The Public Accounts Committee continued its public assessment of the Annual Auditor General reports on Wednesday. Again, the representatives from the Opposition – that is the Chair the Hon. Julius Espat and the Hon. Rodwell Ferguson were absent and so the Hon. John Saldivar was presided over the meeting at Pro Tem Chair. We spoke with Julius Espat regarding the nonattendance of him and his colleague, but we’ll have that for you a bit later. In the morning’s session, the committee, joined by member the Hon. Patrick Faber reviewed the report for April 2008 to March 2009. The Pro-Tem Chair summed up the meeting for the press.
Hon. John Saldivar- Pro Tem of Public Accounts Committee
“Well, we certainly we have not gotten into yet any of the particular instances that the Auditor General had investigated, but from a general perspective, what we have gathered so far, is that there are systems breakdown, certainly in terms of how the records of public accounts are kept. I, certainly knew that there was an important role for the Public Accounts Committee to play in the past and even now, and these hearings are simply amplifying the role of the Public Accounts Committee, and so, moving forward, I believe that that role will be fulfilled.”
As mentioned by the Pro Tem Chair, the assessment revealed several discrepancies in the information gathering system and the Office of the Accountant General – we’re talking about monies in the sum of a couple hundred thousand to millions. Summoned as witness was the former Auditor General Edmund Zuniga. He testified that his office, on numerous occasions, brought these inconsistencies to the Office of the Accountant General, but for the most part, he never received a response. In addition, if viewers can recall, at Monday’s meeting, the former Auditor General was unable to give opinion on financial statements simply because the relative correspondents were not provided to him by the Accountant General. On that note and today’s proceedings, members the Hon. Michael Finnegan and Patrick Faber raised the question of the jurisdiction and duties of the Office of the Auditor General – which goes well beyond awaiting response or financial statements from the Accountant General. The Office of the Auditor General is required to summon just about any Ministry personnel for further investigation, where missing links may lie. Other issues raised included frustration caused by the Office of the Auditor General not having the authority to convene statutory bodies such as the Central Bank of Belize.
In addition, member Patrick Faber raised the point of the witnesses not being provided with the respective documents being discussed in the meetings and so as in the case of the former AG, much of his response was by memory. Faber requested to the Pro Tem Chair that these files be made available to witnesses.
According to the Auditor General’s report 2008-2009 that was being discussed today, a block of funds titled the “Suspense Accounts” were not adequately accounted for. The Suspense account appeared in 2005 and held some 280 million dollars. Both Dorothy Bradley and Anita Eck, former Accountant generals, tried to explain how the account appeared and remains in operation even to this day.
“Initially, when I went at the treasury as Accountant General, we had a lot of entries to do with Smart Stream. Broad cover balanceswasn’t there, no reconciliation for the bank accounts, for Example, Central Bank accounts were not being reconciled. We had to start up an opening balance, so, we attended some training in Barbados and I had talked to the Accountant General there, and she told me to get…she had the same problem, and I asked her how you fix a problem like this, being government is on a cash basis? She says, open a suspense account and everything you find prior to the year when Smart Stream went online, put it in that account, and then eventually when you find your entries and you start do your journal, the suspense will eventually cleared. So, most of these items is like broad forward balance from years before. One year it went up, then it went down because if we use the suspense account to put in things as I said, that’s what [un]cleared. That continues today. It contains other entries but you’d see the entries go in and out. It’s quite in time. It shouldn’t be. It needs a proper reconciliation quite frankly…one that was never done from one side.”
Hon. Patrick Faber, then asked,
The Accountant General’s assistant gave a direct answer.
“Frankly at the time, I would say, no, simply because we were in the mood of cleaning up, clearing out, trying to find the right place to find where to tip up the proper accounts, so, at that time I would say, no.”
The afternoon session also saw the appearance of Current Commissioner of Income Tax, Kent Claire taking the stand. Among other things, Mr Clare was asked to clarify the business tax arrears for 31.8 million dollars owing to government from 3 financial institutions. Kent Clare said that while two of the banks have made attempts to rectify their owings, the Belize Bank is going back to court.
“The third bank that appears clear that accounts for ninety-add percent of this total…there is some history here, and this is resultant of the bank taking a position that they were supposed to pay so much in business tax. The Tax Department taking a position that, in fact, this should have been your Business Tax (The Settlement Deed and the Amendment to the Settlement Deed). Without going into too much details because this matter is before the courts, the Commissioner has now indicated that we are intent on collecting this as a result of the recent CCJ ruling, and an action has been filed in the court against us: Action No.483 of 2013 asking for an injunction against my office from collecting, but it’s still being pursued as collectible revenue for the Government and people of Belize”.
The PAC hearings will continue on October 30th.