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Page 130

AUDITOR GENERAL’S DEPARTMENT 2010

130

PART 9 | COMPLIANCE AUDITS

Unapproved Travel Incentive/Gratuity

59.2 Despite being the subject of a previous report and the absence of the MOFPS

approval, the Entity continued to pay travel incentive to staff in the constituency

offices and gratuity to retired Returning and Assistant Returning Officer.

Management was advised that failure to obtain the requisite approval

undermines the Government’s accountability procedures which could result in

disciplinary action against the culpable officer.

Staff loans and advances

59.3 Although, this issue was raised in previous reports, management failed to obtain

Ministry of Finance’s approval to operate its loan scheme. The Entity continued

to grant interest free loans, contrary to the prescribed rate of eight percent

(8%). Loans totalling $1.2M were granted without deliberation by the

Committee, also adequate supporting documents and securities were not

always obtained prior to loan disbursements. Management failed to recover

seven (7) loans totalling $251,330. Motor vehicle loans totalling $1.3M were

inadequately secured as Bills of Sales were not executed, nor were liens

registered on the vehicles. These deficiencies not only breached the guidelines

but could result in irregularities, abuse and loss of public funds.

Outstanding Advances

59.4 Advances totalling $245,000 made to two (2) officers in March 2009 remained

outstanding. There was no evidence that management had made any effort to

recover these amounts.

Procurement Breaches

59.5 Contrary to the Procurement Guidelines competitive quotations or the requisite

approvals were not obtained to justify the use of the sole-source procurement

method to procure goods and services totalling $24M; several items were

purchased without deliberations by the Procurement Committee and minutes

for the period March 2008 – February 2009 were not signed by the members to

authenticate the decisions taken. Therefore, it was not possible to ascertain

how the Entity satisfied itself that the best prices were received. Strict

adherence to the procurement guidelines was recommended.

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25

Auditor General’s Department - Performance Audit Report Fisheries Division

5. INFORMATION MANAGEMENT

CRITERIA:

5.1 Financial transactions are accurate, complete and carried out in accordance with the Financial Administration and Audit Act, Government procurement Guidelines, Ministry of Finance and the Public Service circulars and directives, and established accounting principles.

5.2 An adequate system exists which captures and disseminates information that is timely and reliable thereby ensuring that public accountability obligations are met.

5.3 There exists accurate and sufficient data on the Country’s fish stock. AUDIT FINDINGS

5.4 The total expenditure for the year was approximately $110M.

5.5 The financial transactions were classified using the established government coding system. Consequently, the financial information was not captured under the specific activity, such as MCS, this made it difficult to ascertain the cost associated with the various activities.

Table 3- Financial budget and Expenditure

Proposed Budget Approved Budget Actual Expenditure Recurrent 90,830,827 98,029,000 94,952,185.41 Capital 26,695,000 14,161,000 15,252,150.48 Total 117,525,827 112,190,000 110,204,335.89

5.6 It was reported that suppliers’ bills submitted to the Ministry of Agriculture were in many instances not paid on a timely basis. This impacted negatively FD capability to procure goods and services.

5.7 Documented operational procedures were not in place to guide fisheries officers

in the execution of their regulatory duties.

5.8 A report prepared by FD indicated that they did not capture adequate biological and catch information to facilitate informed decision on the status of Lobster fishery.

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Page 22

Page 22 Performance Audit

JUTC: Governance, Procurement and Operations Management July 2020

Legislative Context

2.1 JUTC is a limited liability company incorporated under the Companies Act of 1998. The entity operates under the Transport Authority Act (1968) and the Public Passenger (Kingston Metropolitan Transport Region) Act. Under the Public Passenger Transport (KMTR) Act. JUTC currently operates through an exclusive licence within the KMTR; any other bus operators wishing to operate within the KMTR must do so as a sub-franchisee with the consent of the JUTC. At end-June 2019, JUTC’s management indicated that it was awaiting written confirmation to a request to the MTM for the renewal of the exclusive licence which expired in September 2018.

JUTC was partially compliant with Corporate Governance Framework and PBMA

2.2 The Corporate Governance Framework for Public Bodies, 2012 states “Each Board of a Public Body should be subject to a formal and rigorous annual appraisal of its performance and that of its committees and individual Directors. The Ministry of Finance & Planning should develop a Performance Evaluation Template to be used by all Boards”. However, we found no evidence to indicate that this activity was performed during the review period. The failure by the MTM to ensure that such an evaluation was conducted limited the ability of the Ministry to effectively monitor the performance of the Board against expected results, manage risks and advise/inform the Minister1.

