Accountant General's Dept under fire

BY ALICIA DUNKLEY-WILLIS Senior staff reporter

Thursday, March 06, 2014    

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THE Accountant General's Department has come under fire for late reconciliation of bank accounts for extended periods, which Auditor General Pamela Monroe Ellis has said leaves the entity exposed to the risk of fraud and loss of public funds.

The issue, which is one of several highlighted in the 2013 report of the Auditor General, which stated that the audit of the department's accounting records and financial transactions revealed weaknesses in the internal controls governing the management of bank and trust fund accounts and preparations of related financial statements.

Monroe Ellis noted that reconciliation of five bank accounts were in arrears for periods ranging from three to 10 months.

She said: "Our review of bank reconciliation statements for 10 accounts revealed several reconciling items being carried on the statements for protracted periods (the earliest date noted was 1980). We were, therefore, unable to determine whether authenticity of unresolved debits and credits totalling $401.2 million and $19.3 million, respectively. The department may be exposed to the risk of fraud and loss of public funds if bank accounts are not reconciled monthly and adjusted items are not investigated and cleared on a timely basis."

On Tuesday the Opposition's Karl Samuda, raising the concern during the meeting of the Public Accounts Committee of Parliament which has been examining the audit report, criticised the agency for dropping the ball.

"As part of being an auditor one of the most important exercises is to conduct a bank reconciliation, in her report she says you don't do bank reconciliations for as much as 10 months, now how can you run an agency as important as this and you don't have a bank reconciliation which is against good practice? That's not good accounting," Samuda noted.

Accountant General Carlene Murdock, in the department's defence, however, said "all bank reconciliations have been brought up to date to December 2013 and some to January 2014".

Asked by Samuda whether that was on account of the Auditor General's Report, she said "it was an ongoing exercise and so we are within the exercise that we had planned".

In the meantime, Monroe Ellis said several of the weaknesses of the department which were highlighted were the subject of previous audit reports. "We have identified that one of the major causes of the recurring problems is the manual system used by the department to prepare the statements. The department's record keeping system is still manual, we have identified this as a major contributing factor to the recurring discrepancies," Monroe Ellis said.

The issue which was also an irritant to Samuda who queried "why as a sophisticated country with educated people (Jamaica was) still fiddling around with manual operations". In response to that, Financial Secretary Devon Rowe said various systems were being modernised across the ministry and its departments.

"The manual systems at the Accountant General's Department have actually led to some of the challenges there. The lack of a comprehensive automated solution at the Customs Department have also led to some of the challenges, and we are taking steps to address the issues that have been identified and we expect that in the coming year we will be moving rapidly towards the modern country the member speaks of," the financial secretary said.





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