The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Auditor General has called for “a full investigation” into “a deliberate attempt to defraud the Government” of $36,000 by a Post Office employee in Mayaguana.

The Government’s financial watchdog, in a report following a 16-month audit of Mayaguana’s local government district through April 2018, zeroed in on advances that were made over a five-month period between October 2017 to February 2018 that were not recorded.

The advances, all made to a local government officer attached to the Post Office, were made during months when revenue exceeded payments. As a result, the Auditor General concluded in a report tabled in the House of Assembly that there was “no need for obtaining the extra funds other than to defraud The Bahamas government”.

Noting that the officer would not account for the advances in the financials submitted to Mayaguana’s island administrator, the Auditor General found: “During the course of our examination we observed a number of cash advances given to a local government officer assigned to the Post Office.

“Based on our review, we noted that the advances were not posted in the deposit fund cash book. We obtained copies of Blue ‘G’s’ with the officer’s signature affixed evidencing receipt. Additionally, we noted that all advances totalling $35,939 were received in the months that revenue totals exceeded payments.

“As a result, we could not determine the reason for the officer obtaining funds. It was further noted that the officer would remit the accounts to the administrator without accounting for the advances.”

The near-$36,000 sum was advanced via a series of eight transactions, ranging in value from $2,789 to $9,750. The Auditor General recommended that “a full investigation be launched by local government as there appears to have been a deliberate attempt to defraud The Bahamas’ government”.

The report said requests for advances and additional funds needed to be “justified” and documented to enhance the payment process, and boost transparency and accountability, as well as preventing fraud and theft. It also called for all advances to be recorded and signed-off by the island administrator to create the necessary audit trail.

Identifying other irregularities, the Auditor General queried why the contractor hired to repair the Mail Boat dock at Betsy Bay received the full $11,000 contract amount on the same day, in two separate payments and just three weeks after work started, when disbursement was supposed to be staggered and depend on progress.

“We noted that the company signed an agreement on March 1, 2018, and work was scheduled to begin on March 2, 2018,” the Auditor General’s report said: “The contract price was $11,000.

“The first stage payment of $3,900 was to be given to the contractor after half of the concrete base was poured. The final payment was $7,100... We observed that both payment vouchers were paid on March 23, 2018.”

The report added that copies of the contractor’s current Business Licence and Tax Compliance Certificate (TCC) were not attached to the payment documents, as required by current government procedures.

“In an effort to enhance efficiency, accountability and transparency, and to provide an audit trail, we recommend that an explanation be provided for the full payment of $11,000 on the same date,” the Auditor General urged.

His team also carried out a physical inspection of Maygauana’s hurricane relief supplies on May, 2018, which found there was no log recording who received materials and when. The report highlighted a potential “conflict of interest” as some building materials had been purchased from a government employee, while local government staff had been given cash to make purchases from New Providence.

“Further, it was noted that an excessive amount of supplies were purchased from local residents, although identical items were previously provided through a company in New Providence (cements, mesh wire, fibres and lumber) for the hurricane restoration programme,” the Auditor General found.

“Cash payments to employees to purchase supplies should not be allowed. Payment should be made to the company from whom supplies were purchased. An explanation should be given as to the reason for purchase of cement etc from an employee of central government.”

Summing up his findings, the Auditor General concluded: “In our opinion, public funds were disbursed in some instances without regard for economy and efficiency. Internal controls need to be strengthened for the efficiency of the operation.

“Cashbooks were not properly maintained. Payment vouchers were continuous to subsequent months, and carried and brought forward balances were not indicated in the cash books. We noted negative balances should be highly discouraged in the expenditure authorised register, which was not fully explained.”