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Page 6

6 | P a g e

Part One

Introduction

Background

1.1 The Caribbean+Maritime+Institute">Caribbean Maritime Institute (CMI) was established in 1980 by the Government of Jamaica and the Kingdom of Norway to train professional seafarers; primarily Jamaican, to operate what was then the Merchant of Marine Fleet. The CMI was converted to an Executive Agency under the Ministry of Transport, Works and Housing in April 1, 2001 and is the only internationally recognized maritime training and educational institution in Jamaica and the Caribbean, delivering educational training across three faculties. These are: The School of Marine and Professional Studies, School of Academics Studies, and the School of Advance Skills, which caters to industry needs by providing short courses. 1.2 CMI core programmes are accredited by the International Maritime Organization (IMO) and the University Council of Jamaica (UCJ). In addition, CMI continues to maintain its ISO 9001:2008 certification from Lloyd Registers on Quality Assurance (LQRA), for its Quality Management System (QMS). 1.3 CMI operates in a global space that caters for both the core marine and allied industry courses aimed at producing internationally competitive seafarers. CMI relevance is dependent on its ability to maintain its strength as an internationally recognized institute through the provision of maritime education and ensuring that pool of competent expertise are developed to ally to industry needs. CMI continues to forge partnerships with international shipping companies to provide training and seek employment for Cadets, student and officers.

Vision Statement

1.4 The vision of CMI “is to be the premier institution of choice for maritime education, training and applied research within the Caribbean and beyond.”

Mission Statement

1.5 The mission of the CMI “is to provide solutions through the application of knowledge, talents, and skills to continue to redefine the boundaries of tertiary education and professional maritime training.”

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June 09, 2021


Page 45

44

Section 6:

Financial Statements

Audit

Entity Head Date Certified

2005 2006 2007 2008 2009 2010 2011 2012

Ministry of Industry Investment and Commerce

5300 30/5/12 √

3. Expenditure for the year exceeded the voted provision by approximately $1.7 million. Section 116 of the Constitution of Jamaica was breached; this section requires Parliamentary approval for expenditure in excess of the sum provided by the Appropriation Act.

Entity Head Date Certified

2005 2006 2007 2008 2009 2010 2011 2012

Ministry of Transport and Works

6500 15/2/12 √

Ministry of Transport and Works

6500 A

15/2/12 √

Head 6500

4. The explanatory statement of the causes for the variations between approved estimates and expenditure was not submitted as required by the Financial Administration and Audit Act.

Head 6500 A

5. Expenditure for the year exceeded the voted provision by approximately $248 million. Section 116 of the Constitution of Jamaica was breached; this section requires Parliamentary approval for expenditure in excess of the sum provided by the Appropriation Act.

6. The explanatory statement of the causes for the variations between approved

estimates and expenditure was not submitted as required by the Financial Administration and Audit Act.

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June 09, 2021


Page 14

Part Two Housing Development Projects

13 Auditor General’s Department Housing Agency of Jamaica (HAJ) November 2015

2.6 It is our view that the absence of a feasibility study for the JEHP contributed to the myriad of challenges in the form of project delays, re-scoping, design errors, and the abandonment of one development (Mount Edgecombe V). These factors have resulted in the non-achievement of the deliverables to date – discussed further below.

A feasibility study should comprise

4 :

 The Development Budget

 Cash flow projection which, with minor adjustment, is equivalent to a projected Profit and Loss Account.

 Market research information establishing selling prices, estimates of demand, deposits and instalment structures and the developers estimates on the pace of sales.

 Risk analyses.

2.7 The absence of a feasibility study would have undermined good governance in the rollout of the programme in the following ways:

i. Without a feasibility study, HAJ would not have been informed of the viability and sustainability of the JEHP as well as the potential challenges that could affect the achievement of the intended outcome. Whereas an indicative cost for the development of the JEHP was included in the Cabinet+Submission">Cabinet Submission, which sought approval for the JEHP, it is our view that the absence of a feasibility study would also impair Cabinet’s ability to make an informed decision on the JEHP. This risk was actually manifested when HAJ was forced to abandon the Mount Edgecombe V development after it was determined that the land was unsuitable for housing development. This decision was made after spending $28.66 million for site clearance.

ii. There is no evidence that HAJ engaged stakeholders to determine the housing needs and where the demand was highest. This was evidenced by low interest for houses in the Luana housing development, the significant reduction in the number of housing solutions, the lowering of the selling price for the solutions and the shifting of resources to the Belle Air III housing development.

2.8 In addition to the absence of the feasibility study for the JEHP and the related issues stated above, we saw no evidence that the Board of Directors exercised due care regarding the monitoring and oversight of the JEHP. A sub-committee was constituted to monitor all projects, however, we saw no evidence that such monitoring was done. Further, in keeping with good public financial management arrangement, the MOF should have been an active party to any discussion regarding review of the feasibility budget and the re-scoping of the housing developments under the JEHP. There was no evidence that this was case. The Ministry of Transport, Works and Housing (MTWH) Strategic Business Plan 2014/2015 – 2016/2017 indicated that monthly monitoring of the JEHP would be undertaken in the form of site visits, technical

4 Source: Jamaica Mortgage Bank

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June 09, 2021


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