AuGD: No accounting for billions
Municipal corporations slapped with ‘disclaimer opinions’ after failing to provide appropriate records
AUDITOR GENERAL Pamela Monroe Ellis, in her recently tabled 2022-2023 annual report, issued 22 “disclaimer opinions” to several municipal corporations for their failure to properly account for billions of dollars spent or in their possession.
The issuance of a disclaimer means that the auditor cannot form an opinion on the financial statements submitted because the necessary information and evidence to do so have not been provided.
Under the caption of “financial exposure” the auditor general pointed out that for the fiscal periods spanning 2006-2007 to 2013-2014, the St James Municipal Corporation was unable to provide proper accounting records to support expenditure of more than $5.6 billion and revenue of more than $3.9 billion.
For the period 2003- 2007 and again 2007-2012, the Jamaica Labour Party had majority control of the St James Municipal Corporation. However, for the period 2012 to 2016, the People’s National Party controlled the municipality.
The Manchester Municipal Corporation was also found wanting, having spent $2.5 billion over the period 2013-2014 to 20162017, but was unable to provide sufficient appropriate accounting records to the auditor general to substantiate the spending. There was also “unsupported revenue” of $33.2 million for the four fiscal years. The PNP has controlled the Manchester municipality over the four-year fiscal period spanning 2013 to 2017.
‘UNSUPPORTABLE REVENUE’
In the Auditor General Department’s ( AuGD) annual report, which was tabled i n Parliament earlier this year, Monroe Ellis indicated that the Portmore Municipal Corporation did not submit the necessary accounting records to explain how $955.4 million was expended for fiscal years 2010-2011 to 20132014. “Unsupported revenue” of $989 million was highlighted for the municipality.
The JLP enjoyed majority control of the Portmore municipality
between 2007 and 2012, while the PNP took over between 2012 and 2016 and currently maintains control.
The other municipalities that were slapped with “disclaimer opinions” by the auditor general are Clarendon, Portland and St Thomas. The Clarendon municipality did not submit critical documentary evidence in the form of accounting records to support the expenditure of $375.2 million and revenue amounting to $226.2 million for fiscal year 20102011. For the Portland Municipal Corporation, there was “unsupported expenditure” and “unsupported revenue” of $427.4 million for the period 2012-2013 to 20172018. The St Thomas Municipal Corporation had “unsupported expenditure” of $226.9 million for 2010-2011.
In the 2022-2023 annual report, the auditor general said she issued 24 modified audit opinions, including 22 disclaimer opinions, owing to the absence of sufficient appropriate evidence to support balances in the financial statements of the municipal corporations.
Section 24A (2) of the Financial Administration and Audit (FAA) Act states: “It shall be the duty of every accountable officer to keep and present in accordance with this act and any regulations made or directions given thereunder proper and
accurate accounts of all transactions entered into by him and all public monies or other property held by him.”
However, Monroe Ellis said that the management of each municipal corporation did not provide sufficient appropriate accounting records to support the transactions, account balances, and disclosures in the financial statements due to a breakdown in the controls over the preservation and security of the accounting records as required.
“As a result, I was unable to perform key audit procedures to determine whether the financial statements were prepared, in all material respects, in accordance with the applicable financial reporting framework,” she said.
Marsha Henry-Martin, permanent secretary i n the Ministry of Local Government and Community Development, is reported to have told the auditor general that steps have been taken to improve compliance and provide relevant support to the municipal corporations.
In the report, the auditor general also revealed that there were 81 outstanding financial statements from the municipalities across the country at the time it was tabled in January.
The St Ann Municipal Corporation heads the delinquency list with 14 outstanding financial statements covering the period 2009-2010 to 2022-2023.
MISSING STATEMENTS
St Thomas Municipal Corporation had failed to submit 10 financial statements from 2013-2014 to 2022-2023.
Other municipalities that are i n chronic delinquency include the Westmoreland Municipal Corporation, with nine outstanding financial statements, followed by St Mary Municipal Corporation with eight outstanding financial statements.
The St Mary Municipal Corporation says it does not have specific internal personnel to work on the financial statements.
“Frequent staff turnover has negatively impacted the speedier reduction of the outstanding statements as new staff takes time to be trained to carry out the related tasks needed,” it said.
In its response, the Westmoreland Municipal Corporation said its 2013-2014 statement is being reviewed by the AuGD. It said the 2014-2015 statement will be resubmitted, while those for 2015-2016 and 2016-2017 will be completed by March 31.
The St Ann Municipal Corporation said the completion of its 2009-2010 financial statement was set for December 2023. The corporation said its 2010-2011 statement is projected for completion by March 31, 2024.
“Approval received to engage persons on contract to complete 14 statements on a timely basis,” the municipal corporation added.
The auditor general said there was no response from the St Thomas Municipal Corporation.
The RJRGLEANER Communications Group-commissioned Don Anderson poll findings revealed this week show that the electorate gives the municipal corporations a failing grade for their performance.