Board members of the T&T Free Zones Company Ltd came under fire on Wednesday when they appeared before a Parliamentary Committee as they revealed they did not have an internal auditor and they were filling the gap.
Committee chairman Wade Mark said it was “amazing” that the company was operating without an auditor and demanded that the matter be rectified.
The board members came under scrutiny by the Public Accounts Enterprises Committee (PAEC) as its accounts for 2012 to 2017 were examined.
Company chairman Karen Tom Yew-Jardine said the company was profitable and had created 1,000 jobs from free zones companies.
The company was established in 1988 and designed to encourage local and foreign investment in export-driven projects that create jobs, develop skills and create external markets for products.
Mark criticised the procedure where board members were acting as an internal audit team in the absence of an internal auditor.
“It’s very unusual for a company to rely on a board for that (internal auditor). You need an independent auditor since board members are appointed people,” Mark said.
Permanent Secretary of the Ministry of Trade Frances Siegnoret said it was a pertinent point “very well taken” and it presented an opportunity for change in the upcoming new structure of the Special Economic Zones format which the company was changing too. She said the issue would be raised with the executive.
The acting Investments Division director of the Finance Ministry Chintamani Sookoo also said the Ministry’s State Enterprises Performance Manual prescribes internal auditors and she “strongly” recommended that the company get one.
Tom Yew-Jardine said the company never had an internal auditor since its inception over 30 years ago.
Company director Esther Le Gendre, who initially defended the situation, said board members’ internal auditing was more about processes to ensure system functioning, rather than auditing financial statements.
“But we hear you,” Le Gendre said.
Mark insisted, “It must be done. You can’t continue with this (lack of) oversight of all these years. Is either you alive or you dead, you can’t say you only have a few people and have no internal auditor. Either do it properly or not.”
Mark also expressed concern that the company does not analyse financial statements from companies under its purview and relies on the “integrity” of such reports.
“Explain that. You have a duty to examine these reports,” Mark said, accusing the directors of taking reports for granted.
Le Gendre said only audited financial statements are accepted from a certified auditor. “That’s why we rely on statements’ integrity...usually there are no flaws in the statements.”
PAEC members Foster Cummings and Jennifer Baptiste-Primus, however, did not see it was absolutely necessary for the accounts to be analysed, though Baptiste-Primus felt any management letter with recommendations from auditors should be heeded. Le Gendre eventually agreed “there’s room” for further analysis of statements to observe companies’ trends.
Seignoret also agreed when Mark said the company should ensure free zone companies submit their financial statements and monitor them since such companies enjoy tremendous benefits. He noted that one such company, T&T Fine Cocoa Company, had not submitted accounts since 2014.
“Chairman, you hit the nail on the head regarding the tremendous benefits, so we’ll be urging swift action,” Seignoret added.
Seignoret said the policy for the transformation of the Free Zone Company into the Special Economic Zones is projected to be ready by September. On whether the existing company may be closed down and a new company might replace it, Tom Yew- Jardine said there was no information suggesting that.
PAEC member Cherrie-Ann Crichlow-Cockburn repeatedly voiced concern about the company having a special focus and encouraging companies to Tobago. Tom Yew-Jardine’s answers did not seem to convince her but Le Gendre assured the new policy will likely change and Tobago was not excluded from anything. Le Gendre said the company hopes to have a new fee structure, ahead.