Report of the Auditor General of the Republic of Trinidad & Tobago on the Public Accounts of Trinidad & Tobago for the Financial Year Ended 30 th

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3 Report of the Auditor General of the Republic of Trinidad & Tobago on the Public Accounts of Trinidad & Tobago for the Financial Year Ended 30 th September, 2013

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5 TABLE OF CONTENTS Page No. AUDITOR S REPORT 1 CHAPTER 1 GENERAL MATTERS 7 CHAPTER 2 ACCOUNTS OF ACCOUNTING OFFICERS 23 CHAPTER 3 ACCOUNTS OF RECEIVERS OF REVENUE 67 CHAPTER 4 FUNDS & ACCOUNTS OF ADMINISTERING OFFICERS 81 CHAPTER 5 INTERNAL AUDIT FUNCTION IN GOVERNMENT MINISTRIES/DEPARTMENTS 99 CHAPTER 6 ACCOUNTS OF THE TREASURY 107 TREASURY STATEMENTS 131 Auditor General s Report

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7 Auditor s Report Auditor General s Report 1

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9 AUDITOR S REPORT REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF TRINIDAD AND TOBAGO ON THE PUBLIC ACCOUNTS OF TRINIDAD AND TOBAGO FOR THE FINANCIAL YEAR ENDED 30 TH SEPTEMBER, 2013 REPORT ON THE FINANCIAL STATEMENTS Financial Statements of the Public Accounts of Trinidad and Tobago for the financial year ended 30 th September, 2013 which were received from the Treasury, Accounting Officers, Receivers of Revenue and Administering Officers have been audited. RESPONSIBILITY OF THE TREASURY, ACCOUNTING OFFICERS, RECEIVERS OF REVENUE AND ADMINISTERING OFFICERS 2. The Treasury, Accounting Officers, Receivers of Revenue and Administering Officers respectively are responsible for the preparation and fair presentation of these Financial Statements. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. AUDITOR S RESPONSIBILITY 3. The Auditor General s responsibility is to audit and report on these Financial Statements in accordance with section 116 (2) and (4) of the Constitution of the Republic of Trinidad and Tobago and section 25 (1) of the Exchequer and Audit Act, Chapter 69:01. The examination was conducted in accordance with auditing standards which require that ethical requirements be complied with and that the audit be planned and performed to obtain reasonable assurance about whether the Financial Statements are free from material misstatement. 4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the overall presentation of the financial statement in accordance with financial directives. Auditor General s Report 3

10 5. It is my view that the audit evidence obtained is sufficient and appropriate to provide a basis for the opinion expressed at paragraph 15 of this Report. APPROPRIATION ACCOUNTS 6. In accordance with section 24 (1) (b) of the Exchequer and Audit Act, Chapter 69:01, Accounting Officers were required to submit Appropriation Accounts for the financial year ended 30 th September, 2013 by 31 st January, Appropriation Accounts were not received from 5 Accounting Officers by this deadline. Details are given at paragraph 2.3 of Chapter 2 of this Report. 8. The examination of records and documents revealed that in many instances there was non-compliance with Financial Instructions, Financial Regulations and other financial directives. Some comments pertinent to the examination of the Appropriation Accounts and the supporting records and documents have been included at Chapter 2 under the respective Heads of Expenditure. STATEMENTS OF RECEIPTS AND DISBURSEMENTS 9. Receivers of Revenue were required to submit Statements of Receipts and Disbursements in respect of the financial year ended 30 th September, 2013 by 31 st January, 2014 in accordance with section 24 (1) (c) of the Exchequer and Audit Act, Chapter 69: Statements of Receipts and Disbursements were not received by 31 st January, 2014 from 10 Receivers of Revenue. Details are given at paragraph 3.6 of Chapter 3 of this Report. 11. Some comments pertinent to the examination of the Statements of Receipts and Disbursements and the supporting records are also given at Chapter 3. ACCOUNTS OF ADMINISTERING OFFICERS 12. Administering Officers were required to submit Financial Statements in respect of the financial year ended 30 th September, 2013 by 31 st January, 2014 in accordance with section 24 (2) (a) and (b) of the Exchequer and Audit Act, Chapter 69: Financial Statements were not received from 11 Administering Officers by this date. Details are given at paragraph 4.6 and 4.7 of Chapter 4 to this Report. 14. Comments arising from the examination of the Accounts of Administering Officers have also been included at Chapter 4. Auditor General s Report 4

11 OPINION 15. In my opinion, the Financial Statements referred to at paragraph one above present fairly, in all material respects, the financial assets and liabilities of the Central Government at 30 th September, 2013 and the revenue and expenditure of Government Ministries and Departments for the financial year ended 30 th September, 2013 in accordance with the cash basis of accounting. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS PAYMENTS OUT OF PUBLIC MONEYS TO MEMBERS OF PARLIAMENT 16. Section 25 (2) of the Exchequer and Audit Act, Chapter 69:01 requires the Auditor General to set out in his annual report all payments made out of public moneys to a member of each House of Parliament (other than the salary and any allowances and any pension paid to him as specified in that section). 17. In this connection, the following information is provided: Name Amount Service Elton Prescott S.C. $44, Advisory Committee on the Power of Pardon Christlyn Moore $30, Legal Advice to the Attorney General OTHER MATTERS EXCHEQUER ACCOUNT ($29,349,393,502.01) 18. The Exchequer Account is the bank account for the Consolidated Fund. The Exchequer Account was overdrawn by ($29,349,393,502.01) which was an increase of ($5,868,120,774.35) or 25.21% when compared to the previous year s figure of ($23,481,272,727.66). This amount was shown as a deduction from Assets on the Consolidated Statement of Assets and Liabilities but should have been reflected under Liabilities in accordance with accounting principles. LOANS FROM GENERAL REVENUE $1,909,122, A number of loans in this category totalling $1,747,350, are not being serviced by borrowers. The collectability of these balances could not be determined. 20. In 2002, Cabinet agreed for principal and accumulated interest amounts totalling $2.7 billion with respect to pre-1989 loans to the Port Authority of Trinidad and Tobago to be converted to equity. However, the principal amounts totalling $1,101,726, continue to be included as Loans from General Revenue. 21. Details about this balance are included at paragraph 6.13 of Chapter 6 of this document. Auditor General s Report 5

12 CONTINGENT LIABILITIES - $49,087,677, According to International Accounting Standard 37: Provisions, Contingent Liabilities and Contingent Assets, a Contingent Liability is defined as a possible obligation depending on whether some uncertain future event occurs. It was noted that certain obligations totalling $395,010, relating to Build, Operate, Lease and Transfer (BOLT) arrangements were included under Contingent Liabilities. Under these arrangements, the Government is obligated to make lease payments. Consequently, it did not appear that these arrangements should be classified as Contingent Liabilities. SUBMISSION OF REPORT 23. This Report is being submitted to the Speaker of the House of Representatives, the President of the Senate and the Minister of Finance and the Economy in accordance with the requirements of section 116 (4) of the Constitution of the Republic of Trinidad and Tobago. SHARMAN OTTLEY 29 th April, 2014 AUDITOR GENERAL Auditor General s Report 6

13 CHAPTER 1 GENERAL MATTERS Auditor General s Report 7

14 Auditor General s Report 8

15 CHAPTER 1 GENERAL MATTERS THE PUBLIC ACCOUNTS LEGAL BASIS 1.1 Section 24 of the Exchequer and Audit Act, Chapter 69:01 (the Act) provides for the submission of the various financial statements comprising the Public Accounts of the Republic of Trinidad and Tobago 1 to be submitted to the Auditor General within 4 months of the financial year-end of 30 th September. These are: Section 24(1)(a) Section 24(1)(b) Section 24(1)(c) Section 24(2) Accounts of the Treasury Appropriation Accounts of Accounting Officers Statements of Receipts and Disbursements of Receivers of Revenue Accounts of Administering Officers of Funds or Trusts. 1.2 Section 3 of the Act states: 3. The Minister shall, subject to the Constitution and this Act, have the management of the Consolidated Fund and the supervision, control and direction of all matters relating to the financial affairs of the State which are not by law assigned to any other Minister. In this respect the Minister of Finance is responsible for instituting all accounting policies, procedures and processes as well as the system of internal controls. Further, the Permanent Secretary in the Ministry of Finance or an officer in the Treasury authorised by him, is entitled to inspect all records and documents. 1.3 Under section 4 (3) of the Act the Treasury is required to so superintend the expenditure of public moneys as to ensure that proper arrangements for accounting to the House for such expenditure are made. According to the Act, the Treasury means the Minister responsible for Finance and includes such officer or officers in the Ministry of Finance as may be deputed by the Minister to exercise powers and to perform duties under the Act. 1 Hereinafter referred to as the Public Accounts Auditor General s Report 9

16 Chapter 1 General Matters CASH BASIS OF ACCOUNTING 1.4 The Public Accounts of the Republic of Trinidad and Tobago are presented on the cash basis of accounting. This means that transactions are recognized when cash is actually received or paid. However, certain statements relating to the Public Debt are included for disclosure of present obligations of Government. 1.5 The Comptroller of Accounts issues annual Circulars which provide relevant guidance with respect to the preparation and submission of financial statements. For the year ended 30 th September, 2013, the following refer: Circular No. 07 dated September 03, 2013 to All Accounting Officers No. 08 dated September 02, 2013 to Receivers of Revenue No. 09 dated September 02, 2013 to All Accounting Officers No. 10 dated September 04, 2013 to Administering Officers Subject Submission of Financial Statements in respect of Deposit Accounts for the financial year ended September 30, 2013 Submission of Statements of Receipts and Disbursements for the financial year ended September 30, 2013 Submission of Appropriation Accounts for the financial year ended September 30, 2013 Submission of Financial Statements and other related documents Re: Unemployment, Infrastructure Development, NUGFW Training, Government Assistance for Tuition Expenses (GATE), Green, CARICOM Trade Support and CARICOM Petroleum Funds for the financial year ended September 30, 2013 ACCOUNTING STANDARDS 1.6 Detailed guidance and standards exist with respect to internal controls and maintenance of accounting records in the form of: Exchequer and Audit Act, Chapter 69:01 and the Financial Regulations 2 made thereunder Financial Instructions, (issued by the Minister with responsibility for Finance) Financial Regulations (Stores) (issued by the Minister with responsibility for Finance) Circulars issued by the Minister with responsibility for Finance. These Regulations, Instructions and Circulars are intended to safeguard State property and to ensure the collection and use of State resources in the public interest. 2 Hereinafter referred to as Financial Regulations 3 Hereinafter referred to as Financial Instructions Auditor General s Report 10

17 Chapter 1 General Matters 1.7 While these are quite robust, they have not been updated with changes in accounting standards and practices for almost five decades. Consideration should be given to updating local financial directives to conform to current best practice. In this regard, the International Federation of Accountants (IFAC) 4 issues International Public Sector Accounting Standards (IPSAS) which are considered to be best practice guides and are being adopted by governments world-wide in an effort to increase transparency and accountability and so facilitate better governance. Procurement 1.8 With respect to public procurement, the Central Tenders Board Act, Chapter 71:91 legislates for standard procedures and rules. In establishing the legal framework and requirements for public procurement, this legislation underscores the principles of good governance, namely accountability, transparency, integrity and value for money and spans the entire process from invitations to tender to the awarding of contracts. Conscientious application of these procedures by public bodies would contribute significantly to ensuring that procurement decisions are made in the public s best interest. AUDIT OF THE PUBLIC ACCOUNTS CONSTITUTIONAL & LEGAL BASIS FOR AUDIT 1.9 The Auditor General s mandate for the audit of the Public Accounts and the right of access to all documents as well as the independence of the Office are enshrined in the Constitution of the Republic of Trinidad and Tobago as follows: S116. (2) The public accounts of Trinidad and Tobago and of all officers, Courts and authorities of Trinidad and Tobago shall be audited and reported on annually by the Auditor General, and for that purpose the Auditor General or any person authorised by him in that behalf shall have access to all books, records, returns and other documents relating to those accounts. S116. (6) In the exercise of his functions under this Constitution the Auditor General shall not be subject to the direction or control of any other person or authority The Exchequer and Audit Act expands this right of access to include explanations and information as well as access to all State property as follows: 10. (1) In the exercise of his duties under this Act the Auditor General shall be entitled (a) to call upon any officer for any explanations and information which the Auditor General may require in order to enable him to discharge his duties; 4 IFAC is the standard setting body for the accounting profession. Auditor General s Report 11

