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Opposition calls on PCJ head to give account of stewardship

BY ALPHEA SAUNDERS
Senior staff reporter
saundersa@jamaicaobserver.com

Thursday, December 13, 2018

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OPPOSITION members of the Public Accounts Committee (PAC) have suggested that the chairman of Petrojam's parent company, Petroleum Corporation of Jamaica (PCJ), should be asked to provide the parliamentary body with an account of his stewardship.

The suggestion was made by member Peter Bunting, in light of challenges outlined to the PAC on Tuesday, about the breakdown in the audit reporting relationship between the State oil refinery and the PCJ.

Bunting argued that the board of the PCJ has escaped much of the attention placed on the just-published report by the auditor general on Petrojam and the PCJ, despite the report having pointed to deficiencies on the part of the parent company in its oversight responsibility.

The committee reviewed the findings of the report on the operations and management of both State entities with senior executives of the PCJ, Petrojam and Auditor General Pamela Monroe Ellis.

In her presentation to the committee, group internal auditor for the PCJ, Ashlyn Malcolm, pointed to a significant gap in the reporting relationship between Petrojam and the PCJ.

“We are responsible for all the entities within the group… Petrojam has an internal auditor, and so even though there is an internal auditor, we are supposed to be looking at areas within Petrojam… We have had some challenges, certainly within the last year, in terms of completing audits at Petrojam… We have tried to commission an audit, for example, on procurement... in terms of initiating the audits, we have to go through the head of the entity to start an audit. We started it and then we were not allowed to complete [it] because the external auditors were there…” Malcolm explained.

She said the PCJ was not satisfied with that explanation.

Responding to questions from committee member Morais Guy as to whether the PCJ was actually prevented from conducting an audit, Malcolm said: “I would not explicitly say prevented, because we had meetings to discuss it… I would say we were not given the opportunity to complete the audit. We tried, we followed up.”

The group internal auditor, however, insisted that while there were issues with the reporting relationship, Petrojam did have “audit coverage”.

“There is an auditor there; there is audit coverage there, and so the auditor would do audits and report to the board. For PCJ, we provide a second level and even though some of the audits were not finished, there was coverage on the ground in terms of the auditor there at Petrojam,” she explained.

At the same time, she told the PAC that as group internal auditor she was not involved with those audits, and that the reports from Petrojam's internal audits were not forwarded to the PCJ.

Malcolm stressed that the PCJ does provide oversight, but that there had been a shift in the dynamics when Petrojam employed an internal auditor.

“What changed was that a couple years ago Petrojam employed an internal auditor… That auditor does not report to the PCJ and even though we have tried to have collaboration, there is an independence there in terms of reporting for the auditor. Getting the auditor to report to us has not happened. In recent times, there have been more discussions, and the new board has mandated more [of a] reporting relationship,” she stated.

Committee Chairman Mark Golding said this arrangement was “manifestly inadequate, and probably intentionally so”, but also argued that the PCJ was derelict in its duties to ensure that it reviews the internal audits conducted by Petrojam.

“It was incumbent on the PCJ board, the parent board of the group, to ensure that the internal audit function was effective and robust, and protected the taxpayers of this country, and they were derelict in their duties in not ensuring that the reporting arrangement was such that you, as group internal auditor, would always receive (and) have a mandate to review, interrogate and satisfy yourself as to the adequacy of the work and reports on audits done in the operating entities under your watch,” he said.

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