By Lynford Simpson, Staff ReporterTHE MINISTRY of Agriculture was sharply criticised yesterday by Parliament's Public Accounts Committee (PAC) for its tendency to grant loans and salary increases without prior approval from the Ministry of Finance and Planning.
An unapproved loan/advance of $30 million by the Ministry's export division to the parent Ministry; the granting of a $500,000 salary increase to a senior officer of the Jamaica Agricultural Society (JAS) and the setting up of a motor vehicle loan scheme for officers of the Jamaica 4-H Clubs, are three such instances cited by Auditor-General Adrian Strachan.
Otherwise, and for some minor infractions, the Auditor-General was satisfied with the accounting practices of the Ministry.
Godfrey Perkins, Permanent Secretary at the Ministry, told the PAC that the $30 million in question was subsequently approved by the Ministry of Finance "and is to be cleared." He disclosed, under questioning from PAC member Derrick Smith, that a former Permanent Secretary had approved the loan and that there was no documentary evidence of any request for its approval.
"That request was not made at the time of the advance or loan," Mr. Perkins admitted. He said the request came after the loan/advance had been made.
Mr. Smith also asked why a Permanent Secretary would approve a loan of that magnitude without going through the proper channels. Mr. Perkins explained that at the time of the loan there were outstanding dues owed to the Caribbean Agricultural Research and Development Institute (CARDI). With an imminent meeting of CARDI, the decision was taken to "clear up the arrears".
Robert Martin, Deputy Financial Secretary, said the Ministry should have sought prior approval from the Ministry of Finance before taking that decision. He said, however, that with the payment already made, a decision was made to avoid embarrassing the former Permanent Secretary. That person has since resigned and is said to be "serving overseas".
In the case of a senior officer at JAS having his salary increased by $500,000 per annum, Mr. Perkins said he had written to the Board of the Society, stating that this was not acceptable. The matter was referred by the JAS to the Ministry of Finance for a ruling. A statutory body, the JAS is obliged by law to follow the directives of the Ministry of Finance.
Mr. Martin said the increase should have had the approval of the Public Sector Establishment Division (PSED) of the Ministry. He said it was not a done deal that the increase that was granted will stand as that will be decided by the Deputy Financial Secretary in charge of the division.
In relation to the motor vehicle loan scheme, the Auditor-General, in his comments, said no Board or Ministry of Finance approval was seen for the setting up of the scheme. He also said that there was no evidence that the loans were appropriately secured to protect the interest of the Jamaica 4-H Clubs.
In its response, the Ministry said a system was now in place to secure the loans by placing a lien on titles.
Mr. Perkins explained that the loan scheme was started in 1997 with $1 million, the proceeds of a fund-raising event put on by the 4-H clubs. He said the 4-H clubs were only now seeking the approval of the Finance Ministry as at the time, they thought they "had the authority to do so".
Audley Shaw, PAC chairman, was unimpressed: "It seems to be a theme that's running through here ... lack of approval".
Noting that the practice was seemingly "becoming the norm", Mr. Shaw said: "This is the sort of recurring decimal that we face, where, despite even the promulgation of a new law, it seems to be that everything is being violated left, right and centre."
