gaynell Seenath, secretary of ASTT, a public officer. She insists that all transactions were transparent and that the ASTT did not overspend. “I have done no wrong,” she insisted.
Defending the $6,500 duty allowance, Sookoo said Seenath was responsible for all administrative matters and expenditures. “The president and committee of management members cannot record in any account book at the society. Seenath is responsible for undertaking all expenditures at the society and payment accordingly. She prepares and signs all cheques.”
Questioned if the duty allowance voucher was prepared and approved by her, Sookoo called on Maharaj to “bring on” a hand writing expert to verify if the signatures on the vouchers are hers. Sookoo said the ASTT committee has established a detailed programme to ensure that its expenditure does not exceed the amount allocated in any fiscal year. Sookoo said no one from the Fraud Squad had questioned or visited the ASTT’s office since Maharaj claimed there was impropriety at the society over a month ago.
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