THE finance ministry was hit by further embarrassment yesterday, following news that the Auditor General's Department has uncovered fraud totalling $21 million.

The disclosure at yesterday's sitting of the Public Accounts Committee of Parliament came on the heels of revelation that a director in charge of taxation policy at the ministry was slapped with several charges under the Corruption Prevention Act; the Customs Act; forgery; conspiracy to deceive and conspiracy to defraud.

Committee members lashed the Ministry of Finance (MoF) for its weak internal audit system, and chastised new financial secretary Dr Wesley Hughes.

Acting chief financial officer, Granville Green outlined the circumstances under which a powerful position was abused over a four-year period, leaving taxpayers $21 million in the red. Green did not name the person or persons responsible for the theft, but referred to the culprit as "she", adding that she had fled the island.

"It was a situation wherein this unit was headed by what we call a SEG4 (senior executive group) and one would have thought that, ok, this person is in charge of this unit of about three persons and was authorised. She was the co-ordinator of the MOU secretariat and was liaison between the secretariat, the union, the various training institutions and all that. So she basically could authorise and approve documentations, expenditure, on a basically daily basis," Green told the committee.

Exposing the weak internal controls, Green said that the fraud was exposed by the ministry's accounting staff, noting that documents submitted to the accounts department were taken to be legitimate. "But unknown to us, this person was generating documents, invoices, for catering services, training, and various other things. She created even her own catering service."

Committee chairman, Dr Omar Davies asked Green if the companies were fictitious or were in collaboration with others.

He replied that some were fictitious and in other cases they were in collaboration with legitimate companies.

Among the other entities caught in the fraudulent web are banks, and Green said that the police have zoomed in on a bank supervisor, who is likely to be arrested.

The affected division of the ministry, while it still functions, now requires authorised specimen signatures of signing officers, and only two officers are so designated.

"If their names are not on it, then it is returned," said Green under pressure from a skeptical Davies.

The meeting was informed that the unnamed woman had also signed and collected cheques representing overseas travel allowances for senior officers, and which were only discovered after one individual who was entitled to the allowances made repeated inquiries about his allowances over a period of almost a year.

Investigations revealed that the monies had already been paid out, but not to the legitimate officer.

The meeting was also told that the millions were paid out to a company for the supply of desktop computers and laptops, the full order of which was yet to be received.

Later in the meeting, it was disclosed that the ministry wanted a messenger to return $38,000 in funds overpaid for messenger services provided to the ministry — through no fault of his own — Dr Davies suggested he be left alone.

Other members agreed with Dr Davies, given the disclosure that the $21 million was stolen and that the accused had fled the island.

To date none of that money has been recovered and no arrest has been made.

PAC members expressed frustrations over the deliberations on the MoF and member Tarn Peralto said that the repeated occurrences were wasting his time.

"I am more convinced that us sitting here is futile. I believe this example has made me realise that, because if it is that we are here to try to manage through the agencies, the expenditures and the methods of accounting through which the taxpayers' money is protected, then I dare say we are wasting our time, because it is not," Peralto charged.

Another member, Dr Morais Guy, also vented his frustration.

"I understand that this is a huge ministry. But we have one section of that ministry which is responsible for issuing procurement guidelines and it is the very same ministry that we have people who are, as the AG's report is indicating, guilty for breaching the same guidelines," he said.

Ministry officials will return to the PAC next week.

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