Ministry's oversight of Petrojam could be improved, says auditor general

BY BALFORD HENRY
Senior staff reporter
balfordh@jamaicaobserver.com

Thursday, December 06, 2018

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AUDITOR General Pamela Monroe Ellis says that the level of oversight of Petrojam by the Ministry of Science, Energy and Technology (MSET) could be improved.

“It was not evident that the portfolio ministry was active in monitoring and overseeing PCJ's (Petroleum Corporation of Jamaica) operations. Although PCJ consistently submitted the required board minutes and other specified reports to MSET, the ministry did not demonstrate that attention was given to these documents,” Monroe Ellis said in the report on her department's review of the Petroleum Corporation of Jamaica and a comprehensive audit of Petrojam Limited.

“Principle 15 of the Corporate Governance Framework states: The permanent secretaries, as chief advisors to the ministers, are required to monitor performance against expected results, manage risks and advise/inform the minister accordingly on public bodies which operate within the portfolio responsibility of the ministry,” Monroe Ellis reported.

“They also ensure coordination among public bodies within the ministry's portfolio, which enhances policy coherence. They should know what is happening in the public bodies in order to assess whether the strategic objectives of the ministry are being met through the public bodies,” she said.

“We recognise that Petrojam's board functions are independent of PCJ's board, however, we would expect PCJ, as a parent company, to have mechanisms in place to remain informed of the operations of Petrojam and to implement intervention measures where necessary,” she added.

She said that, in support of this view, was the fact that Petrojam submitted its minutes and other specified documents to PCJ.

“This submission is in keeping with good governance practices. We also reviewed PCJ's board minutes for the last three years, 2015-16 to 2017-18. Whereas we saw discussions about aspects of Petrojam's activities among board members, there was no evidence of in-depth deliberations, resulting decisions arising from these discussion points,” she said.

“In addition, PCJ is represented on Petrojam's board, however, we found no evidence that the representatives provided formal reports to PCJ's board, as a means of monitoring Petrojam's performance,” she added.

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