18 Chapter 1 General Matters (b) to authorise any officer on his behalf to conduct any inquiry, examination or audit, and such officer shall report thereon to the Auditor General; (c) to send for and have the custody of any books, accounts, vouchers or papers under the control of any officer relating to or in any wise concerning the public accounts, and to keep such books, accounts, vouchers or papers for such time as he may require them; 10. (2) In the exercise of his duties under this Act the Auditor General, or any person duly authorised by him in writing, shall have access to all records, books, vouchers, documents, cash, stamps, securities, stores or other State property in the possession of any officer. AUDIT SCOPE 1.11 For the financial year 2013, audit examinations were conducted at various Ministries and Departments of Government. The audit process entailed a review of the system of internal control applicable to the Public Accounts (including, in certain instances, the internal audit function) and examination of subsidiary books and records 5 in order to verify the correctness of amounts shown in the financial statements submitted by Ministries/Departments as well as to determine compliance with legislation and/or financial directives. Sample testing (by both manual and electronic selection) together with physical verification, cash surveys and site visits were employed as considered necessary within the constraints of available human resources. AUDIT FINDINGS 1.12 Where possible, audit results have been discussed with accounting personnel and/or accountable officers (Accounting Officer/Receiver of Revenue/Administering Officer) at Exit Meetings. Findings have been communicated in writing by way of memoranda addressed to the Permanent Secretary of the Ministry or to the Head of the Department The audit revealed numerous instances at various Ministries/Departments where Financial Regulations and Instructions as discussed at paragraph 1.6 continue to be disregarded. A pervasive need was identified for training of staff of Ministries and Departments in accounting regulations and procedures with a view to enhancing accountability and good governance The findings as set forth in Chapters 2 to 4 include examples of weaknesses in the system of internal control, as well as non-compliance with legislative requirements and/or financial directives. Comments also cover lack of proper maintenance of the relevant subsidiary books 5 Subsidiary books and records include documents showing particulars of Financial Management, Human Resource information, Procurement of goods and services and Asset and Stores Management. The integrity of the subsidiary records contributes to the reliability of the Financial Statements presented by the Accounting Officers/Receivers of Revenue/Administering Officers. Auditor General s Report 12

19 Chapter 1 General Matters and records. The state of the Internal Audit function in Ministries and Departments remains a matter of grave concern as in prior years. This issue is covered in Chapter 5. Treasury Statements for accounts managed by the Treasury such as the Exchequer Account, the Public Debt and Loans Receivable are analysed in Chapter 6. NON-SUBMISSION OF INFORMATION REQUESTED OR RESPONSES TO MEMORANDA 1.15 As emphasized in previous years, meaningful response to audit issues raised is a crucial step towards resolving irregularities and internal control weaknesses. It also reflects management s commitment to improving fiscal responsibility and achieving good governance. Documents Not Produced 1.16 As described in more detail in the ensuing chapters, there were numerous instances where documents requested for audit purposes were not produced. This represents a serious breach both of the Auditor General s constitutional and legal right of access to all documents relating to the Public Accounts and of financial and accountability requirements. Financial Instruction 43 states, All vouchers, paid cheques and other relevant documents shall on request for Audit examination be made available to the Auditor General or his nominee. Responses to Memoranda Not Received 1.17 Accounting Officers are required by Financial Regulation 8 (l) to reply promptly and fully to any queries of the Auditor General. Memoranda outlining findings and recommendations have been issued to the Ministries and Departments audited. Requests were made for a response to the matters raised to be submitted within three weeks of the date of issue of the memoranda. Responses from the following entities remained outstanding as at 7 th April, 2014: Head of Expenditure Date of Memorandum President 24 th February 2014 Statutory Authorities' Service Commission 2 nd April 2014 Elections & Boundaries Commission 17 th February 2014 Registration, Recognition & Certification Board 17 th October 2013 Ministry of Finance & the Economy: Comptroller of Accounts 13 th March 2014 Board of Inland Revenue 14 th February 2014 Customs and Excise Division 24 th March 2014 Ministry of the Attorney General 2 nd January th February 2014 Ministry of Legal Affairs 24 th March 2014 Ministry of Food Production 3 rd February th February 2014 Ministry of Education 19 th October 2013 Ministry of Health 13 th March 2014 Auditor General s Report 13

20 Chapter 1 General Matters Head of Expenditure Date of Memorandum Ministry of Labour, Small & Micro Enterprise Development 17 th October 2013 Ministry of Tourism 26 th March 2014 Ministry of Justice 5 th March 2014 Ministry of Foreign Affairs 21 st February 2014 Ministry of the Environment & Water Resources 5 th March 2014 REQUESTS FOR INFORMATION 1.18 Section 10 (1) (a) of the Act entitles the Auditor General: to call upon any officer for any explanations and information which the Auditor General may require in order to enable him to discharge his duties;. Apart from queries during the audit, specific requests for information were sent to Ministries and Departments. These requests are discussed in the ensuing paragraphs. Auditor General s Circular Memorandum No. 1 of 2014 Request for Entity Profiles 1.19 As part of the audit process, certain information is required to assist with the planning of the audit. This information in the form of an Entity Profile was requested via Auditor General s Circular Memorandum No. 1 of 2014 dated 16 th January, 2014 to be submitted by 14 th February, As at 7 th April, 2014, Entity Profile information had not been received from the undermentioned entities: Judiciary Service Commissions Registration Recognition & Certification Board Office of the Prime Minister Tobago House of Assembly Personnel Department Ministry of Finance & the Economy Ministry of Finance & the Economy Customs & Excise Division Ministry of the Attorney General Ministry of Legal Affairs Ministry of Food Production Ministry of Public Administration Ministry of Transport Ministry of Public Utilities Ministry of Energy & Energy Affairs Ministry of Local Government Ministry of Trade, Industry & Investment Ministry of Justice Ministry of Tobago Development Trinidad & Tobago Police Service Ministry of Foreign Affairs Ministry of Gender, Youth & Child Development Ministry of Works & Infrastructure Ministry of the Environment & Water Resources Ministry of Tertiary Education & Skills Training Ministry of Science & Technology Auditor General s Report 14

21 Chapter 1 General Matters Auditor General s Circular Memorandum No. 2 of 2014 Request for Information 1.20 The Auditor General by Circular Memorandum No. 2 of 2014 dated 16 th January, 2014 requested all Permanent Secretaries and Heads of Departments to submit on or before 31 st January, 2014 the following information for the financial year ended 30 th September, i) Outstanding Commitments (Aged Analysis). ii) Particulars of trust and other moneys held. iii) Particulars of all gifts and other donations received from agencies/entities whether monetary or in kind. iv) Particulars of all gifts, tokens and other donations given to agencies/entities/ employees/other individuals within or outside of Trinidad and Tobago whether monetary or in kind and the purpose for which given. v) Particulars of the total number of persons employed in contract positions and the total amount paid to such persons during the financial year. vi) Action taken in respect of the requirements of the Ministry of Finance Circular No. 03 dated 2005 July 29 and Cabinet Minute No. 390 of February 25, 2010 relative to the preparation and submission to the Comptroller of Accounts of the personal information of employees that is required to determine their separation and pension benefits Responses to the information requested by this Circular Memorandum were not received as at 7 th April, 2014 from the following Ministries/Departments: Tax Appeal Board Registration, Recognition & Certification Board Tobago House of Assembly Ministry of Finance and the Economy Comptroller of Accounts Customs and Excise Division Ministry of Food Production Ministry of Education Ministry of Energy & Energy Affairs Ministry of Local Government Ministry of Trade, Industry & Investment Ministry of Tobago Development Ministry of Housing, Land & Marine Affairs Ministry of Foreign Affairs Ministry of Sport Ministry of the Environment & Water Resources Auditor General s Report 15

22 Chapter 1 General Matters Partial responses to the information requested by this Circular Memorandum were received from the Judiciary, Industrial Court, Public Service Appeal Board and the Office of the Prime Minister. Commitments 1.22 Commitments arise where Invoice Orders for goods and services have been issued but the goods have not been received or the services have not been rendered at the end of the financial year and therefore payment has not been effected. From the responses received, the balances of outstanding commitments at the end of the financial year were as follows: Entity Total Commitments $ <30 days $ >30 days but <45 days $ >45 days $ 01 President Auditor General 313, , Industrial Court 59, , , Parliament 205, , , , Public Service Appeal Board 18, , Ministry of Finance & the 514, , , , Economy - Inland Revenue Division 22- Ministry of National Security 48,699, ,173, ,548, ,977, Ministry of the Attorney General 183, , , , Ministry of Legal Affairs 2,366, ,017, , ,236, Ministry of Health 1,365, , , , Ministry of Labour & Small & 184, , , , Micro Enterprise Development 34 Ministry of Transport 233, , , , Ministry of Tourism 41, , Integrity Commission 6, , Environmental Commission 188, , , , Ministry of Public Utilities 196, , , Ministry of the People & Social Development 6,393, ,275, , ,790, Ministry of Community Development 318, , , , Trinidad and Tobago Police Service 14,810, ,516, ,362, ,930, Ministry of Planning & Sustainable Development 692, , , , Ministry of Works & Infrastructure 18,060, ,736, , ,292, Ministry of Communications 142, , Ministry of Tertiary Education and Skills 966, , , National Diversity and Social Integration 184, , , TOTAL 96,145, ,982, ,814, ,348, Auditor General s Report 16

23 Chapter 1 General Matters Trust and Other Moneys Held 1.23 Section 24(2)(b) of the Act provides for any officer administering any trust or other fund or account not established under section 43 of the Act to submit accounts for audit. Responses received indicate that with the exception of amounts totalling $134,244, held by the Judiciary, no such moneys were held by the responding entities Responses on this matter were not received from the following entities: Contract Employment 09 - Tax Appeal Board 11 - Registration, Recognition & Certification Board 13 - Office of the Prime Minister 15 - Tobago House of Assembly 18 - Ministry of Finance & the Economy: - Comptroller of Accounts - Customs and Excise Division 25 - Ministry of Food Production 26 - Ministry of Education 40 - Ministry of Energy & Energy Affairs 42 - Ministry of Local Government 48 - Ministry of Trade, Industry & Investment 59 - Ministry of Tobago Development 61 - Ministry of Housing, Land & Marine Affairs 65 - Ministry of Foreign Affairs 66 - Ministry of Gender, Youth & Child Development 68 - Ministry of Sport 69 Ministry of Works and Infrastructure 71 - Ministry of the Environment & Water Resources 1.25 Replies were received from 28 Permanent Secretaries/Heads of Departments indicating that amounts totalling $415,836, were paid to 3,450 persons employed in contract positions during the financial year ended 30 th September, Information is given at Table 1 which follows The audit highlighted that duly executed contracts were not produced for several of these officers and as such the various terms of engagement could not be verified. Paragraph 2.19 of Chapter 2 refers. Auditor General s Report 17

24 Chapter 1 General Matters Table 1: Responses Persons Employed in Contract Positions Ministry/Department No. of Persons Total Paid ($) 01 - President 3 339, Industrial Court 9 804, Parliament ,063, Service Commissions 25 3,393, Statutory Authorities' Service Commission 2 209, Elections & Boundaries Commission 9 1,167, Personnel Department 26 3,485, Ministry of Finance & the Economy ,814, Ministry of National Security ,944, Ministry of Legal Affairs ,311, Ministry of Health ,992, Ministry of Labour & Small & Micro Enterprise Development ,090, Ministry of Public Administration ,402, Ministry of Transport 25 2,606, Ministry of Tourism 23 2,772, Integrity Commission 33 5,844, Ministry of Public Utilities 85 8,020, Ministry of Justice 86 14,110, Ministry of Tobago Development ,991, Ministry of Community Development 141 9,436, Ministry of the Arts & Multiculturalism 125 2,261, Trinidad & Tobago Police Service ,849, Ministry of Planning & Sustainable Development 71 7,177, Ministry of Communications 5 560, Ministry of Tertiary Education & Skills Training ,848, Ministry of Science & Technology 50 3,409, Ministry of National Diversity & Social Integration 31 1,439, Equal Opportunities Tribunal , TOTAL 3, ,836, Auditor General s Report 18