2.3 The Corporate Governance Framework recommends that the board members declare any conflicts of interest in keeping with the established Conflict of Interest rules identified in the Code of Ethics. Upon inspection of the Board minutes, the declaration of conflict by the members to the chairman was first recorded in board minutes on November 1, 2018. The minutes indicated that no conflict of interest had been declared during the review period.

2.4 We found that the Ministry of Transport and Mining (MTM) had not developed a competency profile for the Board of the JUTC, for the period under review. We expected the competency profile for the Board to be consistent with that outlined in the Competency Profile Instrument for the Boards of Public Bodies (MoFPS, January 2017). We requested the information from the Ministry on December 2, 2019, which indicated that it had not been advised of the Instrument being brought into effect but had requested the information and would thereafter move to implement a regime for administering the Instrument.

1GoJ Corporate Governance Framework, PRINCIPLE 15: MONITORING ARRANGEMENT OF MINISTRIES

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Page 19

19 | Auditor General’s Department Special Audit Report – AGD Pension Payments

Table 6. Stale-dated Cheques en-cashed April 2010 to March 2011

Cheque Number Amount ($) Cheque Date Date En-cashed

Period Elapsed

(months)

1180101 444.52 23-Apr-09 22-Apr-10 13

1192207 15,000.00 23-Apr-09 10-May-10 13

1428298 36,719.41 25-May-10 15-Mar-11 9

1240010 444.52 25-Aug-09 29-Apr-10 8

1338728 16,196.78 25-Feb-10 25-Oct-10 8

1339243 23,351.96 25-Feb-10 9-Nov-10 8

1391817 14,778.42 24-Jun-10 1-Mar-11 8

1224308 18,689.99 23-Jul-09 14-Apr-10 8

1353648 16,196.78 23-Mar-10 25-Oct-10 7

1387296 2,096.73 24-Jun-10 31-Jan-11 7

1275908 25,005.28 22-Oct-09 2-Jun-10 7

1406851 14,778.42 22-Jul-10 1-Mar-11 7

1336860 18,721.54 25-Feb-10 7-Sep-10 Over 6

1401334 3,000.00 19-Jul-10 8-Feb-11 Over 6

1422369 14,778.42 25-Aug-10 1-Mar-11 Over 6

Total 220,202.77

3.12 As at March 2011, 238 cheques totalling $8.7 million were cashed but not submitted to the Department by the bank. We observed that the AGD did not prepare a list of these unreturned cheques and included with the bank reconciliation statement, as required by the Ministry of Finance’s guidelines13. There was also no evidence that the responsible officers investigated to verify the authenticity of these payments or whether these cheques were subsequently submitted.

3.13 Our findings also highlight weaknesses in the execution of the reconciliation for the main pension account. Although the reconciliation of this account was completed up to May 2011, at the date of our audit these irregularities, dating back beyond six years, were not detected before January, 2011. This suggests that the reconciliation process is not accomplishing one of its intended objectives.

3.14 Annual Returns for monthly paid pensioners were prepared up to 2005. This was as a result of a problem with the printing of the report. The AGD advised that the pension payroll system can only print up to eleven months. This constituted a breach of the Income Tax Act, which requires that employers submit an annual return of Income Tax deducted from employee’s emoluments by January 14 of the following year.

13

Ministry of Finance Circular No. 22, dated 13 November 2003

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Page 65

Audit Observations and Recommendations

Auditor General’s Department – Annual Report – 2007/2008 58

weaknesses could contribute to the loss of public resources. Management was advised to implement corrective measures. Overpayments 242. Two (2) officers were overpaid a total of $47,109 in relation to salary and gratuity payments. Management was advised to effect recoveries. Advance payments on Gratuity 243. Three officers were granted advance payments totalling $1,076,657 on gratuity before the end of the first year of their three-year contracts in breach of the contract requirements of payment upon successful completion of contracts. This action also contravened Ministry of Finance’s guidelines. Outstanding Advances 244. Six persons had outstanding advances totalling $602,197 for periods in excess of a year. In addition, there was no evidence that the staff loan/advances policy was approved by the Ministry of Finance. Board of Directors 245. The Council’s Board was dissolved in March 2006 and a new board has not been appointed since, thus denying the Council proper guidance in its operations. Fixed Assets 246. a) Inventory records did not always contain pertinent information such as the cost of assets, acquisition dates, serial numbers assignees and location numbers and assets were sometimes not marked with the departmental codes. Management was advised of the need to improve the controls in order to safeguard the Council’s assets.

b) An officer who was in receipt of full upkeep had possession of one of the fleet

vehicles on a continuous basis. This matter has been the subject of previous audit reports.

PROFESSIONS SUPPLEMENTARY TO MEDICINE 247. An audit of the captioned entity for the year under review disclosed that the administrative and accounting functions were performed by the Ministry of Health due to irregularities discovered in the prior period. The following weaknesses were identified.

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