The Tribune

By NEIL HARTNELL

and RASHAD ROLLE

THE Auditor General has warned of an “alarming amount of alleged theft” at the Post Office, with at least one of its practices branded “a breeding ground for improprieties”.

The audit of the Government’s 2013-2014 accounts portrays the Post Office as riddled with deficiencies, prompting the Auditor General, Terrance Bastian, to raise the possibility of bringing in police to investigate.

The Auditor General’s report, which was tabled in the House of Assembly yesterday, also called for the Post Office to be restructured and “immediate actions” taken where there is evidence of theft by staff.

The flaws and weaknesses identified by the Auditor General and his staff include The Postmaster’s bank account at Bank of the Bahamas in Freeport, which “continues to be unreconciled’’.

Funds deposited and disbursed from this account were regularly sent to Nassau via cheque, regardless of whether it was in surplus or overdrawn, a practice the Auditor General said required “explanation”.

He added: “It is our recommendation that this bank account is suspended until it is properly reconciled; its current state is a breeding ground for improprieties.”

The report also detailed at least two cases where money was either missing or “misappropriated” - almost $64,000 unaccounted for in Ragged Island and $1,259 “borrowed” by a cashier at the Cable Beach Post Office.

“The Postmaster General, along with the appropriate staff, should seek to minimise the alarming amount of alleged misappropriations which appear to be occurring within the Post Office,” the Auditor General concluded. “Where the elements of theft can be proven, these matters should be turned over to the Royal Bahamas Police Force for prosecution.

“The idea of transferring these employees from one department to another should be discontinued. The department must move towards ensuring that Government and the public funds are protected. Based on our findings, it appears that the Post Office Department is in need of restructuring. Where there is evidence of misappropriation by staff members, immediate actions should be taken to remedy the exorbitant loss of revenue.”

The Auditor General and his team were provided with documents to support $159,919 in Money Orders being issued from the Ragged Island Post Office. This included Money Order changes not paid into the Post Office, but the audit revealed that based on the documents provided, some $63,914 “was not brought to account”.

The Auditor General said that the former Ragged Island cashier, when interviewed, admitted that while she was in Ragged Island, she had misappropriated a “large” amount of funds. This was done via the remittance of Money Orders sent throughout the Bahamas without any funds first being collected before issuance, the report said. The cashier had not followed “established accounting procedures”.

“The interview with the former postal officer showed that she had received initial instructions from the senior clerk, who relayed certain instructions that Money Orders should be remitted in her name. Once these Money Orders were cashed, the amount was to be forwarded to the senior clerk’s persona account at the Royal Bank of Canada or the Bank of the Bahamas,” the Auditor General said.

“We noted that the total amount of telegraph Money Orders received or remitted by the individual for the period under review amounted to $329,287. We could not verify that the funds were first received before the Money Orders were processed.”

A further review of “this unusual practice” was necessary, the Auditor General said, “to ensure that this was not a pattern to allegedly defraud the Government. A further review was carried out and, by all indications, it showed that this practice appeared to have occurred before.”

The Auditor General called for a major training of Post Office staff throughout the Bahamas as well as the establishment of an internal control section.

He again decried a lack of accountability by unnamed public officials, saying: “Public offices are not being held accountable for their actions, which results in loss or wastage of government funds.”

Although he found many areas of the government’s finances to be satisfactory, he said obtaining access to audit information and documents remained difficult in some government departments and ministries.

He pointed frequently to errors of varying degrees of seriousness that affected several departments and ministries, including the Ministry of Financial Services and Investments (where the “expenditure function was … not in full compliance with government accounting procedures manual”), the Ministry of Foreign Affairs and Immigration (which was “over budget on total expenditures due in part to overseas missions”), and the Customs Department (where numerous audits confirmed that incorrect rates of duty were applied in “many instances”).

Mr Bastian again declined to certify the final accounts of the government as being representative of the “true and fair view of the state of affairs for the year ended June 30, 2014,” arguing that internal control weaknesses concerning revenue and expenditure are such that he could not attest to the completeness and fairness of the “Cash and Bank Balances”.

For more details, see Business story HERE