Resh­ma Ra­goonath

Some 74 blank cheques have "dis­ap­peared" from the Min­istry of Tourism along with 12 oth­er cheques to­talling $844,492.15.

This was among a num­ber of star­tling rev­e­la­tions con­tained in the Au­di­tor Gen­er­al Ma­jeed Ali's 2014 Re­port in­to the Pub­lic Ac­counts of T&T.

The 201-page re­port, which was laid in the House of Rep­re­sen­ta­tives on Wednes­day, list­ed nu­mer­ous in­stances where min­istries and state en­ter­pris­es dis­re­gard­ed the fi­nan­cial reg­u­la­tions and reg­u­la­to­ry in­struc­tions set out for prop­er ac­count­ing pro­ce­dures for all state bod­ies.

In Chap­ter 2-Ex­pen­di­ture: Ac­counts of Ac­count­ing Of­fi­cers, un­der the sub­sec­tion Frauds and Loss­es (Min­istry of Tourism), the Au­di­tor Gen­er­al re­port­ed that "twelve cheques for amounts to­talling $844,492.15, as well as, 74 blank cheques were dis­cov­ered miss­ing by the Min­istry." This mat­ter is un­der in­ves­ti­ga­tion, the re­port stat­ed.

Act­ing Com­mis­sion­er of Po­lice Stephen Williams was al­so con­tact­ed for com­ment on the mat­ter. How­ev­er, calls and text mes­sages to his cell phone went unan­swered.

Tourism Min­is­ter Ger­ald Hadeed, when con­tact­ed by Sun­day Guardian about the miss­ing cheques, re­ferred all queries to the min­istry's ac­count­ing of­fi­cer Per­ma­nent Sec­re­tary Don­na Fer­raz.

On Fri­day, Fer­raz's sec­re­tary said all ques­tions should be emailed to cor­po­rate com­mu­ni­ca­tions man­ag­er Sher­ma Mitchell. Mitchell con­tact­ed the Sun­day Guardian yes­ter­day and said Fer­raz would is­sue a re­sponse to ques­tions about the miss­ing cheques and the in­ves­ti­ga­tion in­to their dis­ap­pear­ance.

She said the state­ment would have been emailed by 6 pm. How­ev­er, she lat­er re­quest­ed more time as she said she was await­ing an up­date from the po­lice. By 6.50 pm she said the min­is­ter and PS had to re­view the state­ment and au­tho­rise its re­lease.

Even­tu­al­ly at 7.44 pm, in a one-line state­ment, Mitchell said, "Kind­ly note that the Min­istry of Tourism will re­spond to your queries re­gard­ing state­ments made in the Au­di­tor Gen­er­al Re­port 2014 on Mon­day, May 18 at 4 pm."

$97m in over­pay­ments

Mean­while, be­tween 2011 and 2014 over­pay­ments to­talling near­ly $97 mil­lion were made by var­i­ous min­istries.

From 2011 to 2014, some 20,773 cas­es of over­pay­ments were dis­cov­ered amount­ing to $96,918,275.08. He said rough­ly 47 per cent of over­pay­ments have been re­cov­ered over these years. Ali al­so said in 2014 alone they de­tect­ed 3,975 cas­es of over­pay­ments each in ex­cess of $100,000. This to­talled $23,941,549.68. Some $12,902,236.36 has since been re­cov­ered.

"Min­istries and De­part­ments should en­sure that sys­tems to pre­vent and de­tect over­pay­ments are work­ing ef­fec­tive­ly," he said.

He stressed that the need for "the caus­es of over­pay­ments to be as­cer­tained and for con­trols to be strength­ened with a view to min­imis­ing the in­ci­dence of over­pay­ments." He ac­knowl­edged an at­tempt made by the Min­istry of Pub­lic Ad­min­is­tra­tion to find so­lu­tions to the prob­lem in 2011-2012 with the set­ting up of a com­mit­tee to ad­dress the is­sue.

Nu­mer­ous ac­count­ing breach­es

The Au­di­tor Gen­er­al, in his re­port, had con­tend­ed that there were nu­mer­ous in­stances where doc­u­ments re­quest­ed for au­dit pur­pos­es were not pro­duced.

"This rep­re­sents a se­ri­ous breach both of the Au­di­tor Gen­er­al's con­sti­tu­tion­al and le­gal right of ac­cess to all doc­u­ments re­lat­ing to the Pub­lic Ac­counts and of fi­nan­cial and ac­count­abil­i­ty re­quire­ment," the re­port stat­ed.

Fi­nan­cial In­struc­tion 43 states, "All vouch­ers, paid cheques and oth­er rel­e­vant doc­u­ments shall on re­quest for Au­dit ex­am­i­na­tion be made avail­able to the Au­di­tor Gen­er­al or his nom­i­nee."

