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Convert overdraft to loan
– Burrowes tells City Hall
Mr Keith Burrowes
With a bank overdraft hovering at some $50 million for the past few years, City Hall is likely to remain in dire straits unless intervening measures are implemented.
This comment was made recently by Presidential Adviser on Financial Matters and Chairman of the Municipal Implementation Committee, Keith Burrowes. He was at the time engaging a gathering of municipal officers and union representatives at a recent meeting held at the Sleep Inn International Hotel, Brickdam, Georgetown.
A bank overdraft allows an individual or company to spend more than the amount in their account. As a result that individual or company will have to repay the bank usually at a high rate of interest since the money spent does not belong to them.
The Georgetown municipality has repeatedly been forced to rely on a bank overdraft in order to offset its financial inabilities, primary among them the monthly payment of wages and salaries to its staff.
Burrowes, addressing the issue of the existing municipal bank overdraft, said, “You have got an overdraft of $50 million and this is one that I just couldn’t understand. If you look at the trend it is always between $49 million and $50 million for a number of years.”
He revealed, too, that this overdraft currently attracts in excess of $1 million in interest which is in fact much more than a loan would require.
“If I were in that position I would have converted that overdraft to a loan and pay less interest…If it is between $49 million and $50 million all the time what purpose is it serving? That overdraft is not serving any purpose anymore.”
Striking another blow at the limited financial awareness of key officials, Burrowes alluded to the several dormant municipal accounts.
He revealed that the municipality has some 10 separate bank accounts with about six containing monies that are not being used thus allowing for the accounts to become dormant and therefore are attracting costly interest rates.
“Do you know how much money you are paying? You are paying a whole set of money for withholding tax and all those things…”
The meeting also saw Burrowes hinting at an alleged case of financial skulduggery which has since spurred an investigation.
The Presidential Adviser made reference to financial activities within the Treasurer’s Department, which suggests that monies were being paid to phantom workers.
He explained that the process of payment, as was disclosed by the relevant officials of the Department, requires that monies be transferred from a general account to the salary account. This amount, he said, should only be the amount that is payable.
However, financial records have not indicated this, Burrowes intimated as he reflected on a troubling conversation that he had with the Acting Treasurer of the municipality.
“You know what has happened…and I am sure when this investigation is finished it will bring it out…the transfer was done but whatever was happening with the so-called phantom workers they could not have continued with that, so the money remained in the account.
“That is the only logical explanation because of the fact that you guys don’t have money. They (Treasurer’s Department) can only transfer what they have…you can’t transfer more than that,” Burrowes added.
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