25 Chapter 1 General Matters Pension and Leave Records 1.27 Responses were received from 31 Permanent Secretaries/Heads of Departments which indicated that action was being taken to have Pension and Leave records updated and submitted in a timely manner to the Comptroller of Accounts as required by financial directives. However, at many Ministries and Departments it was found that delays in submitting completed records still occurred. A summary of responses received is included at Table 2. Table 2: Status of Pension and Leave Records Ministry/Department Response 01 - President Submitted annually 04 - Industrial Court P & L officer designated to deal with matters 06 - Service Commissions Updated 07 - Statutory Authorities' Service Commission Being updated 08 - Elections & Boundaries Commission Updated for 46 officers 12 - Public Service Appeal Board Submitted annually 13 - Office of the Prime Minister Not up to date 17 - Personnel Department Updated for 35 officers 18 - Ministry of Finance & the Economy - Board of Response not related to the request Inland Revenue 22 - Ministry of National Security: Cadet Force, General Being updated Administration, Fire Service, Immigration 23 - Ministry of the Attorney General Unit set up 24 - Ministry of Legal Affairs Being updated 25 - Ministry of Food Production Not up to date 26 - Ministry of Education 131 of 519 files outstanding for 2013 retirees 28 - Ministry of Health Updated annually 30 - Ministry of Labour, Small & Micro Enterprise Updated for 96 officers Development 31 - Ministry of Public Administration Being updated 34 - Ministry of Transport 9 submitted to COA, 2 outstanding 35 - Ministry of Tourism Being updated 37 - Integrity Commission Being updated 39 - Ministry of Public Utilities Priority given to officers due to retire in Ministry of Justice Updated for 145 officers 59 - Ministry of Tobago Development Dedicated unit set up 62 - Ministry of Community Development Being updated 63 - Ministry of the Arts & Multiculturalism Up to date 64 - Trinidad & Tobago Police Service Updated 67 - Ministry of Planning & Sustainable Development P & L Unit being set up 70 - Ministry of Communications New Ministry 72 - Ministry of Tertiary Education & Skills Training Submitted annually to COA 73 - Ministry of Science & Technology Being updated 74 - Ministry of National Diversity & Social Integration New Ministry 75 - Equal Opportunities Tribunal Nil Auditor General s Report 19

26 Chapter 1 General Matters 1.28 Responses were not received from the following entities: 03 - Judiciary 05 - Parliament 09 - Tax Appeal Board 11 - Registration, Recognition & Certification Board 15 - Tobago House of Assembly 18 - Ministry of Finance & the Economy - Comptroller of Accounts - Customs and Excise Division 22 - Ministry of National Security - Defence Force 38 - Environmental Commission 40 - Ministry of Energy & Energy Affairs 42 - Ministry of Local Government 48 - Ministry of Trade, Industry & Investment 56 - Ministry of the People & Social Development 61 - Ministry of Housing, Land & Marine Affairs 65 - Ministry of Foreign Affairs 66 - Ministry of Gender, Youth & Child Development 68 - Ministry of Sport 69 - Ministry of Works & Infrastructure 71 - Ministry of the Environment & Water Resources Auditor General s Report 20

27 Chapter 1 General Matters Auditor General s Circular No. 4 of 2014 Payments made out of Public Moneys to Members of Parliament 1.29 Section 25 (2) of the Act states: The Auditor General shall set out in his annual report all payments made out of public moneys to a member of each House of Parliament (other than the salary and any allowances paid to him as a Minister, President or Deputy President of the Senate, Speaker or Deputy Speaker of the House, Parliamentary Secretary or as a member, and any pension paid to such member) by stating the name of the member receiving the payment, the total amount which he has received and the service or services in respect of which the payment was made Information necessary to fulfil this requirement was requested from Ministries and Departments by Auditor General s Circular Memorandum No. 4 of 2014 dated 16 th January, 2014 to be submitted by 14 th February, As at 7 th April, 2014, the necessary returns were not received from the under-mentioned entities: 01 - President 08 Elections and Boundaries Commission 11 Registration recognition and Certification Board 13 - Office of the Prime Minister 15 Tobago House of Assembly 18 Ministry of Finance and the Economy - Comptroller of Accounts 35 - Ministry of Tourism 59 Ministry of Tobago Development 60 Ministry of Planning and Sustainable Development 63 Ministry of the Arts and Multiculturalism 68 - Ministry of Sport 71 - Ministry of the Environment & Water Resources Realignment of Ministerial Portfolios 1.31 During the financial year 2013 there was a realignment of Ministerial Portfolios with effect from 6 th September 2013 as follows. The Ministry of Housing, Land and Marine Affairs was renamed Ministry of Housing and Urban Development. A new entity, the Ministry of Land and Marine Affairs was created. The expenditure for this new Ministry for the period of 24 days between the restructuring and the year end was considered by the Comptroller of Accounts to be immaterial and was included in the Appropriation Account of the Ministry of Housing, Land and Marine Affairs. Auditor General s Report 21

28 Auditor General s Report 22

29 CHAPTER 2 ACCOUNTS OF ACCOUNTING OFFICERS Auditor General s Report 23

30 Auditor General s Report 24

31 CHAPTER 2 EXPENDITURE: ACCOUNTS OF ACCOUNTING OFFICERS ACCOUNTING FOR EXPENDITURE SUBMISSION OF APPROPRIATION ACCOUNTS 2.1 Under section 4 (3) of the Act, the Treasury is required to so superintend the expenditure of public moneys as to ensure that proper arrangements for accounting to the House for such expenditure are made. The Minister of Finance appoints Accounting Officers who are charged with the duty of accounting for the use of public moneys. 2.2 In accordance with section 24 (1) of the Act, Accounting Officers are required to submit Appropriation Accounts to the Auditor General within four months of the financial year end of 30 th September. 2.3 With respect to the financial year ended 30 th September, 2013, Appropriation Accounts were required to be submitted by 31 st January, Appropriation Accounts in respect of 46 Heads of Expenditure were received in the Auditor General s Department by 31 st January, Appropriation Accounts were received after the statutory deadline from the 5 Ministries/Departments shown below: Ministry/Department Date Received Actual Expenditure $ 03 Judiciary 27 th February, ,850, Tobago House of Assembly 24 th February, ,583,492, Ministry of Local Government 3 rd February, ,134,750, Ministry of Tobago Development 24 th February, ,469, Ministry of Gender, Youth & Child Development 4 th February, ,312, According to the Treasury s Statement of Expenditure (TS 22 and TS 23) Auditor General s Report 25

32 Chapter 2 Expenditure: Accounts of Accounting Officers ERRORS IN/OMISSIONS FROM APPROPRIATION ACCOUNTS 2.4 Comptroller of Accounts Circular No. 09 dated September 02, 2013 provided detailed instructions with respect to the preparation and submission of Appropriation Accounts for the year ended 30 th September, Nevertheless, typographical and other errors as well as omissions continue to be evident in certain Appropriation Accounts submitted for audit. In addition, a number of statements submitted did not bear original signatures of the Accounting Officers as required by financial directives. A number of entities also submitted amended pages of the Appropriation Accounts after 31 st January, Errors/omissions noted have been referred to the respective entities and have no material effect on the truth and fairness of the Public Accounts except as otherwise stated in this Report. 2.6 Accounting Officers for the following entities are reminded of their responsibility to ensure that the statements submitted are thoroughly checked for errors and omissions before submission to the Auditor General by the statutory deadline: 03 Judiciary 05 Parliament 06 Service Commissions Department 07 Statutory Authorities Service Commission 13 Office of the Prime Minister 18 Ministry of Finance & the Economy 18 Ministry of Finance & the Economy Customs & Excise Division 18 Ministry of Finance & the Economy Treasury Division 20 Pensions & Gratuities (Ministry of Finance & the Economy) 23 Ministry of the Attorney General 26 - Ministry of Education 34 Ministry of Transport 58 Ministry of the People & Social Development 59 Ministry of Tobago Development 61 Ministry of Housing, Land & Marine Affairs 66 Ministry of Gender, Youth & Child Development 70 Ministry of Communications 71 Ministry of the Environment & Water Resources 73 Ministry of Tertiary Education & Skills Training 74 Ministry of National Diversity & Social Integration Auditor General s Report 26

33 Chapter 2 Expenditure: Accounts of Accounting Officers EXPENDITURE VARIANCES 2.7 During the financial year 2013, expenditure was incurred under 51 Heads of Expenditure as detailed on the Statement of Expenditure included with the Treasury Statements 7. TS 22 and TS 23 refer. Overall variances as well as prior year comparatives are as follows: Total Expenditure Authorized 2013 $ 2012 $ Increase/ (Decrease) $ 64,797,737, ,634,910, ,162,826, Total Actual Expenditure 59,197,978, ,702,231, ,495,746, Unspent Allocations 5,599,759, ,035,496, (435,736,404.24) Expenditure More Than Allocation Unspent Allocations 23,729, ,816, (79,087,420.37) 2.8 Financial Regulation 34 makes Accounting Officers responsible for ensuring that public funds are spent to the best advantage. Unspent allocations may result from a number of factors such as resource constraints, efficiency/economy savings, over-provision, changes in work plans or failure to implement planned activities. Chart 1 which follows presents Unspent Allocations greater than $100 million for the financial year Expenditure More Than Allocation 2.9 According to the Statement of Expenditure, the Tobago House of Assembly is shown as having exceeded the approved estimates by $23,729, The Treasury Statements are reproduced at the end of Chapter 6 of this document. Auditor General s Report 27

34 Chapter 2 Expenditure: Accounts of Accounting Officers 26 - Ministry of Education $307.5m Chart 1: Unspent Allocations by Head of Expenditure > $100m 18 - Ministry of Finance and the Economy $164m 58 - Ministry of Justice $165m 61 - Ministry of Housing, Land and Marine Affairs $ Trinidad and Tobago Police Service $369m 71 - Ministry of the Environment and Water Resources $141.3m 69 - Ministry of Works and Infrastructure $131.6m 22 - Ministry of National Security $686m 25 - Ministry of Food Production $129m 42 - Ministry of Local Government $121m 20 - Pensions and Gratuities $103m 19 - Charges on Account of the Public Debt $1880m PARLIAMENTARY APPROVAL - TOTAL EXPENDITURE AUTHORIZED 2.10 Total expenditure authorizations for the financial year 2013 comprised Appropriations and Direct Charges as shown below $ 2012 $ Increase/ (Decrease) Appropriations 54,092,773, ,242,011, % Direct Charges 10,704,964, ,392,899, (6.04%) TOTAL 64,797,737, ,634,910, % Details are given at paragraphs 6.20 and 6.20 of Chapter 6 of this Report. Auditor General s Report 28

35 Chapter 2 Expenditure: Accounts of Accounting Officers TOTAL EXPENDITURE INCURRED - $59,197,978, Expenditure by Classification 2.11 A break-down by Sub-Head of total actual expenditure for the financial year 2013 is shown at Chart 2. Chart 2: Analysis of Actual Expenditure by Classification 04 - Current Transfers and Subsidies 42% 06 - Current Transfers to Statutory Boards and Similar Bodies 13% 07 - Debt Servicing 10% 09 - Development Programme 5% 03 - Minor Equipment Purchases 4% 02 - Goods and Services 11% 01 - Personnel Expenditure 15% Current Transfers and Subsidies 2.12 The major portion (42%) of Actual Expenditure for the financial year 2013 comprised Current Transfers and Subsidies. Certain amounts under this classification are highlighted below. Reference in this Report $Bn Chapter Paragraphs Shortfall in Subsidy (Petroleum Products) to Deposit to Infrastructure Development Fund to 4.48 Pension Payments to 2.86 Deposit to the Heritage and Stabilisation Fund Auditor General s Report 29

