THE government body responsible for monitoring the performance of public audit committees says, despite some improvements, the system is still grappling with inefficiencies that could erode that progress and risk breaches of the Financial Administration and Audit (FAA) Act.

The concern was raised in a recently tabled annual report from the Audit Commission for the 2014/15 financial year, which echoes many of the same concerns that were highlighted in its report for the previous fiscal period.

The commission was set up by the Government of Jamaica in 2005 first as an independent body to monitor and support the performance of some 31 audit committees against the appropriate regulation. Then it was later incorporated in 2009 as a statutory body under the FAA Act, and in July 2011 was reconstituted with six members appointed by the governor general.

Among the major concerns raised by the commission are “significant” delays in obtaining responses from management, and implementing audit recommendations, which “will result in repeated breaches and waste of Government resources”.

“…This is an area therefore that needs to be immediately addressed by the accounting officers and senior management in order to reduce risk exposure and avoid significant financial implications for the entity,” the report stated.

According to the report, 57 per cent of ministries, departments and agencies had outstanding financial statements for 2014/15: “It was reported that the ministries/agencies were tardy in presenting their annual financial statements to the internal auditors for verification as stipulated in the FAA Act regulations.,” it outlined.

The commission also cited lack of enforcement sanctions to ensure accountability, pointing out that this has caused weak internal control systems that have led to non-compliance and breaches by most public bodies.

Furthermore, it was found that the manual processes used by some public bodies are not only tedious but make it easy for fraud and misappropriation to take place. The commission insists that appropriate information technology systems must be set up to reduce these breaches.

The report pointed to the “grave challenges” four internal audit units experienced because of inadequate staffing. “This impacted the units’ ability to provide appropriate audit coverage to the entity’s risk exposure and vulnerability,” the commission said, again noting examples such as the Child Development Agency, which has operations islandwide but only one internal auditor, as well as the Ministry of Foreign Affairs, which operates numerous resident diplomatic missions and consular posts across the world, but functions with just one internal auditor.

— Alphea Saunders