Director general of the Office of Disaster Preparedness and Emergency Management (ODPEM) Commander Alvin Gayle was on Tuesday unable to explain why a financial services institution
(FSI) was allowed to hold onto Hurricane Melissa donations for up to 45 days when there was no formal agreement in place that would allow this to happen. All the funds have since been received by ODPEM and the arrangement is now being revisited.

The revelation was made as the Public Accounts Committee (PAC) examined the auditor general’s report into the financial management of cash donations received following the Category 5 storm. The issue arose during the committee’s examination of one of the report findings, which noted that donated funds had been retained by the FSI without a formal agreement governing the retention arrangement. The report found that while a merchant agreement existed between ODPEM and the institution processing online donations through the Government’s Support Jamaica platform, there was no formal agreement specifically addressing the retention of funds. MPs expressed concern that the FSI had proposed retaining a significant portion of donations despite there being no documented arrangement setting out how much could be withheld or for how long.

PAC Chairman Julian Robinson sought an update from Gayle on the status of the arrangement, asking where discussions stood regarding formalising the agreement.

“I think we should be able to conquer this issue in just under a month,” Gayle responded, adding that the funds which had prompted the Auditor General’s concern had since been lodged into ODPEM’s accounts and that discussions were continuing on the outstanding issues.

The discussion prompted Member of Parliament for Hanover Western Heatha Miller-Bennett to seek clarification on whether a formal agreement had since been executed with the financial services institution.

In response, Gayle drew a distinction between the agreement governing the processing of donations and the issue before the committee.

Heatha Miller-Bennett, Member of Parliament for Hanover Western, addresses Tuesday’s meeting of Parliament’s Public Accounts Committee at Gordon House.

“There was always a formal agreement with the FSI. There was never a formal arrangement concerning the retention of funds,” he clarified.

He said negotiations were now focused on that specific aspect and could result in amendments to the existing merchant agreement if necessary.

Pressed further by Miller-Bennett, Gayle confirmed that the existing agreement contained no clause prescribing how much money the institution could retain or for what period in relation to potential chargebacks.

The committee’s attention then turned to what Member of Parliament for Manchester Southern Peter Bunting described as an original proposal for the institution to retain 30 per cent of all donations for 45 days.

Bunting questioned the rationale behind such a proposal, arguing that advances in electronic banking made lengthy retention periods difficult to justify.

“I am a little puzzled at this original proposed 45-day time frame to retain 30 per cent of all donations. What is the logic of that? I mean, in the old days, you used to have to wait for checks to clear and so on. But these are all predominantly electronic transactions, which might have at most a one-day delay. Why was there proposed a 45-day time frame to retain 30 per cent of all donations? I am trying to understand the logic for that,” he asked.

Gayle told the committee he could not explain the reasoning behind the proposal because it had been communicated to ODPEM’s previous finance officer.

Commander Alvin Gayle, director general of the Office of Disaster Preparedness and Emergency Management (ODPEM), addresses the Public Accounts Committee during its meeting at Gordon House on Tuesday.

“I can’t recall that they would have provided the explicit reasons behind it. I could go down the road of some assumptions around it, but I’d probably want not to,” he responded.

Asked what arrangement currently governs the retention of funds, Gayle made it clear that none existed.

“There is currently no agreement around that matter. Operationally, based on our discussions, we have suspended that matter until we come to some formal agreement,” he added.

Bunting then questioned what would happen if another major disaster occurred before the issue was resolved.

Gayle replied that under the current arrangements ODPEM would receive the funds, prompting Robinson to seek confirmation that the proposed 45-day retention of 30 per cent was no longer in effect.

“No, Chair, this is not in effect,” Gayle responded, again confirming there was no agreement governing the retention of funds.

Julian Robinson, chairman of Parliament’s Public Accounts Committee and Member of Parliament for St Andrew South Eastern, speaks during the committee’s meeting at Gordon House on Tuesday.x

Robinson said the committee expected ODPEM to conduct a review of the market before entering any future arrangement with the financial services institution.

He instructed the agency to report back after assessing what other providers offered and to outline whatever agreement was ultimately reached.

“I understand doing something in an emergency but certainly reflecting on this, this is not beneficial to ODPEM, the Government, or the people of Jamaica, or the donors for any institution to have a hold of 30 per cent of your funds for 45 days. In this environment, I can’t see any justification for that whatsoever,” he said.

Miller-Bennett also turned her attention to another finding in the Auditor General’s report, noting that although the proposal called for 30 per cent of donations to be retained for 45 days, that money remained with the financial services provider for an additional 83 days. She questioned why ODPEM had failed to ensure the funds were released sooner when they could have been used to assist Jamaicans affected by Hurricane Melissa.

In his response, Gayle acknowledged that there were shortcomings in ODPEM’s oversight of the process.

“The explanation regards to what would have been an admission to oversight in the matter and the necessary steps have been put in place to ensure that we are accurately tracking the funds to the extent that we now have all those funds in our accounts. Changes have been made in the department to cause us to have significantly more oversight in these particular matters,” he said.