Auditor general raps 12 State bodies over CDF • No reports for $204m in projects • No specific case of fraud

Auditor general raps 12 State bodies over CDF • No reports for $204m in projects • No specific case of fraud

Senior staff reporter

Thursday, November 19, 2020

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SEVEN municipal corporations and five government agencies tasked with implementing projects under the Constituency Development Fund (CDF) have been called out in an auditor general's compliance audit report on how the fund has been used over the past five years.

In the 20-page report now before Parliament for review, Auditor General Pamela Monroe Ellis notes that the municipal corporations and the agencies disbursed a total of $204,689,788 for projects but did not provide the CDF project monitoring unit with the necessary reports.

The Clarendon municipal corporation disbursed $45,280,113, the largest sum of the councils involved, followed by the Manchester municipal corporation which disbursed $42,989,115. The rural agricultural development authority (RADA) disbursed the bulk of funds among the agencies — $36,134,068 — followed by the now defunct National Energy Solutions Limited, which disbursed $$5,600,000. The other municipal corporations named are: Trelawny, $11,048,875; St Ann, $16,803,499; St Catherine, $19,950,111; Portmore, $8,166,521; and St James, $7,717,535. The report also said Sports Development Foundation disbursed $2,000,000, National Solid Waste Management Authority, $5,500,00, and Jamaica Cultural Development Commission, $3,500,000.

The auditor general said her team uncovered in its investigations a lack of objective criteria and documented guidelines to ensure that projects were administered in a transparent and equitable manner.

The report pointed to instances where 21 beneficiaries received a total of $2,465,900 to offset educational expenses at private institutions. In one example cited, a family — where the father was employed to the constituency office of a former Member of Parliament (MP) — received over $1 million in assistance, according to the probe.

Another family that got financial assistance totalling $92,000 had a child employed to the CDF Project Management Unit, the report said.

The document also outlined several other cases of payments made from the CDF on behalf of connected parties, including payments to university to offset the cost of a bachelors degree on behalf of a relative of an MP.

According to the audit, among 47 of the 63 constituencies, a total of $85,393,938 was disbursed in excess of the approved budget for some of the years between 2015/16 and 2019/20.

In addition, 16 projects valuing $26,977,503 were delayed during the period — 11 of them administered by the National Works Agency. The rest consist of one for the Social Development Commission, three for the Clarendon Municipal Corporation and one for its St Mary counterpart. The auditor general attributes the delay to a breakdown in the CDF Project Management Unit's monitoring function.

The government auditors said that while the team did not identify any specific case of fraud, the audit revealed that the Office of the Prime Minister (OPM) did not have an effective risk management system or fraud prevention plan in place to prevent, detect and respond effectively to fraud risks as required by the Financial Management Regulations.

They said there was also an elevated risk of exploitation and misuse of funds in relation to educational development projects as benefits provided under these projects were not administered in keeping with any established objective criteria or documented guidelines.

The CDF, which falls under the OPM, was set up in 2008 to give MPs the financial resources needed to carry out approved social and economic programmes within their constituencies. Each MP receives an annual allocation of $20 million. In March Prime Minister Andrew Holness announced that it would be increased by $2 million to be used exclusively for COVID-19 interventions.

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