36 Chapter 2 Expenditure: Accounts of Accounting Officers Increases from Prior Year 2.13 Increases in Total Expenditure greater than 50% from the prior year are shown below: Head of Expenditure 2013 $ $000 Increase $000 Increase % 73 - Ministry of Science and Technology 262,510 50, , Ministry of the Environment & Water Resources 2,851, ,617 2,202, Ministry of Communications 60,837 18,550 42, Ministry of Tertiary Education & Skills Training 2,610, ,960 1,727, Ministry of National Diversity & Social Integration 52,568 18,275 34, Ministry of Energy & Energy Affairs 4,587,224 1,605,727 2,981, Ministry of Justice 693, , , Ministry of Tobago Development 40,469 24,766 15, Personnel Department 5,520,000 37,112 18, THE AUDIT OF EXPENDITURE PERVASIVE ISSUES 2.14 The paragraphs which follow include comments relating to areas where improvements are needed across several Ministries/Departments. Inventory Control 2.15 Safeguarding of State property to ensure efficient and effective service delivery is the main aim of inventory control. Proper maintenance of inventory records and tagging of items in accordance with Financial Regulations (Stores) are crucial elements of this function. Weaknesses in inventory control are raised each year by the Auditor General through management letters and in the Auditor General s Report on the Public Accounts. However, breaches continue to be noted at a number of Ministries/Departments. Relevant comments under individual Heads of Expenditure are included later in this Chapter In view of the above, it is imperative that a concerted effort be made by Accounting Officers to ensure that State property is safeguarded at all locations by the application of the provisions of the Financial Regulations (Stores) Inventory may arise from expenditure under various categories such as Development Programme, Infrastructure Development Fund (IDF) and Recurrent. During the period 2009 to 2013, purchases of Minor Equipment under Recurrent Expenditure totalled $2.2 billion as shown below. Auditor General s Report 30

37 Chapter 2 Expenditure: Accounts of Accounting Officers Financial Year $ ,109, ,401, ,751, ,075, ,109, TOTAL 2,213,446, Lease Agreements 2.18 Signed lease agreements were not produced for audit for certain properties for which rental payments were made. Relevant details are shown below. Head of Expenditure Ministry/Department Making the Payments Number of Locations Total Monthly Rentals 8 $ 23 Ministry of the Attorney General 5 961, Environmental Commission 1 106,777.50/ reduced to 66, Ministry of Tobago Development 4 596, Contract Agreements 2.19 Contract agreements are necessary to ensure that goods/services are delivered to required specifications and that remedies for sub-standard performance exist and can be enforced. Financial Regulation 129 (2) also requires the original contract to be attached to the relevant payment voucher when the work to which a contract relates is completed along with a certificate of satisfactory completion of work From the samples selected, signed contracts were not provided for a number of contract payments made. These are summarised below. As a result, it was not possible to determine whether there was compliance with contract terms. 8 Figures inclusive of VAT Auditor General s Report 31

38 Chapter 2 Expenditure: Accounts of Accounting Officers Contracts Amounts Paid Head of Expenditure at Time of Not Seen Audit 9 ($) 13 Office of the Prime Minister 1 1,785, Ministry of Finance & the Economy 7 4,283, Ministry of Education ,837, Ministry of Health 1 2,225, Ministry of Transport 1 5,651, Ministry of Energy & Energy Affairs 11 2,898, Ministry of Justice 4 1,290, Ministry of Foreign Affairs 2 2,212, Ministry of Sport 5 1,041, Ministry of Works & Infrastructure 5 13,393, Contract Employment 2.21 As in the prior year, the examination of contract employment revealed that in many instances, terms and conditions approved by the Chief Personnel Officer (CPO) and/or signed contracts were not seen. In response to the observations raised, Accounting Officers have indicated that matters are with the Personnel Department for action. Breaches noted and related monthly emoluments are presented in the Table below. Ministry/Department Sample Size CPO Terms & Conditions Not Seen Contract Not Seen Total Monthly Emoluments 10 $ Ministry of Finance & the Economy: - Inland Revenue Division , Ministry of Food Production , Ministry of Energy & Energy Affairs , Ministry of Labour and Small and Micro Enterprise Development , Ministry of Tobago Development , Ministry of Foreign Affairs , Ministry of Sport $154, These relate to payments noted at the interim audit visit in respect of which contracts were not seen. 10 Relates to Gross Salaries & Allowances with respect to contracts not seen. Auditor General s Report 32

39 Chapter 2 Expenditure: Accounts of Accounting Officers Storage of Payment Vouchers 2.22 Financial Instruction 34 requires that all payment vouchers be carefully preserved and properly stored in a fire-proof safe or vault. Fire-proof safes or vaults were not seen to be used for storage of payment vouchers at locations of the following entities: Parliament Elections and Boundaries Commission Registration, Recognition and Certification Board Ministry of Finance & the Economy - Inland Revenue Division Ministry of Finance and the Economy - Treasury Division Ministry of Finance and the Economy - Customs and Excise Division Ministry of Labour and Small and Micro Enterprise Development Ministry of Tourism Ministry of Energy and Energy Affairs Ministry of the People and Social Development Ministry of Justice Ministry of Science and Technology Ministry of Planning and Sustainable Development Ministry of Community Development Ministry of the Environment and Water Resources Overpayments 2.23 Overpayments continue to be a major concern since they result in time and other resources being spent on accounting, recovery, reporting and auditing as well as, at times, emotional factors involved in the recovery process Financial Regulation 83 states that Every unauthorised payment and overpayment of salary, pension, allowance, wages or other moneys constitutes a debt which is recoverable in full from the payee Recoveries for the years 2011 to 2013 are shown at Table 3 below. From the analysis, roughly 44.76% of overpayments have been recovered. Table 3: Overpayments versus Recoveries Financial Cases Reported Amounts Year Number Value ($) Recovered ($) ,280 20,370, ,492, ,531 21,465, ,008, ,513 31,140, ,160, Year Total 16,324 72,976, ,662, Auditor General s Report 33

40 Chapter 2 Expenditure: Accounts of Accounting Officers 2.26 Financial Instruction 164 provides guidelines for the preparation of a report on an unauthorized payment or overpayment and for the submission of copies of such report to the Comptroller of Accounts and the Auditor General A comparison of information presented in the Notes to the Appropriation Accounts of Ministries/Departments with the records of the Auditor General s Department revealed that with respect to certain Ministries/Departments reports were not received in the Auditor General s Department in several instances. A number of cases were also noted where the information presented in the Appropriation Accounts differed from that reported to the Auditor General The need for the causes of overpayments to be ascertained and addressed and for controls to be strengthened with a view to minimising the incidence of overpayments is reiterated. Details of instances where figures exceeded $100, are given below. Ministry/Department Note 2 c to the Appropriation Account Reports Received by the Auditor General No. of Cases Amount Discovered $ Amount Recovered $ No. of Cases Amount Discovered $ 03 - Judiciary , , , Parliament , , , Elections & Boundaries Commission , , , Office of the Prime Minister , , , Ministry of Finance & the Economy Comptroller of Accounts ,976, ,808, , Inland Revenue Division , , , Customs & Excise , , Pensions & Gratuities: Defence Force 1 346, , , National Security 6 241, , , Ministry of Transport , , , Treasury Division 5 459, , Ministry of National Security: ,995, ,352, ,162, Ministry of the Attorney General , , , Ministry of Legal Affairs , , , Ministry of Food Production , , , Ministry of Education ,087, ,335, ,165, Ministry of Health 279 1,220, , , Ministry of Public Administration , , , Ministry of Transport , , , Auditor General s Report 34

41 Chapter 2 Expenditure: Accounts of Accounting Officers Ministry/Department Note 2 c to the Appropriation Account Reports Received by the Auditor General No. of Cases Amount Discovered $ Amount Recovered $ No. of Cases Amount Discovered $ 39 - Ministry of Public Utilities , , , Ministry of the People & Social Development 471 1,818, ,095, , Ministry of Justice 81 1,182, , ,197, Trinidad & Tobago Police Service 779 6,457, ,909, ,345, Ministry of Planning & Sustainable Development , , , Ministry of Works & Infrastructure , , , TOTAL 6,513 31,140, ,160, ,699 22,506, Outstanding Commitments 2.29 Commitments represent amounts relating to goods and services that have been ordered but not yet delivered at the end of the financial year and in respect of which payments have not been made. Outstanding Commitments as at 30 th September, 2013 as per Appropriation Accounts totalled $109,772, Differences were noted between the amounts reported as Outstanding Commitments in the Appropriation Accounts of certain entities and the supporting records. Major differences are shown below. Entity Disclosed in Appropriation Account $ Audited Figure $ Difference 11 $ 03 Judiciary 7,755, ,869, (885,787.42) 18 Ministry of Finance & the Economy: - Comptroller of Accounts 4,477, ,424, ,947, Inland Revenue Division 514, , , Ministry of National Security - Regiment 6,958, ,999, , Cadet Force 1,625, ,624, (895.99) - Volunteer Defence Force (Reserves) 462, , (59,100.00) 25 - Ministry of Food Production 2,459, ,968, (491,383.60) 30 - Ministry of Labour & Small and Micro Enterprise Development 111, , , Audited figure more/(less) than Appropriation Account Auditor General s Report 35

42 Chapter 2 Expenditure: Accounts of Accounting Officers Entity Disclosed in Appropriation Account $ Audited Figure $ Difference 11 $ 40 - Ministry of Energy & Energy 557, ,506, , Affairs 42 Ministry of Local Government 3,274, ,299, , Ministry of Justice 970, ,519, ,548, Ministry of Tobago 241, , , Development 61 Ministry of Housing, Land & Marine Affairs 8, , (3,545.00) 63 Ministry of the Arts & Multiculturalism 195, , (2,047.00) 66 Ministry of Gender, Youth and Child Development 71 Ministry of Environment & Water Resources 72 Ministry of Tertiary Education and Skills 74- National Diversity & Social Integration Cases of Theft and Losses Reported 111, , , , , , , , , , , , In accordance with Part XIX of the Financial Regulations, Accounting Officers are required to investigate and report all losses of State assets to the Comptroller of Accounts and the Auditor General. According to reports received in the Auditor General s Department, for the financial year 2013 there were 42 cases of thefts and losses of State property totalling $301, The figure comprised 23 cases each under $5, in value totalling $38, and 19 cases totalling $263,227.61, each in excess of $5, in value as follows: Frauds and Losses Less Than $5, Ministry/Department No. of Cases Amount $ 03-Judiciary 1 4, National Security Education 16 27, Public Administration 2 2, Tourism 1 2, Environment & Water Resources TOTAL 23 38, Auditor General s Report 36

43 Chapter 2 Expenditure: Accounts of Accounting Officers Frauds and Losses More Than $5, Ministry/Department No. of Cases Amount $ 18-Ministry of Finance & the Economy - Customs and Excise 1 30, Food Production 4 126, Education 9 74, Public Administration 1 6, Local Government 1 5, People & Social Development 2 12, Police Service 1 7, Void Cheques TOTAL , The recording, monitoring and administration of void cheques were found to be weak in a number of Ministries/Departments audited. Evidence of publishing of cheques relating to the financial year 2012 which would have become void at 31 st March, 2013 in a daily newspaper and in the Trinidad and Tobago Gazette was not seen in several instances. It was therefore not possible to determine compliance with Ministry of Finance Circular No. 2 of 1994 dated March 18, 1994 on the subject System to void unpresented cheques in the accounting system. INDIVIDUAL AREAS OF CONCERN 2.33 The audit findings recorded in this section focus on individual Heads of Expenditure and the allocations so approved by Parliament in respect of the financial year PRESIDENT Inventory Control 2.34 The Inventory Register provided for audit was not properly maintained in that certain pertinent information was not included. Financial Regulations (Stores) 102 to 104 refer. In addition, Inventory Registers relating to two locations and a Vehicle Register were not produced Items sampled did not bear evidence of tagging as State property in accordance with Financial Regulation (Stores) 55. Expenditure Control 2.36 As reported in the previous year, certain payment vouchers sampled did not bear full particulars to allow for verification of allocation of expenditure. This was contrary to Financial Regulation 76 (1) which states: All vouchers shall contain full particulars of each service so that they may be checked without references to any other document. Further, expenditure could Auditor General s Report 37

