THE MINISTRY of Local Government and Community Development appeared before Parliament's Public Accounts Committee (PAC) last Tuesday, where it was revealed that three departments of the Ministry owed in excess of $160 million in statutory deductions.
Metropolitan Parks and Markets (MPM), the Jamaica Fire Brigade (JFB) and the Social Development Commission (SDC) all said the money was used as working capital to meet inescapable expenses.
Today, In The House looks at some of the issues raised by Auditor-General, Adrian Strachan, at the time of his audit, and the responses from the Ministry.
Strachan: The Appropriation Accounts for the Ministry in respect of the financial year 1993/94 were received for examination but the supporting records required to verify their correctness were not presented for audit.
Ministry: Due to the amalgamation of the Ministry of Local Government with the Ministry of Works, the accounting records have been misplaced in the transition. Efforts have been made to locate the records, however, only some subsidiary ledgers were located.
Strachan: As at the date of this report, an overpayment of $210,877 made to an officer who was mentioned in my 1998/99 annual report was still not recovered. The Ministry advised that steps were being taken to resolve this issue.
Ministry: The amount of $210,877 as stated is incorrect, the balance owing is $232,418.16. Based on the recommendation of the PAC this matter was referred to the Attorney-General for his ruling. In a letter dated May 7, 2001 a ruling was made which in essence stated that inter alia: (1) It is likely to be treated as a mistake of law, which renders it irrecoverable. (2) The length of time which has passed and the representation made to her (the officer), which would have induced a belief that the money was hers to do as she pleased.
Strachan: A recent tax audit carried out at the company (MPM) disclosed that it was indebted in the sum of $20.107 million for statutory deductions made from employee's emoluments over the period 1994 to January 2000. Tardiness in paying over deductions could expose the company to penal interest charges and legal action.
Ministry: Efforts are being made to have all statutory liabilities settled. April and May 2000 were paid in February 2001, however, MPM has been experiencing financial difficulties, hence further non-payment. MPM was brought before the courts and an agreement for a payment plan was made. A payment plan from the Inland Revenue Department was received stating that an initial deposit of $5m should be made followed by monthly instalments in the amount of $500,000. We since then applied to the Ministry for the provision of funds.
Strachan: An audit of Central Parks and Markets (CPM) for 1999/2000 disclosed a number of shortcomings. As at the date of closure of the company $49,067 was owed to it by former employees who were overpaid emoluments.
Ministry: The Ministry of Finance gave approval for the writing off of this amount.
Strachan: Adequate supporting documents were not produced (by CPM) to substantiate 14 payments totalling $187,150.
Ministry: The company was closed on February 28, 2000, therefore it would be very difficult to locate these vouchers, especially without more details.
Strachan: There were persistent delays in the remittance of statutory deductions made from employees' salaries (by the management of the Jamaica Fire Brigade). At the time of audit statutory deductions totalling $122.722m were owed to the relevant authorities in respect of the period January 1999 to June 2000.
Ministry: The Jamaica Fire Brigade has had tremendous difficulties in meeting its payment of statutory deductions due to insufficient funds received on subvention month after month. The monthly subvention is often times insufficient to to cover salaries let alone any other payment.
Strachan: The Social Development Commission was exposed to possible penalties and legal action resulting from the non-remittance of statutory deductions of $23.623m made from employees' emoluments for the months September 1999 to March 2000.
Ministry: The department has signed agreements with the Inland Revenue, National Insurance Scheme (NIS) and the National Housing Trust (NHT) to pay the arrears outstanding over a given period of time.
