Finance Minister has two weeks left to submit Treasury Memorandum

Feb 12, 2017 News

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Finance Minister Winston Jordan currently has about two weeks left to submit a Treasury Memorandum to the National Assembly regarding the financial lawlessness that took place under the PPP some seven years ago.

A Treasury Memorandum is a document which outlines what will be done as it relates to the breaches and irregularities that are outlined in the Auditor General’s report.
The Public Accounts Committee (PAC), upon receipt of the Auditor General’s Report, scrutinizes it by having the head of the budget agencies along with its technical officers give answers to some of the identified breaches.
That committee then submits a report to the National Assembly documenting its findings and recommendations on the way forward. Once this report is laid, the Finance Minister has 90 days to prepare a Treasury Memorandum which will speak to remedies and sanctions if any.
The latest report from the PAC was laid on November 28, last year. But that report speaks to the Auditor General’s report for the years 2010 and 2011. It therefore means that the Finance Minister would be responding to a report that speaks to the irregularities which occurred during the PPP regime.
This report would have been prepared by former Chairman of the PAC, Carl Greenidge during the Tenth Parliament. With a new Chairman in place, being Opposition Member Irfaan Ali, the document was finally completed and laid in the House.
In the PAC’s latest report, the Parliamentary Sub-committee expressed concerns regarding a number of irregularities as pointed out by the Auditor General.
One issue that the PAC highlighted in particular was the “dishonest behaviour” of some accounting officers within the system. It is recommending that such elements must be removed.
According to the Committee, the culture where certain officials believe that it is simply acceptable to engage in unbecoming financial practices must come to an end.
Over the years, the PAC said that it has examined the Auditor General’s report only to find that the same financial transgressions are being repeated year after year.
To bring an end to this behaviour, the members have since put forward a number of recommendations. Among them, the PAC is calling for the Finance Secretary to be empowered to surcharge defaulting accounting officers. It is also suggesting that Accounting officers and/or engineering staff that knowingly wait until the end of December to sign off on incomplete projects, be removed from the system.
The PAC said that it is against this practice, which it considers to be “dishonest and not in keeping with the nation’s financial rules and regulations”.
Additionally, the Committee said that over the years, there have been a number of challenges regarding Budget Agencies.
The Committee observed that across budget agencies, Accounting Officers and/or engineering staff appear to persistently sign off on incomplete projects. It said that Accounting Officers were found in many instances, to not be implementing appropriate measures to avoid the recurrence of overpayment.
Compounding the situation is the fact that Government Agencies seemed reluctant to use the performance-based gratuity (specifically the withholding of increments) of Accounting Officers as a means of promoting efficiency.
Additionally, the Committee said that the recycling of Accounting Officers who had been cited for inefficiency from one agency to another remains an irritant.
The PAC said that it has also observed that in numerous cases, Performance Bonds and Insurance were seldom utilized as surety by Ministries/Regions against shoddy and incomplete work done by contractors.
In this regard as well, it found that there is a lack of clearly defined policies as it relates to invoking the Insurance and Performance bonds at the appropriate time.
The PAC noted, too, that log books not being properly maintained continue to be a perennial problem across Ministries/Departments/Regions.
Furthermore, the PAC has found that the Auditor General’s Engineering Department appears overstretched, given the number of expected interventions and the increase in capital works across agencies.
The PAC said that another frustrating challenge is the fact that Accounting Officers when challenged regarding the comments in the Auditor General’s reports for signing off on incomplete projects, are in the habit of behaving as though the contractors are automatically and legally liable for rectifying the defects.
The Committee said that a significant number of issues appearing before it are as a result of failure to put in place appropriate or timely policies and/or remedies. One such example it cited, was the unclear arrangements for the writing off of losses, which keeps recurring as queries annually.
The PAC also expressed its dissatisfaction with the fact that budget agencies are taking, on average, one year (minimal), to rectify queries highlighted in the Auditor General’s Report. It stressed that in no uncertain terms, changes have to be made in this regard.
While the Public Accounts Committee has delivered on its report for the years 2010 and 2011, it is still way behind. In fact, it is still to issue reports on the Auditor General’s findings for the years 2012, 2013, 2014 and 2015.
The last Treasury Memorandum was issued in 2013 on the PAC’s report for the year 2009.

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