44 Chapter 2 Expenditure: Accounts of Accounting Officers not be matched to particular events as estimates and costing records were not seen to be maintained for official functions Commitments were not seen to be recorded in the Vote Book prior to passing vouchers for payment. This was contrary to Minister of Finance Circular No. 23 of 1959 on the subject of Accounting for Commitments Evidence was not seen that quotations were requested for the procurement of goods and services sampled totalling $1,568, contrary to the directives of the Central Tenders Board From the review of a sample of 13 vouchers selected from 570 vouchers, it was noted that expenditure totalling $379, was incorrectly classified under Expenses of the President s Establishment. 03 JUDICIARY Maintenance of Records 2.40 A Register of Contracts as required by Financial Regulation 129 (1) was not produced. As a result, particulars of contracts awarded and amounts outstanding were not established. 04 INDUSTRIAL COURT Inventory Control 2.41 An Inventory Register as required by Financial Regulation (Stores) 102 was not produced for audit. This issue was also reported in the previous year Physical verification of a sample of items purchased revealed no evidence of tagging as Government property in accordance with Financial Regulation (Stores) PARLIAMENT Maintenance of Records 2.43 A Register of Contracts as required by Financial Regulation 129 (1) was not produced. As a result, particulars of contracts awarded and amounts outstanding were not established. 08 ELECTIONS AND BOUNDARIES COMMISSION Expenditure Control 2.44 Funds were not seen to be committed in the Vote Book before vouchers were passed for payment as required by Minister of Finance Circular No. 23 of 1959 on the subject of Auditor General s Report 38

45 Chapter 2 Expenditure: Accounts of Accounting Officers Accounting for Commitments. As a result, compliance with Financial Regulations 66 and 67 was not determined. This was also reported in the prior year. Appropriation Account Authority of Signatory 2.45 The Appropriation Account was signed by an officer for whom the required approval as Accounting Officer was not seen. 11 REGISTRATION, RECOGNITION AND CERTIFICATION BOARD Expenditure Control 2.46 Evidence was not seen that funds were committed in the Vote Book prior to vouchers being passed for payment as required by Minister of Finance Circular No. 23 of 1959 on the subject of Accounting for Commitments. As a result, compliance with Financial Regulations 66 and 67 was not determined Daily preparation of the Abstract of Payments as required by Financial Instruction 31(1) is necessary for effective control of payments. At the audit visit in July, 2013, these documents were seen to be prepared up to April, OFFICE OF THE PRIME MINISTER Expenditure Control 2.48 Four vouchers from a sample of 11 selected for testing under Minor Equipment Purchases Office Equipment did not bear information on cheque date as required by Financial Instruction Financial Instruction 31(1) requires daily preparation of the Abstract of Payments recording each day s cheque payments for control purposes. At the audit visit in September, 2013, these documents were seen to be prepared up to February, 2013 in three instances and up to April, 2013 in another. The Daily Abstract of Payments for expenditure under Fees were seen to be written in pencil in contravention of Financial Instruction 256 (1) for the period May to September, Funds were not seen to be committed in the Vote Book before vouchers totalling $285, were passed for payment as required by Minister of Finance Circular No. 23 of 1959 on the subject of Accounting for Commitments. As a result, compliance with Financial Regulations 66 and 67 was not determined. Auditor General s Report 39

46 Chapter 2 Expenditure: Accounts of Accounting Officers 15 TOBAGO HOUSE OF ASSEMBLY Maintenance of Records 2.51 Total Expenditure of $2,583,492, as shown in the Appropriation Account differed from the figure for Total Expenditure of $2,559,763, according to the Vote Book and the Notification of Expenditure The balances shown in the Vote Book and the Schedule of Accounts for Current Transfers and Subsidies both differed from the figures shown in the Appropriation Account Internal Audit 2.54 Certain Schedules of Accounts were not produced for audit. There was no evidence of internal audit checks on the accounting records examined. 18 MINISTRY OF FINANCE AND THE ECONOMY 2.55 The observations that follow arose from the interim audit conducted at the following 6 Divisions of the Ministry of Finance and the Economy: General Administration, Budget Division, Treasury Division, Investments Division, National Insurance Appeal Board Tribunal and Financial Intelligence Unit. Procurement Control 2.56 From a sample of 211 vouchers examined, evidence was not seen that in 4 Divisions, quotations were obtained for the purchase of items on the open market in 44 instances with a total value of $1,790, This contravenes Financial Regulation (Stores) 31 as well as Central Tenders Board Circular Memorandum CTB: 4/2/6 Vol. 1 dated 26 th July, Contract Registers as required by Financial Regulation 129 (1) for control and information purposes were not produced for 4 Divisions. As a result, it was not possible to determine the contracts awarded. Commitments 2.58 In 258 instances for amounts totalling $950,988.09, funds were not seen to be committed in the Vote Book as required by Minister of Finance Circular No. 23 of 1959 on the subject of Accounting for Commitments to ensure sufficiency of funds before payments were processed. As a result, compliance with Financial Regulations 66 and 67 was not determined. Inventory Control 2.59 Stores records for the control of consumable items as set out in Financial Instruction 247(2) and Chapter 9 of the Financial Regulations (Stores) were not seen at the 4 Divisions where this check was conducted. As a result, balances on hand could not be verified. Auditor General s Report 40

47 Chapter 2 Expenditure: Accounts of Accounting Officers 2.60 An Inventory Register as required by Financial Regulation (Stores) 102 to maintain control of non-expendable items was either not produced or not updated at 5 Divisions. In 4 Divisions, items seen bore no evidence of tagging as Government property in accordance with Financial Regulation (Stores) 55. General Administration Expenditure Control 2.61 During the period reviewed of October 2012 to March 2013, amounts totalling $3,555, were paid to one provider for security services ($1,389,065.05) and for janitorial services ($2,166,496.50). Contract agreements were not seen. These payments also exceeded the Permanent Secretary s authorised expenditure limit of $1,000, The approval of the Central Tenders Board for the provision of these services was not seen From a sample of 15 vouchers selected for Other Contracted Services, 2 vouchers totalling $974, were not supported by original invoices Financial Instruction 108(4) which requires the Accounting Officer to personally countersign vouchers covering transactions affected in previous years was not seen to be followed in 5 instances for payments to one provider totalling $3,357, Treasury Expenditure Control 2.64 Several instances of internal control weaknesses such as incomplete information on payment vouchers and payments in excess of authorised limits were noted from the transactions selected for audit A contract for the provision of services by one provider at the cost of $1,892, was not presented for audit. As a result, the terms and conditions and the authority for an advance payment were not determined A payment voucher for $8,500, was not presented for audit. As a result, the expenditure was not verified. Development Programme 2.67 Documents relating to two projects, namely Networking of the Treasury Building and Refurbishment of the Treasury Building were not produced. Consequently, adherence to terms and conditions could not be determined. Further, expenditure totalling $268, over the period reviewed of January 2013 to April 2013 could not be verified. Auditor General s Report 41

48 Chapter 2 Expenditure: Accounts of Accounting Officers Overpayments Register 2.68 The Overpayment Register necessary to monitor recovery and to determine balances outstanding was not seen to be updated and properly maintained in that pertinent information was not recorded. Appropriation Account 2.69 The figure of $4,477, for total commitments disclosed in Note 2l.i was not in agreement with the audited figure of $85,434, or with the Vote Book figure of $11,844, Further, an amount of $435,787, was seen to be committed under the Interest on Overdraft vote. However, related allocations and releases were not seen to cover this amount. This is in contravention of Financial Regulation 67 which states that: Accounting Officers shall ensure that at all times votes are sufficient to meet all commitments Schedules of Accounts for amounts totalling $217,220, were not produced for examination. Further, a number of differences were noted between figures appearing in the Appropriation Accounts and those in the underlying records. Customs and Excise Division Expenditure Control 2.72 A voucher in the amount of $688, relating to previous year transactions was not countersigned by the Accounting Officer as required by Financial Instruction 108(4) Two cheques dated 25 th September, 2013 and which totalled $795, for the purchase of three motor vehicles were seen on hand during the audit exercise in December The voucher was signed indicating receipt of the vehicles. However, there was no evidence that the vehicles had been received and taken into inventory. There was therefore a breach of Financial Regulation 71(1). In the circumstances these cheques should have been cancelled at the end of the financial year 30 th September, The Daily Abstract was not being updated for use in expenditure control as required by Financial Regulation 8(j). At the time of the audit in December 2013 entries were seen recorded up to July Documents not produced 2.75 The following documents requested for audit purposes were not provided: Vouchers for the months of January 2013 and September 2013 in respect to expenditure totalling $7,950,543.80; 34 vouchers totalling $5,814, from the sample selected for testing; Schedules of Accounts for 5 vouchers totalling $3,921,914.65, and Auditor General s Report 42

49 Chapter 2 Expenditure: Accounts of Accounting Officers Cabinet approval for the execution of the project titled Infrastructure Upgrade of the Container Examination Station (CES) at Port of Spain. The non-production of documents for audit not only breaches Financial Instruction 43 and Financial Regulation 8(l) but denies the Auditor General s legal and constitutional right of access. Inventory Control 2.76 Particulars of Other Minor Equipment purchased at a cost of $1,171, were not recorded in the Inventory Register. As a result, the items could not have been physically verified. Appropriation Account 2.77 A schedule of commitments was not supplied to enable verification of the figure of $981, shown as Outstanding Commitments in Note 2K(I) At Note 2C the Nil balance shown as Overpayment Amounts Recovered differed from the amount of $172, shown in the Overpayments Register PENSIONS AND GRATUITIES Preparation & Pre-Audit 2.79 Regulation 33(2) of the Civil Service Regulations (made under section 28 of the Civil Service Act, Chapter 23:01) outlines the respective roles of the parties responsible for the preparation and checking of retirement benefits as stated below: Permanent Secretaries and Heads of Departments shall ensure that particulars of service and pay of all officers whose retirement is known to be imminent are furnished accurately to the Comptroller (Financial and Accounting Administration) not less than three calendar months before the date on which the officers concerned are due to retire, in order to enable the computation and checking of pensions, retiring allowances and gratuities to be completed by the Comptroller and the Auditor General and submitted for authorisation before the date on which the officer s retirement from the Service is due to take effect. Auditor General s Report 43

50 Chapter 2 Expenditure: Accounts of Accounting Officers Administration of Separation and Pension Benefit Payments 2.80 Separation and Pension Benefits are administered as follows: Ministry/Department Ministry of National Security Persons Covered 2013 Payments $ Officers of the: Fire Division 58,466, Defence Force 127,709,206,.22 Police Service 204,939, Ministry of Transport Port and Railway Workers 25,259, Ministry of Justice Officers of the Prison Service 42,319, Ministry of Finance & the Economy Civil Servants (not covered above), Teachers, Judges, Presidents, Prime Ministers, Daily-Paid Workers and other Public Officials 1,809,075, TOTAL 2,267,768, Benefits of officers of Municipal Corporations and State Enterprises are administered by those entities Calculations are performed by the Comptroller of Accounts and then submitted to the Auditor General for pre-audit before payments are made. Delays are often due to discrepancies in the documents/computations submitted During the year ended 30 th September, 2013, 11,403 files were submitted to the Auditor General for pre-audit. Of these 11,319 were examined and dispatched. Common audit observations/queries related to the following: Monthly Paid Officers and Corporations Computations with respect to averaging principle not in accordance with instructions Incorrect service data, incremental dates or acting rates Arithmetical errors in calculation of Gratuity and Pension Computations not signed by Comptroller of Accounts Pension and Leave records not signed/stamped by Internal Audit and/or responsible officer Information on Birth Certificate not corresponding to that on the Statutory Declaration Missing documents/information such as Noting of Retirement, Option Form, Pension and Leave records with respect to acting and details of vacation leave for three years prior to retirement. Auditor General s Report 44

51 Chapter 2 Expenditure: Accounts of Accounting Officers Daily Paid Officers Original documents not submitted Affidavits dated before issue of relevant electronic birth certificate Records of Service not certified by the Permanent Secretary or Head of Department and/or Internal Audit Daily rates used not in accordance with Collective Agreements. Contracted Officers Vacation Leave taken in excess of that stipulated in approved Terms and Conditions Overpayment of salary Calculation of unutilised leave not in accordance with Chief Personnel Officer s instructions Fidelity clause not completed on Computation Sheet. Fire Services Files for Fire Service officers submitted months after officers retire in contravention of the legal requirement for submission to the Comptroller of Accounts of 6 months before the date of retirement Affidavits dated before issue of relevant electronic birth certificate Differences between information on Affidavit and the relevant birth certificate Submission of tattered/torn Affidavits and birth certificates with missing data Name on Pension and Leave records different from supporting birth certificates and/or Affidavits submitted Incomplete information submitted on Option form Arithmetical errors on computation sheet with respect to calculation of service and/or gratuity payable Concerns have been expressed by public officers with respect to delays in receipt of separation and pension benefits. Ministry of Finance Circular No. 03 dated 2005 July 29 and Cabinet Minute No. 390 of February 25, 2010 require that Ministries/Departments prepare and submit to the Comptroller of Accounts, the personal information of employees that is required to determine, among other things, their separation and pension benefits The Auditor General via Circular Memorandum No. 2 of 2013 requested information on action taken on this exercise. Responses received are summarised at paragraph 1.27 of Chapter 1 of this Report Ministries and Departments should make every effort to ensure that Pension and Leave records of all officers are updated regularly and that Pension and Leave files are thoroughly checked and audited internally before submission to the Comptroller of Accounts. Auditor General s Report 45

