Editorial | Municipal authorities’ demerit

This newspaper, as we suspect is also the case with the auditor general, Pamela Monroe Ellis, won’t hold its breath, expecting that the installation of new accounting technology will fix the problem of financial accountability at Jamaica’s municipal authorities.

For, while technology, or the insufficiency thereof, may be an issue, what the parish governments really have is a crisis of management and the failure to hold those who are responsible to account.

Among the things that can, and should, happen on this front, is the levying of surcharges, as is allowed under the law, on those public officials who, because of negligence, waste taxpayers’ resources.

In circumstances where the loss to the public purse goes beyond negligence or incompetence, but is occasioned by deliberate action, the authorities must ensure that the book is thrown at those who are responsible, to the full extent of the law.

Additionally, holding people to account may also mean firing, and publicly so, the supposed accountable officers under whose watch problems continuously recur, suggesting either inattention or incompetence. Indeed, it is to be recalled that, under the Local Governance Act of 2016, the day-to-day operations of the municipal corporations are to be overseen by a CEO, who resorts to the elected council via its chairman. The corporations are also required by law to have professional financial officers.

These issues arise in the context of the auditor general’s latest annual review of government operations for 2023/24, which was released in January.

FAILED TO PROVIDE OPINION

As has been the case in recent reports, Ms Monroe Ellis either qualified, or failed to provide an opinion on the accounts for the majority of the local government bodies, some going back several years. The potential exposure is for hundreds of millions of dollars.

The corporations also do not use the mandated accounting procedures because, they say, they lack the appropriate technology.

Mostly, though, the problem is poor record-keeping.

The Hanover Municipal Corporation (HMC), the local government for the namesake parish in north-western Jamaica, is a prime example.

Ms Monroe Ellis said this of the local government in her report: “I was unable to express an opinion on the financial statements due to the pervasive absence of sufficient and appropriate audit evidence to support the transactions, account balances and disclosures in the financial statements. The management of the HMC reported that the corporation was unable to provide majority of the accounting records to support the significant account balances, transactions, and disclosures in the financial statements due to the passage of time and an IT system failure that occurred in December 2022, which resulted in the loss of accounting information for the periods under review. Consequently, they were unable to confirm the accuracy and completeness of the financial reports that were submitted for audit. As a result, I was unable to perform key audit procedures to determine whether the transactions, account balances, and disclosures were fairly presented in the financial statements.”

The Hanover local government was not the only one to lose crucial records because of reported critical failure of IT systems or natural disasters.

BID TENDERS

At the meeting of Parliament’s Public Accounts Committee (PAC) last week, officials from the local government ministry disclosed that bid tenders had been issued for new accounting technology systems for the municipal authorities. Once implemented, they said, these should report on the authorities’ financial management.

That, indeed, should be the case with respect to efficiency. But, like Ms Monroe Ellis, this newspaper holds firmly that, especially in the context of Jamaica, losing digital records should not mean that all is lost.

Said the auditor general: “Even if your information technology (IT) systems fail, you should have the hard evidence – the paper evidence – to support it, and that is lacking.

“We have to consider the real issues, in terms of how the municipal corporations and the accounting staff account for the information, completing a cash book, having evidence of the journal entries made, and securing payment vouchers.”

Moreover, some of the reasons given by the municipal authorities appear to border on the fanciful, such as, in one case, that the documents were sequestered by an investigative agency and returned rat-eaten.

In the face of the auditor general’s past complaints about the accounting failures, marked improvement has been seen in a handful of councils.

“There are three councils that have been able to secure their information and submit it … Trelawny, Portland and Manchester,” Ms Monroe Ellis told the PAC. “That, to me, is an example that it is possible.”

Those parishes are hereby awarded Gleaner Merit Star, in the bronze categories. Hopefully, next time they can earn silver, or even gold. The others earn our demerit points, and perhaps investigations by other agencies.