Lack of financial records at local organs being reviewed at PAC

– as $465M paid to contractors by GM&CC still to be verified

Financial records to document transfer of funds and other transactions at some local organs were brought under the spotlight on Monday thus raising eyebrows at the Public Accounts Committee (PAC) meeting.
On Monday, scrutiny was brought to the former Communities Ministry as the PAC continued its examination of the 2017 and 2018 Audit reports.
According to the 2017 report, the Audit Office said it was unable to verify the accuracy, validity, and completeness of $475.6 million paid to contractors of the Georgetown Mayor and City Council. It could not locate records to account for the payment, labelling the documents provided as “sketchy” at best.
According to Permanent Secretary of the Local Government Ministry Prema Roopnarine, these were expenses incurred by City Hall. A Cabinet decision was taken for this aforementioned sum to be paid to three contractors.
City Hall has since been asked to provide a reconciliation on how these figures were derived but according to the records, “severe difficulties” have been encountered in getting documents to justify the breakdown of the amount.
A $52.1 million payment made to a contractor could not be verified. Records cannot be found by the Local Government Ministry.
“The City Treasurer and Town Clerk managed to find some contracts and copies relating to this. They have shared those with the auditors. We’re making some headway. In conclusion, Ministry of Communities paid $475 million based on a Cabinet decision that clearly outlined who to pay…Up until now, we’re having severe difficulties getting the documents to justify the breakdown of $475 million,” informed the PS.

In 2018, $297.7 million was transferred to municipalities but it was highlighted that these local organs continue to breach the Municipal and District Council Act, in relation to submitting timely financial statements.
PAC Executive Dharamkumar Seeraj questioned, “Can the Permanent Secretary tell PAC if the Ministry is taking any action to bring municipalities up to date with requirement under the Municipal and District Councils Act before they contemplate making more transfers for these municipalities?
Is the Ministry contemplating making it conditional that these defaulting municipalities bring their books up to date before transfers are made?”
According to the Permanent Secretary, letters have been dispatched, asking Councils to submit timely financial statements. She said they are implementing a comprehensive training programme, to build capacity in making these commitments.
“The Ministry of Local Government has written several letters to all municipalities encouraging them to bring their accounts up to date and submit for audit. We have also noted that there is an issue of capacity with training. We’re implementing a comprehensive training programme across the municipalities to help them in whatever areas they need to get these accounts up to date.”
The PAC also drew attention to the need for financial regulations governing local democratic organs, in order to bring about greater accountability. When the matter was discussed, Former Permanent Secretary, Emil Mc Garrell supported the need for financial regulation.
“It is indeed a challenge in relation to financial management at the municipalities and NDCs, in particular in relation to transfers from Central Government. Without financial regulation, as how they ought to conduct themselves, they are free to conduct themselves in financial matters in accordance to Chapter 28:01 and Chapter 28:02…As far as there is no financial regulation in place for municipalities and NDCs across the board, we have the challenges that we face here,” the former Permanent Secretary outlined.
PAC Executive Ganesh Mahipaul said in the case where moral suasion has not been upheld, there is a need for regulations.