52 Chapter 2 Expenditure: Accounts of Accounting Officers Appropriation Account Ministry of Finance and the Economy 2.87 The figure shown as Estimates Financial Year 2013 for Public Officers Gratuities in Section C of the Appropriation Account was shown as $392,951, instead of $393,708,635.00, a difference of $757, The total shown as Variance was understated by the same amount. 22 MINISTRY OF NATIONAL SECURITY Expenditure Control 2.88 Expenditure of $5,992, plus commitments of $5,232, totalling $11,225, exceeded releases of $8,198, by $3,027, with respect to Vehicle Replacement in contravention of Financial Regulation 67. Documents Not Produced 2.89 Twenty-eight vouchers totalling $6,102, from the samples selected were not produced for audit examination. Inventory Control 2.90 An Inventory Register as required by Financial Regulation (Stores) 102 was not produced Further, two items purchased at a cost of $1,624, could not be physically verified as pertinent details were not reflected on the relevant documents. Maintenance of Records 2.92 A Register of Contracts as required by Financial Regulation 129 (1) was not produced. As a result, particulars of contracts awarded and amounts outstanding were not established. 23 MINISTRY OF THE ATTORNEY GENERAL Appropriation Account 2.93 At Note 4 to the Appropriation Account a Nil balance was shown with respect to payment of public monies to Members of Parliament (MP). However, the response to Auditor General s Circular No. 4 dated 16 th January, 2014, stated that legal fees of $30, were paid to one MP. Auditor General s Report 46

53 Chapter 2 Expenditure: Accounts of Accounting Officers 25 MINISTRY OF FOOD PRODUCTION Expenditure Control 2.94 A review of a sample of 15 payments totalling $251, for Materials and Supplies revealed that proper procurement procedures were not followed in that Bonded Contractors were not used where applicable, neither were 3 quotations obtained for open market purchases. Inventory Control 2.95 Inventory Registers at Head Office and at one outstation were not seen to be up to date as required for inventory control. Financial Regulation (Stores) 102 refers Stores Ledgers or consumption records as required by Financial Instruction 247(1) for the control of consumable items were not seen to be maintained at 2 outstations. Vehicles 2.97 Inventory records show that 290 vehicles are owned by the Ministry. However Vehicle Registers necessary to record the existence, location and status of vehicles were not seen to exist either at the Head Office or at 3 of the 11 outstations sampled. Development Programme 2.98 Two amounts of $14, were seen to be paid to one supplier on two different invoices for the same service performed on the same date. Appropriation Account 2.99 A Register of Contracts as required by Financial Regulation 129 (1) was not produced. As a result, the completeness of information relating to contracts not yet completed at Note 2.l ii shown as $946, could not be verified. 26 MINISTRY OF EDUCATION Expenditure Control Other Charges vouchers bore no evidence that availability of funds was checked before payments were processed in accordance with Financial Instruction 3(c) Dates of cheques were not included on vouchers and on Schedules of Accounts as required by Financial Instruction 27 and to allow for a proper audit trail Funds were not seen to be committed before invoice orders were processed at one office. Invoice orders were also not being completed and properly utilised in accordance with financial directives. Auditor General s Report 47

54 Chapter 2 Expenditure: Accounts of Accounting Officers Inventory Control At the time of the interim audit in July 2013, 3 of the 4 Inventory Registers provided at the Head Office were not up to date. In addition, critical records such as an Inventory Register for Minor Equipment and a Stores Ledger for expendable items were not produced Site Visits to 10 Secondary Schools, one district office of the Ministry and one Learning Centre revealed the following weaknesses: Inventory Registers as required by Financial Regulations (Stores) were not produced in 3 instances and those provided for 5 areas were not properly maintained or up to date at the time of the audit visit; Stores records for control of expendable items were not provided in respect of the district office; Inventory items did not carry appropriate markings to identify them as Government property. Financial Regulation (Stores) 55 refers. Internal Audit Evidence of internal audit review was not seen on any of the expenditure vouchers sampled for the period 1 st October, 2012 to 31 st May, Appropriation Account Documents Not Produced The Reconciliation Statement and List of Unpaid Cheques as at 30 th September, 2013 required to verify the information at Note 7 were not provided for audit. 28 MINISTRY OF HEALTH Expenditure Control A review of a sample of 34 payments totalling $135,332, revealed that invoices were not committed in the Vote Book as required by Financial Regulations 66 and 67 to allow for prudent cash management audit. From the sample reviewed, one payment voucher for $1,290, was not provided for Development Programme Hospital Enhancement and Development Programme Documents required to verify the validity of expenditure of $770, for optometry equipment were not produced for audit. Auditor General s Report 48

55 Chapter 2 Expenditure: Accounts of Accounting Officers Inventory Control An Inventory Register as required by Financial Regulation (Stores) 102 for control over State property was not produced During a physical verification exercise, it was noted that 21 items valued at $197, from a sample of 51 items purchased during the year did not bear marks of identification as Government property in accordance with Financial Regulation (Stores) MINISTRY OF LABOUR AND SMALL AND MICRO ENTERPRISE DEVELOPMENT Inventory Control Development Programme Information Communication Technology Implementation Plan for the Ministry of Labour Physical verification of a sample of 22 items purchased revealed no evidence of tagging as Government property in accordance with Financial Regulation (Stores) 55. Inventory records as required by Financial Regulations (Stores) 10(iii) and 102 were also not produced. Expenditure Control At the time of the audit in July 2013, the Daily Abstract of Payments required to be prepared daily under Financial Instruction 31(1) was only seen to be prepared up to April MINISTRY OF TRANSPORT Documents Not Produced Documents to support a payment of $13,000, shown as Contribution towards Deficit on Coastal Steamers were not produced. Overpayments Register The Overpayment Register necessary to monitor recovery and to determine balances outstanding was not seen to be up to date at the time of audit. Development Programme Upgrade of Infrastructure for Perimeter Lighting A formal contract for works valued at $5,651, was not provided for audit purposes. Cleaning of Electrical Power Systems Payments totalling $211, for the Supply and Installation of Emergency Lights were incorrectly charged to this vote. In addition, supporting documents were not provided. Auditor General s Report 49

56 Chapter 2 Expenditure: Accounts of Accounting Officers 35 MINISTRY OF TOURISM Expenditure Control Promotions, Publicity and Printing From the review of a sample of 11 vouchers under this vote evidence of monitoring to ensure that the funds were applied for the purposes approved by Cabinet was not seen with respect to 4 payments totalling $2,225, Payments totalling $191, were also seen to be made from this vote for expenses relating to the operations of the National Academy for the Performing Arts Hotel even though funds were neither provided for nor released to the Ministry for this purpose. Procurement Control A Register of Contracts as required by Financial Regulation 129(1) was not produced for audit. As a result, it was not possible to determine the completeness of contract information supplied. Development Programme Misallocation of Releases From a sample of 4 vouchers selected for verification of monies spent under the project - Establishment of Amerindian Village, Arima, it was noted that 2 vouchers totalling $357, related to the project Establishment of Lifeguard Facilities. Expenditure under the latter project therefore exceeded total releases of $2,000, by $356, This action contravened Financial Regulation 65 (2) and (3) which stipulates that a vote may not be applied to a purpose for which it is not intended and that check staff shall disallow expenditure incorrectly charged MINISTRY OF ENERGY AND ENERGY AFFAIRS Documents Not Produced From the sample selected for testing, 4 payment vouchers totalling $112, were not presented for audit as required by financial directives Returns of Personnel necessary to verify remuneration levels of employees were also not produced. Expenditure Control It was seen that expenditure totalling $1,450, was incurred for the purchase of 3 motor vehicles. However, this expenditure was above the authorised limit of the Accounting Officer and therefore in contravention of section 12(1)(a) of the Central Tenders Board Act. Auditor General s Report 50

57 Chapter 2 Expenditure: Accounts of Accounting Officers Four cheques for amounts totalling $1,729, were seen to be prepared on 30 th September, However, at the time of the audit visit in November 2013, three of these cheques were still on hand. There was also no evidence that relevant items had been received and taken into inventory. This practice is in breach of Financial Regulation 71(1) which specifies that items must have been received and taken on charge before payments are authorised A voucher for the payment of $999, relating to the prior year was not countersigned by the Accounting Officer as required by Financial Instruction 108(4) for control over use of funds. Payments made to this entity in the financial year 2013 including the figure above totalled $1,753, Contracts for the related services provided by the entity were not seen. Current Transfers and Subsidies Shortfall in Subsidy Evidence was not seen that subsidy claims totalling $5,059,817, submitted by 2 companies were checked by the Ministry to ascertain validity and accuracy prior to payments being made. This was contrary to Financial Regulation 71(1) With respect to payment of subsidy claims under section 8(2)(a) of the Petroleum Production Levy and Subsidy Act, Chapter 62:02, there appears to be an on-going issue concerning claims by a company in respect of sales of petroleum products to its subsidiary. Action should be taken to have this matter resolved. Internal Audit There was no evidence that internal audit checks were performed on the records examined. Inventory Control An Inventory Register for minor equipment as required by Financial Regulation (Stores) 102 was not produced for audit. It was therefore not possible to physically verify items on hand, those disposed of or items purchased. 48 MINISTRY OF TRADE, INDUSTRY AND INVESTMENT Thefts and Losses Thefts of certain computer items as recorded in the Appropriation Account were not seen to have been reported to the Comptroller of Accounts and the Auditor General in contravention of Financial Regulation 131(2). Auditor General s Report 51

58 Chapter 2 Expenditure: Accounts of Accounting Officers 58 MINISTRY OF JUSTICE Expenditure Control Commitments From a sample of vouchers checked totalling $131, funds were not seen to be committed in the Vote Book as required by Financial Regulations 66 and 67. Internal Control There was no evidence of internal audit review on the records examined. Inventory Control The Inventory Register as required by Financial Regulation (Stores) 10 (iii) as seen at the time of the audit was not up to date. Further, items were not properly tagged as State property in accordance with Financial Regulation (Stores) MINISTRY OF TOBAGO DEVELOPMENT Expenditure Control Payments amounting to $36, were made for rental of housing accommodation for the period 4 th January, 2013 to 30 th April, 2013 for one senior officer who also received a housing allowance for the period Evidence was not seen that quotations were received and considered before suppliers for Office Stationery and Supplies were selected. Documents Not Produced The policy relating to disbursements to non-profit organisations was not produced. As a result, it was not possible to determine whether recipients adhered to relevant terms and conditions Deposit vouchers with respect to recovery of overpayments were not presented for audit. Appropriation Account Accounting records such as Pay Record Cards, Interdepartmental Adjustments and Invoice Orders were not always properly prepared in that pertinent information was omitted. Short-Term Employment Letters of Acceptance were not seen from 15 persons out of a sample of 33 selected from 108 persons engaged. Letters of Offer were not seen for 2 persons. As a result, compliance with agreed terms and conditions was not determined. Auditor General s Report 52

59 Chapter 2 Expenditure: Accounts of Accounting Officers Evidence was not seen that 6 persons employed possessed the required qualifications as set out in the relevant Job Descriptions. In addition, 5 persons were employed for continuous periods in excess of the maximum period allowed of 6 months. Contract Employment The approved process for contract employment was not seen to be followed for the sample of 5 persons selected from the total of 20 contract employees. Development Programme The Vote Book relating to three projects, in respect of which expenditure totalling $3,630, was incurred, was not presented for audit. Internal Control There was no evidence of internal audit check on the records examined. departmental checks were not seen on some of the records. Further, 61 MINISTRY OF HOUSING, LAND AND MARINE AFFAIRS Expenditure Control Schedules of Accounts relating to expenditure totalling $3,157, under 3 votes were not provided for audit examination Evidence was not seen that Overpayment Reports were sent to the Comptroller of Accounts and the Auditor General as required by Financial Instruction 164(2) Vote Books for the prior year were not presented to enable the verification of information relating to outstanding commitments brought forward. Appropriation Account Total Expenditure of $205,169, for the financial year 2010 as shown in Note 3 on the Comparative Statement of Expenditure differed from the actual Total Expenditure for that year of $241,381, MINISTRY OF COMMUNITY DEVELOPMENT Expenditure Control Commitments totalling $1,135, in respect of 2 contracts were not seen to be recorded in the Vote Book as required by Minister of Finance Circular No. 23 of 1959 on the subject - Accounting for Commitments and Financial Regulations 66 and 67. Auditor General s Report 53

