THE Accountant General's Department (AGD) is expected to respond to recommendations by the auditor general for a status update on all pensioners and dependents when the Public Accounts Committee (PAC) of Parliament resumes sitting this morning at Gordon House.
The auditor general had requested last March that the AGD complete an update within six months as one of several recommendations to protect the management of the Government's pension process from fraud which has been occurring over several years.
This followed a special audit of the pension disbursement process, which revealed that the AGD did not have appropriate strategies in place in 2010/2011 to protect some $17 billion in pension payments from manipulation and abuse.
According to Auditor General Pamela Monroe-Ellis, the audit showed that risk assessments were not done regularly to facilitate effective controls, and there were no reviews of the pension payroll activity log to identify unauthorised transactions.
She said that despite a $14-million fraud in 2009, the department did not create a control mechanism to reduce the likelihood of fraud. The department currently pays out an average $14.6 billion per year to 28,000 government pensioners, and Monroe-Ellis insisted that there was need to improve the design, implementation and monitoring of key controls to prevent and detect irregularities.
Her special audit found, among other things, that there were shortcomings in the controls designed to prevent pension payments to deceased pensioners, and that controls did not automatically stop payments to pensioners whose payment criteria were not met, nor did it have a proactive strategy to mitigate fraud or other risks that could occur.
The audit also found that the AGD did not routinely probe and follow up on uncashed cheques and that, in fact, as at May 2011, there were 4,826 uncashed pension cheques, valued at $187.2 million, dating as far back as April 2004.
Monroe-Ellis noted that in that regard the AGD has indicated that they were in the process of upgrading the pension software, along with some of their administrative processes to address the weaknesses highlighted in her report. However, she insisted that the software modification must be pursued with alacrity to cauterise any loss to government due to the existing weaknesses.
"It is imperative that the department seriously consider implementing our recommendations to enhance the efficiency of the pension payment process and mitigate the risks to which it is exposed," Monroe-Ellis said.