Editorial | When are ministers told?

House Speaker Juliet Holness’ back-pedalling that allowed last week’s tabling of two reports by the Auditor General (AuG), Pamela Monroe Ellis, provides an opportunity for serious discussion of how much ministers know about these special audits and when they are informed.

In the specific case, an intervention by the finance minister, Nigel Clarke, would be helpful. Dr Clarke should say if he was ever told that Ms Monroe Ellis’ office was conducting audits of certain actions by Tax Administration Jamaica (TAJ) and the Financial Services Commission (FSC), for which he has portfolio responsibility, and whether he saw the AuG reports at any time prior to their tabling in Parliament last Tuesday. And if the minister didn’t know about the probes or their findings, who in his ministry did? Or ought to have been aware?

Separate from any statements by Dr Clarke and/or the financial secretary, Darlene Morrison, Parliament’s Public Administration and Appropriations Committee (PAAC) should convene hearings on the broader issues raised in the reports, including why the same, or similar, failures seem to recur continually in the public sector. For instance, the TAJ’s leasing buildings, agreeing to pay for their conversion, and having them unoccupied for long, has echoes of the finance ministry’s lease of the ground floor of the Oceana Hotel Complex (now the ROK) in downtown Kingston to house the Accountant General’s Department.

It would be useful to know how that issue was finally resolved and what, if any, cost to taxpayers.

NOT SUFFICIENT

It is not sufficient to merely claim that the Government’s procurement rules are too rigid to allow the timely and efficient spending of taxpayers’ money.

Last September, Speaker Holness decided to stick with her predecessor’s, Marisa Dalrymple-Philibert, controversial ruling that AuG’s audits of public bodies would have to wait two months before being tabled in Parliament, giving the relevant ministers time to comment on them. They argued that this was in keeping with stipulations of the Financial Administration and Audit Act and the Public Bodies Management and Accountability Act.

While Mrs Holness released an opinion by the parliamentary counsel, Lee-Andria Wilson, supporting her position, she, like Ms Dalrymple-Philibert, declined to publish one from the attorney general, Derrick McKoy, which reportedly supported the old practice of tabling the auditor general’s reports contemporaneously with their receipt.

The two reports tabled last week were sent to Parliament, respectively, last December and near the end of January. They were returned to Ms Monroe Ellis last week – ostensibly because they did not meet the Speaker’s rules for tabling.

They were promptly sent back by the auditor general.

Ms Monroe Ellis hasn’t publicly disclosed the basis of her action, including whether it related to an interpretation of the constitution that audits of public bodies, of whatever kind, must be sent to the Speaker for tabling without delay.

In ending the back-and-forth, Mrs Holness suggested that the decision related merely to the two specific documents, and that she relented only because Parliament would be in recess for a month.

With respect to the Financial Services Commission, the agency that has oversight for investment houses and pension funds, while the auditor general found “no evidence of widespread malpractices in the FSC’s human resources management” – an allegation that apparently triggered the audit – there were instances of hirings without the posts being advertised, and of people being employed without being interviewed. There were also cases of loose expenditure, including in one case, a US$28,000 contract for which the consultant had no terms of reference.

REGULARISE

The AuG recommended that the FSC regularise with the finance ministry issues relating to its establishment and its recruitment practices, while improving “transparency in its HR processes”.

Regarding the government’s tax collector, the Tax Administration Jamaica (TAJ), the agency, seeking to consolidate its operation in the town of Mandeville, leased a 42,300 square feet property. Over a three-and-half years period, to last August, it paid J$356.8 million, including taxes, without occupying the building. A near J$1 billion retrofitting of the property hadn’t begun, supposedly because of rigidities in the procurement processes.

In another case, in the town of Annotto Bay, in eastern Jamaica, the TAJ leased a property from a government parliamentarian at J$700,000 monthly. Up to last August $15 million had been spent on rental. But that property, too, up to the time of the AuG’s report, remained empty.

There was no evidence, the auditor general said, of the government MP directing the TAJ’s decision. However, unlike with the Mandeville property, the Annotto Bay lease didn’t have the oversight/involvement of the National Land Agency (NLA), which normally leases properties on behalf of the government bodies – an important observation in the face of previous recommendations.

In the 2017 Budget Debate, the then finance minister, Audley Shaw, reminded legislators that the previous administration in 2013 sold the Oceana property for $385 million to a consortium led by Pan Jamaican Investment. Yet, three years later it agreed to lease the ground floor building for the Accountant General’s Department and pay contractors $400 million to retrofit the space.

Mr Shaw suggested a sweetheart deal. His predecessor, Peter Phillips, called on the auditor general to conduct a probe.

Ms Monroe Ellis found that the agreed lease payment of $1,610 per square foot was 77.4 per cent higher than the NLA’s recommended rate. The finance ministry, however, indemnified the NLA from any negative repercussions from its decision. The auditor general also found that internal deficiencies led to J$52 million overrun in the retrofitting cost.

“In light of the negative financial exposure arising from the leasing arrangements, the GoJ (Government of Jamaica) must review its property leasing policy to minimise its risk exposure from future lease arrangements undertaken by MDAs (ministries, agencies and departments),” the auditor general said in her 2017 report. “The policy must provide clarity regarding the role of MDA versus the role of the Commissioner of Lands, in order to eliminate inconsistencies in applications.”

Seven years later, that recommendation remains relevant.