60 Chapter 2 Expenditure: Accounts of Accounting Officers 63 MINISTRY OF THE ARTS AND MULTICULTURALISM Inventory Control The Inventory Register as required by Financial Regulation (Stores) 102 was not produced. Further, items seen were not properly tagged as State property in accordance with Financial Regulation (Stores) TRINIDAD AND TOBAGO POLICE SERVICE Maintenance of Records A Register of Contracts as required by Financial Regulation 129 (1) was not produced. As a result, particulars of contracts awarded and amounts outstanding were not established. 65 MINISTRY OF FOREIGN AFFAIRS Documents Not Produced The following payment vouchers were not provided for audit: Vote Sample Size No. of Vouchers Not Produced Related Expenditure $ % of Total Expenditure 12 Contract Employment ,192, Relocation of Overseas Staff ,241, Hosting of Conferences, Seminars & Other Functions , Security Services , It should be noted that in the prior year, 59 vouchers totalling $6,858, from the sample requested were also not produced for audit The following documents were also not provided: Cabinet approval for amounts totalling $1,530, paid to 3 Sports Ambassadors and Schedules of Accounts for 3 of these payments totalling $557, Daily Abstracts of Payments for the period July to September 2013 Invoices to support 3 payments totalling $82, to an office supplies company Two contracts for security services for which payments of $2,212, were seen to be made up to August, 2013 to the relevant entities. As a result of the above observations, related expenditure was not verified. 12 This relates to Total Expenditure on the Vote at the time of the audit. Auditor General s Report 54

61 Chapter 2 Expenditure: Accounts of Accounting Officers Non-production of documents for audit represents a serious breach both of the Auditor General s constitutional and legal right of access to all documents relating to the Public Accounts and of financial and accountability requirements. Financial Instruction 43 states, All vouchers, paid cheques and other relevant documents shall on request for Audit examination be made available to the Auditor General or his nominee. Inventory Control An Inventory Register as required by Financial Regulation (Stores) 102 was not produced for audit. Further, items did not bear evidence of being identified as State property in accordance with Financial Regulation (Stores) 55. It was therefore not possible to physically verify items purchased costing $287, or to determine the inventory belonging to the Ministry. Internal Audit There was no evidence of internal audit checks having been performed on the records examined. Overseas Missions Embassy, Brussels The confirmation of Bank balances requested during the audit visit in October, 2013 had not been received as at 15 th April, Certain bank statements for one account were not provided for verification of interest received for a prior period. Internal Control The internal controls were weak in that there was no segregation of duties. One officer was responsible for all aspects of receipts, deposits, payments, purchasing, custody of inventory items and maintenance of accounting and inventory records. Further, evidence of proper oversight by the certifying officer was not seen. Cash Control Prior approval of the Treasury as required by Financial Regulation 20(2) for a nonpermanent, non-pensionable officer to be an authorised signatory to the Mission s bank account was not produced Bank deposit slips requested for the month of September, 2013 were reported to have been shredded and as a result were not presented Approval from the Minister of Finance was not seen for the variation of established procedures related to non-maintenance of certain records in the transition to online banking Records to support payments such as receipts, debit advices, direct transfers and other transaction slips were not provided. Auditor General s Report 55

62 Chapter 2 Expenditure: Accounts of Accounting Officers The Petty Cash Book was not properly maintained in that pertinent information was omitted. Inventory Control Inventory records for two residences were not produced. As a result, it was not possible to determine or verify inventory for these locations A survey of inventory at the Chancery and the official residence revealed no evidence of tagging of furniture to identify them as Government property in accordance with Financial Regulation (Stores) 55. In addition, the Inventory lists produced for these locations did not bear pertinent information such purchase dates or costs, detailed descriptions such as serial numbers, make and model of items, repairs and change of location. Further, 58 items sampled at one location were not recorded, while information relating to certain items was entered in pencil. Maintenance of Records Numerous discrepancies were noted in the maintenance of accounting records necessary for control and audit purposes. The need for training and guidance in this area was identified. Embassy, Cuba Inventory Control The Inventory Register provided for audit was not properly maintained in accordance with Financial Regulation (Stores) There was no evidence of tagging of items as Government property as required by Financial Regulation (Stores) 55. As a result, it was not possible to separately identify Government property from rented furnishings at the Ambassador s residence. Visa Control At the time of the audit visit in October 2013, monthly returns of visas issued were not seen to have been submitted to the Chief Immigration Officer since January Permanent Mission to the United Nations, Geneva Cash Control Prior approval of the Treasury as required by Financial Regulation 20(2) for a nonpermanent, non-pensionable officer to be an authorised signatory to the Mission s bank account was not produced Perusal of the Cash Book revealed that at various times in 9 of the 12 months examined deficit cash balances were recorded in contravention of Financial Instruction 105(2)(a). In addition, the cheque numbers were seen to be replicated for separate payments to various persons during the months of November 2012, August 2013 and September These occurrences represent a serious breach in the system of cash control. Auditor General s Report 56

63 Chapter 2 Expenditure: Accounts of Accounting Officers Contract Employment A contract of employment and terms and conditions as approved by the Chief Personnel Officer were not produced for one contract officer. As a result, the salary payable to this officer was not determined. Inventory Control A survey of inventory revealed no evidence of tagging as Government property in accordance with Financial Regulation (Stores) 55. In addition, the Inventory Registers for the Chancery, the official residence (under repairs) and the temporary residence of the Permanent Representative were not properly maintained in that pertinent information was omitted. The Liquor Register was also not properly maintained. Further, a Vehicle Register was not presented. Expenditure Control Authorisation from the Comptroller of Accounts as required by Financial Regulation 73 for 26 payments totalling $1,071, relating to medical expenses on behalf of the Industrial Court was not produced. Further, there was no evidence that the special remittances which are necessary to facilitate these payments were received Authority for payment of an Upkeep Allowance to one officer was not produced Travelling Allowances were not seen to be paid to officers as required by section 12 of the Civil Service (Foreign Affairs) Regulations The Vote Book which is necessary for expenditure control was not properly maintained in accordance with financial directives. High Commission, Jamaica Inventory Control A physical verification exercise of inventory revealed that items were not tagged to identify them as Government property in accordance with Financial Regulation (Stores) 55. Vehicle Records Vehicle Log Books as required by Ministry of Finance Circular 16 dated 20 th November, 1958 to control the use and maintenance of motor vehicles were not produced for audit. Consulate General, Miami Cash Control The function of Cashier was performed by a person on short-term contract. This is in contravention of Financial Instruction 53(2) which requires a permanent and pensionable officer to perform this duty. Auditor General s Report 57

64 Chapter 2 Expenditure: Accounts of Accounting Officers Authorisation for the operation of a Petty Cash system was not seen. Further, the Imprest Cash Book was not properly maintained. Controls with respect to frequency of redemption and cheque encashment as laid down in Financial Instructions 188(1) and 194(1) were also not followed. Personal Emoluments Authorisation for foreign service allowances to be paid to five officers (two in nonestablished posts) was not seen. Inventory Control A survey of inventory revealed that the Inventory Register as required by Financial Regulation (Stores) 102 was not properly maintained resulting in several differences being noted between physical quantities seen and amounts recorded. Relevant details such as date of acquisition, cost, serial numbers and location of appliances and equipment were not seen to be recorded. In addition, items of furniture and computer equipment were not tagged as Government property as required by Financial Regulation (Stores) 55 and so were not separately identifiable from personal items Control of consumable items and relevant balances on hand could not be ascertained as the Stock Register and the Alcohol Log bore no entries after January Vehicle Records A Vehicle Register and Vehicle Log Books which are necessary for the control and maintenance of vehicles owned by the State were not produced for audit. Remittances audit. A Remittance Register as required by Financial Instruction 74 was not produced for Discrepancies were noted in the calculation and recording of Special Remittances. The need for training and guidance in this area was identified. 66 MINISTRY OF GENDER, YOUTH AND CHILD DEVELOPMENT Appropriation Account Numerous errors were detected in the Appropriation Account with respect to Virements, Revised Estimates and in certain cases Expenditure figures. Differences were also noted between the figures reflected in the Appropriation Account and underlying records and between the Appropriation Account and Note 3 relating to Expenditure Classification Sub-Heads The figure for Unpresented Cheques was shown as Nil in Note 7. However, the audit revealed the actual value to be $7,309, Auditor General s Report 58

65 Chapter 2 Expenditure: Accounts of Accounting Officers 67 - MINISTRY OF PLANNING AND SUSTAINABLE DEVELOPMENT Development Programme Evidence of Internal Audit examination was not seen on the vouchers examined under Development Programme expenditure. Boardwalk Phase II A contract agreement and status reports were not seen for this project in respect of which amounts totalling $10,000, were seen to be paid at the time of the audit. Establishment of an Innovation Financing Facility The Memorandum of Understanding with the appointed Fund Manager expired in June However, payments totalling $3,611, were made subsequent to this date. 68 MINISTRY OF SPORT Expenditure Control Funds were not seen to be committed in the Vote Book before vouchers totalling $1,705, were passed for payment as evidence of ensuring that votes are sufficient to meet all commitments. Minister of Finance Circular No. 23 of 1959 on the subject of Accounting for Commitments and Financial Regulations 66 and 67 refer. The breach of these Regulations was also reported in the prior year The Daily Abstract of Payments for the months of July, August and September 2013 were not produced. This practice is in contravention of the Auditor General s constitutional and legal right of access and Financial Instruction 43 as outlined in paragraphs 1.9 and 1.16 of this Report. Non-Profit Institutions Controls over payments under this vote continue to be weak Non-profit institutions receiving financial assistance are required to submit financial reports accounting for expenditure in accordance with the policy of the Ministry. Evidence was not seen that the necessary documents were received from the sample of recipients selected From the sample selected, invoices were not presented to support a payment of $400, to one company. A search of the online Companies Registry did not reveal any company registered in the name given. Invoices were also not seen for an amount of $63, paid to one person under this vote. Quotations were seen to be used to effect these payments. Current Transfers & Subsidies Controls over payments in this area also continue to be weak. Auditor General s Report 59

66 Chapter 2 Expenditure: Accounts of Accounting Officers Five payments totalling $680, were seen to be made to 2 companies with a common Director for work of the same description undertaken at 5 recreation grounds, namely Maloney, Samaroo, Mayaro, Moruga and Morne Diablo. Serious concerns were expressed in the 2012 Report of the Auditor General on the Public Accounts about payments totalling $1,996, made to one of these companies Original invoices as required by Financial Instruction 113(1) for two payments totalling $251, to one company were not produced for audit Three invoices for equal amounts totalling $259, for catering of meals for the Lifesport Programme in 3 different areas Marabella, Morvant and Bagatelle did not reflect any business address or telephone contact number for the supplier From a review of one month s payments under the LifeSport Programme, 59 participants who were seen to have been paid stipends totalling $88, for St. Joseph, were also seen to have been paid $88, for Maloney. In addition, a further amount of $76, was paid to 51 participants for Maloney. Also, payments to 6 participants in the Maraval area were made to the same bank account. Internal Audit Analysis of the Internal Audit Programme of Work for the year revealed that high risk areas such as the LifeSport Programme, Development Programme and Infrastructure Development were not included for review. 69 MINISTRY OF WORKS AND INFRASTRUCTURE Highways Division Expenditure Control Expenditure of $95,563, as stated in the Vote Book as at 30 th June, 2013 exceeded releases of $87,626, by $7,837, in contravention of Financial Instruction 105(2)(b). VAT Payments It was noted that amounts paid to certain contractors included Value Added Tax (VAT) totalling $59, However the relevant invoices did not bear a VAT registration number as required by section 36 of the Value Added Tax Act, Chapter 75:06. A similar situation was reported in the 2012 Auditor General s Report on the Public Accounts. Procurement Control Contract files for 5 contracts in respect of which payments totalling $13,393, were made, were not produced for audit examination in contravention of Financial Regulation 8(l) and Auditor General s Report 60

