The good, bad, and the ugly (January 5, 2014)

All aspects of Jamaica’s public sector performance were laid bare in a set of reports issued last week. It was good that Jamaica’s Auditor General (AG), Pamela Monroe Ellis, took it to a swathe of government and public sector agencies in her reports for 2012/13. It was bad that so many public institutions seem to operate in disregard of their basic undertakings. It was ugly that some of the breaches are egregious and fit in with the worst impressions that Jamaicans have of their public institutions.MonroeEllisM20121129NG

She gave the Administrator General’s Department (AGD) a failing grade: while the AGD implemented a project in 2009 to reduce the number of backlog cases, over the four-year period, 2009 to May 2013, the department was only able to close 1,075, or 19 per cent, of the case files.

She questioned government procurement practices. Her department’s audits identified breaches of the Government’s prescribed rules for the procurement of goods and services, costing approximately J$24 million in the case of one entity. She also reported that failure, by several entities, to comply with the Government’s financial rules continued to result in inadequate control over stores, furniture and equipment, the custody of blank cheques, the preparation and payment of salaries and the purchase of petrol, thus undermining the objective of safeguarding Government’s resources.

The report paints a picture of a free-for-all at the Jamaica Customs Agency (JCA). Customs officers are reported as arbitrarily applying values and duties to imported items. It points to the absence of valid price-reference data for most imported products and a uniform research methodology for the valuations done by Customs officers, but were based on pricing-reference information maintained by individual officers, with copies of supplier invoices, catalogues, and prices from Internet sources, which they use to value imports. Auditors found that price-reference files maintained by Customs officers contained invoices that were outdated by up to 360 days, an occurrence that is in contravention of the Customs Act.

The auditor general is concerned about the exorbitant amount of money Jamaica Urban Transit Company (JUTC)  has been paying to repair and maintain its Volvo buses. The company was forced to seek expert advice to do the repairs because it had no maintenance manuals for the buses. In addition, the company needs a V-CAD diagnostic tool, which is critical in detecting the problems. JUTC managing director, Colin Campbell, said the issue could be cleared up later this year, as the company has now acquired the manuals for all its maintenance departments, and only needs the equipment and the expertise to do the repairs. The AG also found that the JUTC does not have a system in place to track the operational efficiency of its fleet of buses. The absence of such a system prevented JUTC from assessing, for example, the operational cost per vehicle. She said that between 2008 and June 2013, JUTC spent J$331.7 million on expert guidance for the repair and maintenance of its Volvo buses, which constitute 66 per cent of its fleet.

The Ministry of Finance and Planning’s failure to reconcile information on both Jamaica Debt Exchange (JDX) and National Debt Exchange (NDX) investments could derail the Accountant General’s efforts to identify errors in both transactions. Differences of J$129.2 billion and US$109.4 million between the accounting records maintained at the ministry, and those maintained at the Accountant General. This would impair the Accountant General’s ability to prepare and present reliable statements on the public debt, and that these omissions would contribute to inaccurate reports, which might adversely affect the Government’s strategic decisions. She noted also that failure to maintain proper and accurate records also constitutes a breach of Section 24A of the Financial Administration and Audit Act.