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."