Strachan points to inadequate controls in gov't departments
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BALFORD HENRY, Observer writer
Wednesday, January 18, 2006
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| STRACHAN. delay in the submission of the annual financial statements undermined the public accountability process. |
AUDITOR-General Adrian Strachan has criticised the weakness of internal control systems in government entities outlined in his 2004/2005 audit, tabled in the House of Representatives yesterday.
"Failure by several entities to comply with the government's financial rules resulted in inadequate controls over furniture and equipment, the use of motor vehicles and the preparation and payment of salaries," Strachan said in the report.
He said that reconciliation of many bank accounts also remained in serious arrears, creating an environment which facilitated the concealment of errors and fraud.
He said, too, that several agencies of the government continued to be tardy in submitting statutory deductions from employees' emoluments. At the time of his audit eight such entities owed arrears of approximately $3.4 billion.
"This was not only in breach of the relevant Acts, but could adversely affect employees' entitlement to certain benefits," he added.
Strachan said that he had noted several breaches of the government's prescribed rules for the procurement of goods and services. In some instances, there was no indication that the required recommendation of the National Contracts Commission or Cabinet approval was obtained.
"But the most common infraction," Strachan said, "was the failure of many entities to invite the required competitive price quotations before awarding contracts for less than $4 million.
"I was therefore unable to determine how those organisations satisfied themselves that the prices paid were fair and reasonable."
The report said that during 2004/2005, losses amounting to $16.6 million resulted from fraud, theft, negligence and flooding in various government organisations. These cases have been reported to the police.
"In addition, I was unable to verify the authenticity and correctness of payments totalling $17 million as the related vouchers or supporting bills were not presented for audit. I was also unable to ascertain whether assets, for which payments of about $10 million were made, had been properly accounted for," he said.
Strachan was also perturbed about the failure of the government entities to submit for audit annual financial statements within four months at the end of each financial year. He said that up to December ninth last year, he had not received 50 accounts for 2004/2005 and 12 for 2003/2004.
"Delay in the submission of the annual financial statements undermined the public accountability process and prevented a proper assessment of the entities, financial performance and their state of affairs," he said.
The report will now be forwarded to Parliament's Public Accounts Committee (PAC), which is chaired by opposition spokesman on finance and the public service, Audley Shaw, for review.
- balfordh@jamaicaobserver.com
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