The Tribune

By TANEKA THOMPSON

Tribune News Editor

tmthompson@tribunemedia.net

AUDITOR General Terrance Bastian has criticised the government’s Urban Renewal 2.0 plan, finding that the programme’s internal controls are “weak”, insufficient and “can lead to abuse of government funds”.

The auditor general’s report into Urban Renewal’s accounting procedures and internal controls, which included a secondary report into the initiative’s Small Homes Repair programme, found a litany of deficiencies.

Among other issues, the auditor reported that contractors cleared down overgrown lots without the prior approval of the Urban Renewal Commission or submission to the government’s Tender Board.

According to the report, contractors were paid more than $400,000 from September 2013 to October 2014 to clear overgrown lots.

“In some instances contractors indicated that their member of Parliament or a senior official in the Ministry of National Security authorised the works.”

The report notes that this is an “extreme risk” warranting immediate attention and implementation of a response procedure.

“While reviewing the files presented (for overgrown lot clearance), we noted that works were carried out without the commission’s prior approval and submission to the government’s Tender Board,” the report says.

The report found that for the specified time period, payments for the clearing of overgrown lots totalled $412,470.

The bulk of this figure, $342,230, was paid to three different contractors over this period. One contractor received $132,500, another received $108,750 and the third was paid $100,980.

In its recommendations, the auditor said this “deficiency” in Urban Renewal’s internal controls, due to the fact that there are no documented procedures for lot clearance, “can lead to abuse of government funds.”

“Clearly defined policies should be implemented to establish governance and responsibilities/roles within the respective departments/agencies,” the report adds.

“There should be criteria to select properties and identification of persons who are authorised to make selection.”

The report also recommends that the Urban Renewal Commission comply with the Treasury’s mandate that the government’s Tenders Board approve all government contracts over $50,000.

Other weaknesses

The auditors found that $66,000 worth of grants were issued by the Urban Renewal Foundation to seven organisations last year to assist with projects, however these recipients did not account for the funds they received.

The largest single grant, $30,000, was given to one group in May 2014. Another group received $10,000 in April 2014.

The report recommends that Urban Renewal ensure that grant recipients comply with the requirements of accounting for the money they receive.

The report also found that there were instances that Urban Renewal documentation was “not adequately” maintained and invoices or subsistence reports “were not always on file.”

Although nearly $13,973.55 was spent on travel within and outside of the country from September 2013 to September 2014, the auditors found that the URC did not keep a travel register.

“Adequate documentation should be kept for all transactions in order to facilitate the audit trail and to reduce opportunities for misrepresentation of the financial records,” the report says.

The report said Urban Renewal has nine urban centres and one computer centre. From August 2013 to September 2014, $183,550 was paid for rent for these facilities. However the report found that all but one of the centres had expired lease agreements but monthly payments for rent continued in the absence of a new lease.

“We further noted that the accounting officer periodically enquired on the status of the new leases,” the report says. “At the time of the exit conference, this matter remained unresolved.”

In response, the URC said the Ministry of Public Service is responsible for accommodations and the rectifying the outstanding lease agreements.

In one instance it was found that in January 2014, the landlord for one urban centre authorised the commission to issue rent payments in her daughter-in-law’s name.

Last August, the auditor found that the landlord was dead.

“Payments have ceased to (the daughter-in-law). At the time of the exit conference, management advised that they were addressing this situation,” the report says.

The audit also notes that while a draft bill for the creation of the Urban Renewal Authority is under review at the Office of the Attorney General, the Urban Renewal Commission is presently operating without a legal framework to govern its structure.

The programme also has no standard operating procedures.

The auditor recommended that management create a written policy and procedure manual for Urban Renewal and suggested that a legal framework for the plan be put in place.

According to the report, the URC said that the minister of works and urban development plans to table the draft bill in the House of Assembly this year.

The audit was carried out on a sample basis from the period of July 1, 2012 to September 30, 2014. It included a general review of the programme’s accounting procedures and internal controls.

In light of these deficiencies highlighted, the auditor general has recommended, among other things, that an independent body be established to manage the programme with clearly defined roles; implement an efficient tracking system for its initiatives; and establish standardised operational policies and procedures.