THE chief accountable officer in the Ministry of Labour and Social Security (MLSS) found herself under sustained fire yesterday as the Public Accounts Committee (PAC) sought to get to the bottom of the reasons for the ministry's non-response to 60 systematic weaknesses identified by internal auditors over several years.
This issue and others were flagged in the auditor general's annual report on the financial transactions of the Government for the 2019-20 financial year. The report was tabled in Parliament on January 12.
According to the report, the weaknesses identified in the ministry's operations were significant and went as far back as March 2017.
“As part of good governance practices, management should consider the work of internal audit as an important tool that provides independent assurance that an organisation's risk management, governance and internal control processes are operating effectively. However, the repetitive findings from the internal audit reviews and MLSS's apparent non-responsiveness in addressing the internal control deficiencies, suggest management's lack of commitment in establishing and maintaining effective internal controls to help safeguard assets and further achieve its objectives,” the report said.
Auditor General Pamela Monroe Ellis said the management's silence on the findings of the internal audit is worrying, as this unresponsiveness was also raised in a 2016 report by the Auditor General's Department on the National Insurance Scheme, in which it noted that 27 issues raised from as far back as 2011 were not addressed.
Permanent secretary in the ministry, Collette Roberts Risden explained to the PAC that the failure to respond should not be interpreted as no action being been taken by management to address the issues.
“I want to assure that 60 outstanding responses does not mean that over the years line managers have not been responding to audits...I use internal audits as a management tool to help me to understand, in many instances, the weaknesses in a particular area – so sometimes the line manager may not have provided individual responses but we have addressed [it] through changing procedures, changing personnel, and training people. So I take real exception to the Parliament and the people thinking that I, as permanent secretary, do not take internal audit [as] important,” she stated.
But committee members pointed to the absence of a paper trail to evidence any moves that have been made to rectify the weaknesses presented in the Auditor General's Department report.
“In the absence of documentation which shows a response, the only conclusion that this committee could draw is that there is a culture of non-responsiveness,” PAC Chairman Julian Robinson argued. “What needs to be done is a clear path of improvement to show that where these issues have been raised, documentation [exists] to say they have been resolved.”
The auditor general also said the ministry flouted budget guidelines by not obtaining the requisite approval for the reallocation of $36.36 million to facilitate excess expenditure — including compensation — and the reallocation of another $40.4 million. The ministry also failed to submit the quarterly reports on the reallocations authorised by the accounting officer, to the financial secretary.
The permanent secretary attributed the breach to the ministry's appropriations account not being current at the time and the need, for example, to compensate staff appropriately.
“This is something we are not proud of [but] there was an issue in terms of where staff were classified...this is one of the reasons the ministry needs to have current appropriation accounts that tell you exactly where the expenditures are taking place – it's not that the ministry wants to operate in violation of the guidelines. Staff had been employed to the ministry and were being paid in the incorrect cost centre; should we have continued to pay them incorrectly, or should we have sent them home?” she asked, pointing out that the ministry has made significant attempts to bring the appropriation accounts up to date.
The permanent secretary said the state of affairs at the ministry were inherited but she was not casting blame, as the systems could be strengthened by engaging a compliance officer for the office of the permanent secretary. She also advised that an internal audit register will be implemented to log and monitor issues.
According to the permanent secretary, some action has been taken in response to breaches, including suspensions without pay, demotions, and near-firings by way of non-renewal of contracts.