AG: Govt failing to reconcile debt exchange instruments
AUDITOR General Pamela Monroe Ellis says that the Ministry of Finance and Planning's failure to reconcile information on both Jamaica Debt Exchange (JDX) and National Debt Exchange (NDX) investments could derail the Accountant General's efforts to identify errors in both transactions.
"Since the implementation of the debt exchanges, in February, 2010 and February, 2013 (respectively), the ministry has failed to reconcile the value and number of old investments, which were exchanged in the JDX and NDX issues," the auditor general said.
"In the absence of proper reconciliation, the Accountant General Department will not be able to identify errors that may have occurred during the debt exchange process," she lamented.
"Our investigations also disclosed that the Ministry of Finance is not submitting Government of Jamaica loan obligations concerning the JDX and the NDX on a timely basis," she stated.
She pointed out that the Accountant General had advised that there was a problem with the reconciliation of the debt exchange instruments since the implementation of JDX in 2010. The department had also reported that the nominal values of the instruments continue to change without any explanation, and that letters on the issue have been written to Financial Secretary, Devon Rowe, on the matter. However, it was not stated whether there was any response from the ministry.
Monroe Ellis said that this has impacted on accurate and timely reporting of transactions in connection with the public debt.
She made the disclosures in her 2012/13 report on the Financial Transactions and Financial Statements of the Government of Jamaica, which was tabled in Parliament last week.
According to Monroe Ellis, discrepancies in statements and accounting records for loan agreements made available by the Account General's Department may also be contributing to inaccurate public debt reports and endangering government's strategic plans.
She said that the system being used by the Accountant General to verify loan proceeds lodged into the Consolidated Fund (Budget) was not working as intended.
The Accountant General could not present her office with evidence to indicate whether the proceeds from 21 loan agreements, valued at well over US$2 billion, were lodged into the Consolidated Fund, although Section 114 of the Constitution of Jamaica requires that all revenues received by the Government must be lodged to the Fund, she explained.
"Additionally, the Accountant General's Department was not aware of loan disbursements made to the Government, totalling US$12. 244 million, until the lender submitted invoices in subsequent periods," she observed.
She also noted that the Accountant General's Department did not present evidence to indicate whether US$4.06 million of these disbursements was deposited into the Consolidated Fund.
She said, too, that the audit identified statement discrepancies, as well as deficiencies in the accounting records for loan agreements between the Ministry of Finance and Planning and the department.
"We identified differences of J$129.2 billion and US$109.4 million between the accounting records maintained at the ministry, and those maintained at the Accountant General," she stated.
She said that the audit of the department's accounting records and financial transactions provided evidence of weaknesses in the internal controls governing the management of bank and trust fund accounts, as well as the preparation of related financial statements.
She pointed out that this would impair the Accountant General's ability to prepare and present reliable statements on the public debt, and that these omissions would contribute to inaccurate reports, which might adversely affect the Government's strategic decisions. She noted also that failure to maintain proper and accurate records also constitutes a breach of Section 24A of the Financial Administration and Audit Act.
She said that many of these weaknesses were highlighted in previous audit reports from her office, which has now identified one of the major causes of the recurring problems as the manual system used by the Accountant General for record keeping and to prepare statements.