He list­ed 13 state en­ter­pris­es that failed to sub­mit au­dit­ed fi­nan­cial state­ments, among them the Ur­ban De­vel­op­ment Cor­po­ra­tion of T&T (Ude­cott) which has not sub­mit­ted au­dit­ed fi­nan­cial state­ments from De­cem­ber 31, 2008 to 2014. Lake As­phalt, Caribbean Air­lines and eTeck. Cepep Com­pa­ny and Namde­v­co are al­so among the state en­ter­pris­es that have failed to sub­mit their fi­nan­cial records.

Ali not­ed that fire-proof safes or vaults were not used for stor­age of pay­ment vouch­ers at var­i­ous lo­ca­tions, a long­stand­ing is­sue that need­ed to be ad­dressed.

"Prop­er main­te­nance of in­ven­to­ry records and tag­ging of items in ac­cor­dance with Fi­nan­cial Reg­u­la­tions (Stores) are cru­cial el­e­ments of this func­tion. Weak­ness­es in in­ven­to­ry con­trol are raised each year by the Au­di­tor Gen­er­al through man­age­ment let­ters and in the Au­di­tor Gen­er­al's Re­port on the Pub­lic Ac­counts. How­ev­er, breach­es con­tin­ue to be not­ed at a num­ber of Min­istries/De­part­ments," he wrote.

Those in breach of the pro­vi­sions, he said, were the Ju­di­cia­ry, Par­lia­ment, the T&T Po­lice Ser­vice (TTPS), and most min­istries.

FIU to re­view re­port

Head of the Fi­nan­cial In­tel­li­gence Unit Su­san Fran­cois, when con­tact­ed by Sun­day Guardian, said she had not seen the re­port, but that she and her le­gal team would re­view it.

When told about the con­cerns raised by Ali and the fi­nan­cial reg­u­la­tion breach­es men­tioned in the find­ings of the re­port, Fran­cois said she would look in­to Ali's con­cerns.

"I will have to go and get it (the re­port). Now that you are telling me about it, I will cer­tain­ly look at it. I have my le­gal peo­ple here. I will ask them to re­view it once we get it and by next week we should be in a bet­ter po­si­tion to make a state­ment, if we wish to make a state­ment," Fran­cois said.

In the re­port, Ali said the Her­itage and Sta­bil­i­sa­tion Fund, as of Sep­tem­ber 30, 2014, had a bal­ance of US$5.529 bil­lion. The Con­tin­gen­cies Fund stands at $100 mil­lion, Ali said. How­ev­er, for 2014 no ad­vances were made to the fund.

No con­tracts pro­duced toac­count for mil­lions spent

One of the key ar­eas of con­cern Ali high­light­ed in his re­port was fail­ure by min­istries and state en­ti­ties to pro­duce con­tracts for re­view.

A to­tal of 45 signed con­tracts with pay­ments amount­ing to $76,474,101.86 were made by nine min­istries, in­clud­ing the Of­fice of the Prime Min­is­ter and TTPS, but they were not pre­sent­ed for re­view to en­sure com­pli­ance with con­tract terms.

The Tourism Min­istry, mean­while, had the high­est num­ber of con­tracts (ten) to­talling $5,816,741.13 which were not pro­duced for re­view.

Mean­while, the Min­istry of Ed­u­ca­tion had three con­tracts val­ued $36,384,625.19 which were not pro­duced for re­view.

Ali al­so point­ed out the at­tor­ney gen­er­al's fail­ure to re­spond to his mem­o­ran­dum, dat­ed Jan­u­ary 23, 2015, in which he re­quest­ed that cer­tain in­for­ma­tion "re­quired to as­sess the val­ue of ac­tu­al and con­tin­gent li­a­bil­i­ties re­lat­ing to the Pub­lic Ac­counts for the year end­ed Sep­tem­ber, 30, 2014," be fur­nished by Feb­ru­ary 23.

He re­quest­ed doc­u­ments on le­gal mat­ters and claims han­dled on be­half of the State dur­ing the year end­ing Sep­tem­ber 30, 2014; pend­ing lit­i­ga­tion in­volv­ing the State up to Sep­tem­ber 30, 2014; and judge­ments ob­tained dur­ing the year.

He al­so re­quest­ed in­for­ma­tion on oth­er oblig­a­tions that could be­come ac­tu­al li­a­bil­i­ties of the State up­on ful­fil­ment of spec­i­fied con­di­tions; ac­tu­al or, where ap­plic­a­ble, the es­ti­mat­ed fi­nan­cial im­pli­ca­tions (gov­ern­ment li­a­bil­i­ties or amounts re­ceiv­able) of each of the above mat­ters (in­clud­ing costs in­volved) to­geth­er with the pos­si­bil­i­ty of re­im­burse­ment.

"A re­sponse has not been re­ceived," he said.

Ali sug­gest­ed that con­sid­er­a­tion be giv­en to up­dat­ing lo­cal fi­nan­cial di­rec­tives to con­form to cur­rent best prac­tice. He point­ed out that the In­ter­na­tion­al Fed­er­a­tion of Ac­coun­tants (IFAC) is­sues In­ter­na­tion­al Pub­lic Sec­tor Ac­count­ing Stan­dards (IP­SAS) "which are con­sid­ered to be best prac­tice guides and are be­ing adopt­ed by gov­ern­ments world-wide in an ef­fort to in­crease trans­paren­cy and ac­count­abil­i­ty and so fa­cil­i­tate bet­ter gov­er­nance."

Pay­ments forunoc­cu­pied build­ings

Since De­cem­ber 2011 to April 2014 the State has paid some $464,000 for the rental of a build­ing and car park spaces for the To­ba­go of­fice of the Green Fund Ex­e­cut­ing Unit which has re­mained un­oc­cu­pied.

The rental was paid at $16,000 per month since De­cem­ber 2011. This was just one of sev­er­al in­stances where state re­sources were be­ing used to pay for un­oc­cu­pied build­ings.

Howai: The PS must en­sure com­pli­ance

Fi­nance Min­is­ter Lar­ry Howai has dis­tanced his min­istry from the sting­ing com­ments and fi­nan­cial breach­es high­light­ed in the re­port.

Howai, in an emailed re­sponse to ques­tions posed by the Sun­day Guardian about the find­ings of the re­port, said over the past two years his min­istry had put sys­tems in place to strength­en and im­prove the com­pli­ance at min­istries.

How­ev­er, he said, "We wish to note an un­for­tu­nate ten­den­cy to dump the re­spon­si­bil­i­ty for breach­es iden­ti­fied by the Au­di­tor Gen­er­al on the Min­istry of Fi­nance and the Econ­o­my and, by ex­ten­sion, its Min­is­ter and Per­ma­nent Sec­re­tary."

Howai said as the ac­count­ing of­fi­cers of their min­istries, "it is the re­spon­si­bil­i­ty of the Per­ma­nent Sec­re­tary to en­sure the com­pli­ance of their min­istries with all ac­count­ing rules and reg­u­la­tions."

He said the Fi­nance Min­istry would con­tin­ue its ef­forts "notwith­stand­ing the lim­i­ta­tions placed on us by the Pub­lic Ser­vice Reg­u­la­tions, to hold se­nior pub­lic of­fi­cers through­out all Min­istries ac­count­able."

The min­is­ter added that his min­istry would al­so con­tin­ue "to re­quire that they (Per­ma­nent Sec­re­taries) take their re­spon­si­bil­i­ties se­ri­ous­ly and ad­dress the breach­es not­ed by the Au­di­tor Gen­er­al in his an­nu­al re­ports and to re­duce and even­tu­al­ly elim­i­nate such breach­es in the fu­ture."

Howai ex­plained that the over the past two years his min­istry had sent out guide­lines re­gard­ing how spe­cif­ic types of trans­ac­tions should be dealt with.

"We have re­mind­ed Per­ma­nent Sec­re­taries of the im­por­tance of their roles as the Chief Ac­count­ing Of­fi­cers with re­spon­si­bil­i­ty for en­sur­ing com­pli­ance with all ac­count­ing re­quire­ments. We have ap­proved all train­ing re­quests. We have held meet­ings with the Per­ma­nent Sec­re­taries to dis­cuss com­pli­ance and have in­sist­ed that every­thing is done to re­spond to the Au­di­tor Gen­er­al when these au­dits com­mence," he stressed.

The min­is­ter did not com­ment on the 74 blank cheques and the 12 oth­er cheques to­talling $844,492.15 that "dis­ap­peared" from the Tourism Min­istry.

How­ev­er, he said be­fore tak­ing the mat­ter fur­ther re­gard­ing the doc­u­ments which were not pre­sent­ed for au­dit, "we would want the min­istries to make an at­tempt to lo­cate the doc­u­ments."

Howai sug­gest­ed that in many in­stances "it is sim­ply that re­sources need to be as­signed by the var­i­ous min­istries to lo­cate the doc­u­ments."

He added that the Fi­nance Min­istry had man­dat­ed the Per­ma­nent Sec­re­taries to lo­cate those doc­u­ments "as a mat­ter of ur­gency."