67 Chapter 2 Expenditure: Accounts of Accounting Officers Financial Instruction 43 as well as the Auditor General s legal and constitutional right of access to records The Contract Register was not properly maintained in that details of payments totalling $16,327, relating to 18 contracts were not recorded. In addition, the names of contractors were not entered in the Register. 71 MINISTRY OF THE ENVIRONMENT AND WATER RESOURCES Appropriation Account Total expenditure of $2,851,254, exceeded credits granted of $2,839,476, by an amount of $11,777, This contravenes Comptroller of Accounts Circular No. 6 of 8 th February, 1988 which states that cheques must not be issued until approval for grant of credit has been received. General Administration Expenditure Control Documents to support 3 payments totalling $266,569, being Refunds to Water and Sewerage Authority Re Water Improvement Rate were not produced contrary to Financial Regulation 8(l) and the Auditor General s constitutional and legal right of access to all documents. Forestry Division Expenditure Control From a sample of 5 vouchers selected, supporting documents were not seen for 2 items purchased under Minor Equipment while quotations were not seen for any of the items purchased. Physical verification of items could not be performed due to the absence of the Storekeeper on the day of the audit visit. Development Programme Caroni Swamp Management Project A commitment of $546, as shown on the Expenditure Statement for Development Programme was not seen to be recorded in the Vote Book. In addition, the Cabinet Minute and other project documents were not produced as requested. Auditor General s Report 61

68 Chapter 2 Expenditure: Accounts of Accounting Officers Drainage Division Expenditure Control A review of a sample of 16 vouchers for Other Contracted Services revealed the undermentioned issues. Duplicate Payments Duplicate payments of $127, were seen to be paid to one contractor, the second payment being supported mainly by photocopied documents of the first. Evidence of Internal Audit certification was seen on the second voucher. Unauthorised Payments The approved spending limit of $50, was seen to be exceeded for 10 payments totalling $6,874, (for amounts ranging from $261, to $970,538.18). Authorisation by the Accounting Officer was not seen. Maintenance of Expenditure Records Information was not seen to be properly recorded on Schedules of Accounts in accordance with Financial Instruction 27 in several instances. While these were subsequently corrected, it is important to note that proper and timely maintenance of accounting records is a key factor in expenditure control. 72 MINISTRY OF TERTIARY EDUCATION AND SKILLS TRAINING Expenditure Control Daily Abstracts of Payments required for expenditure control were not written up for 3 months of the financial year at the time of the audit visit in November Evidence of internal audit review was not seen in the Vote Book. Contract Employment Pay Record Cards for 5 contract officers from the sample of 7 selected were not produced for audit. Personal files for 4 officers were also not produced Expenditure for the period 22 nd July, 2013 to 26 th September, 2013 under this vote exceeded releases in 14 instances. This is in contravention of Ministry of Finance and the Economy Circular No. 12 dated 22 nd July, 1987 which states that Accounting Officers must ensure that Expenditure is not committed/incurred in excess of releases which have been approved by the Ministry of Finance and the Economy. Auditor General s Report 62

69 Chapter 2 Expenditure: Accounts of Accounting Officers Development Programme Establishment of the National Community College (COSTAATT) Documents to support payments totalling $5,000, under this project were not produced. The cheque numbers also differed from those recorded in the relevant Schedule of Accounts. Establishment of the University of Trinidad and Tobago Documents to support payments totalling $10,000, under this project were not produced. The relevant cheque numbers also differed from those recorded in the underlying Schedule of Accounts. 73 MINISTRY OF SCIENCE AND TECHNOLOGY Development Programme Evidence was not seen that responsible officials conducted any site visits to monitor development projects. Documents Not Produced In contravention of the Auditor General s right of access to documents on demand, critical records/documents such as project files, contracts, bills, quotations, completion certificates, progress reports or status reports were not produced for audit. As a result, the validity of payments made totalling $19,300, on 9 projects, the status of completion of each and adherence to relevant terms and conditions could not be ascertained The Schedule of Accounts relating to an adjustment of a cancelled cheque for $4,000, was also not presented. Internal Control Payment vouchers were not seen to be supported by relevant documents such as contract agreements or invoices from contractors Cheque numbers and dates were not disclosed on payment vouchers totalling $2,974, and the related Schedules of Accounts as required by financial directives. Consequently the audit trail was adversely affected Departmental vouchers bore no evidence of having been verified by Check Staff. Auditor General s Report 63

70 Chapter 2 Expenditure: Accounts of Accounting Officers 74 - MINISTRY OF NATIONAL DIVERSITY AND SOCIAL INTEGRATION Appropriation Account Authority of Signatory The Appropriation Account was signed by an officer for whom evidence of appointment as Accounting Officer was not seen. Deposit Accounts DEPOSIT ACCOUNTS Ministries and Departments are given approval by the Comptroller of Accounts to maintain Deposit Accounts. Monies accepted as deposits are lodged with the Treasury for safekeeping and are referred to as Treasury Deposits. The amounts in the Treasury Deposit accounts are temporary lodgements and are shown as liabilities in the records of the Treasury The Financial Instructions 1965, Part XIII, paragraph 212 (2) states that Departments shall prepare a reconciliation statement with details of the composition of the balance and such statement shall fully explain any difference between the departmental and Comptroller of Accounts balances of the account. Reconciliation Statements of Deposit Accounts and/or supporting analyses of balances where necessary were not received from 22 Accounting Officers in respect of 137 Deposit Accounts as shown below: Ministry/Department No. of Accounts Not Submitted Judiciary 52 Parliament 1 Office of the Prime Minister 1 Ministry of Finance - Inland Revenue Division 8 Ministry of National Security 5 Defence Force 3 Immigration 3 Ministry of Legal Affairs 3 Ministry of Education 6 Ministry of Health 6 Ministry of Labour & Small & Micro Enterprise Development 1 Ministry of Transport 3 Ministry of Public Utilities 1 Ministry of Local Government 1 Ministry of Trade, Industry & Investment 1 Auditor General s Report 64

71 Chapter 2 Expenditure: Accounts of Accounting Officers Ministry/Department No. of Accounts Not Submitted Ministry of the People and Social Development 2 Ministry of Justice 1 Prisons 3 Ministry of Planning & Sustainable Development - C.S.O. 3 Ministry of Housing, Land and Marine Affairs 5 Trinidad & Tobago Police Service 1 Ministry of Foreign Affairs 21 Ministry of Sport 1 Ministry of Works & Infrastructure 3 Ministry of Tertiary Education and Skills Training 2 TOTAL The Financial Instructions 213(1) states: Unless the Treasury otherwise directs, all deposits which have remained unclaimed for three years shall be transferred to revenue. Reconciliation Statements received by the Auditor General in respect of balances held on Deposit Accounts as at 30 th September, 2013 revealed that amounts totalling $671,088, remained on deposit for periods in excess of three years on 12 Deposit Accounts as shown below: Judiciary Ministry/Department No. of Accounts Amount $ St Patrick, Siparia 1 1, Ministry of Finance and the Economy 0 0 Comptroller of Accounts 3 1,954, Ministry of Food Production 1 8, Ministry of Labour & Small & Micro Enterprise Development 1 24, Ministry of Public Administration 2 2,789, Ministry of Energy and Energy Affairs 4 666,308, TOTAL ,088, The approval of the Comptroller of Accounts for the retention of these amounts on deposit beyond a three-year period was not seen. Auditor General s Report 65

72 Chapter 2 Expenditure: Accounts of Accounting Officers Findings with respect to individual Ministries/Departments follow. Ministry of Finance & the Economy Inland Revenue Division End of year reconciliation statements for 7 Deposit Accounts were not received in the Auditor General s Department as required by financial directives Minor differences relating to balances on 3 Deposit Accounts have existed since 1993 between the Division s records and the control account at Treasury. These remained unadjusted at the time of the audit. Customs and Excise Division Original documents relating to 5 Deposit Accounts were not presented for audit. As a result, the following balances were not verified: Receipts amounting to $143,362, Payments amounting to $95,122, Deposit balances totalling $115,872, Ministry of Foreign Affairs Balances on Deposit Accounts could not be verified as the Deposit Register was not properly maintained with pertinent details relating to receipts. Further, Reconciliation Statements as required by financial directives for the years 2012 and 2013 were not produced for audit. Ministry of Food Production A minor unreconciled difference has existed since 1973 between the records of the Ministry and the control account at Treasury. This difference remained unadjusted at the time of the audit. Auditor General s Report 66

73 CHAPTER 3 ACCOUNTS OF RECEIVERS OF REVENUE Auditor General s Report 67

74 Auditor General s Report 68

75 CHAPTER 3 ACCOUNTS OF RECEIVERS OF REVENUE 3.1 Receivers of Revenue are responsible for all aspects of the collection of revenue and for rendering proper account of the sums received under specific Heads of Revenue assigned to them. The Letter of Appointment which is issued to each Receiver of Revenue details the responsibility of a Receiver of Revenue as follows: In order that there may be no misunderstanding, it is emphasized that under the heading of collection your responsibility covers all the following stages:- Ascertaining the existence of liabilities Ensuring that correct charges are levied Establishing written records of sums due and paid Taking proper steps to secure payment. REVENUE COLLECTIBLE 3.2 The revenue estimated to be collected for the financial year 2013 was $57,928,571, This revenue was authorized to be collected under the following Heads of Revenue: Classification Head Of Revenue 2013 Estimate $000 Tax Revenue 01 Taxes on Income and Profits 32,685, Taxes on Property 8, Taxes on Goods and Services 8,261, Taxes on International Trade 2,496, Other Taxes 244,113 TOTAL TAX REVENUE 43,696,669 Non-Tax Revenue 06 Property Income 5,717, Other Non-Tax Revenue 1,629, Repayment of Past Lending 22,968 TOTAL NON-TAX REVENUE 7,369,685 Capital Receipts 09 Capital Revenue 487,452 Financing 10 Borrowing 6,374,765 GRAND TOTAL 57,928,571 Auditor General s Report 69

76 Chapter 3 Revenue: Accounts of Receivers of Revenue REVENUE COLLECTED 3.3 The Statement of Revenue submitted by the Treasury showed that the total actual revenue collected during the financial year ended 30 th September, 2013 was $53,251,532, Paragraph 6.17 of this Report refers. This amount was collected under the various categories as shown below: $000 Tax Revenue 43,109,303 Non-Tax Revenue 7,621,050 Capital Receipts 501,431 Financing 2,019,749 GRAND TOTAL 53,251, A comparison was made between figures reflected in the Statement of Revenue submitted by the Treasury and the amounts in the various Statements of Receipts and Disbursements received in the Auditor General s Department from Receivers of Revenue. Details of differences in excess of $50, are given below. Receiver of Revenue ED1 - Permanent Secretary, Ministry of Education FN1 Comptroller of Accounts, Ministry of Finance & the Economy FN2 Chairman Board of Inland Revenue, Ministry of Finance & the Economy FN3 Comptroller of Customs & Excise, Ministry of Finance & the Economy LA1 Registrar General, Ministry of Legal Affairs LA3 Permanent Secretary, Ministry of Legal Affairs MJ1 Chief Magistrate, Magistracy Judiciary NS2 Chief Immigration Officer, Ministry of National Security TE1 Permanent Secretary, Ministry of Tertiary Education and Skills Training Statement of Revenue $ Statement of Receipts and Disbursements $ Difference More/(Less) Than Statement of Revenue $ 1,999, ,261, , ,420,246, ,253,480, ($166,765,496.53) 53,120,917, ,274,897, ($13,846,020,269.98) 6,356,543, ,751,384, ($2,605,159,315.39) 28,309, ,403, , , , (68,479.00) 79,401, ,979, (2,421,852.83) 45,056, ,282, , , , (312,258.00) Auditor General s Report 70

77 Chapter 3 Revenue: Accounts of Receivers of Revenue STATEMENTS OF RECEIPTS AND DISBURSEMENTS 3.5 In accordance with section 24 (1) (c) of the Exchequer and Audit Act, Chapter 69:01 as amended by the Financial Year Act, 1998, Receivers of Revenue were required to prepare and transmit to the Auditor General, statements of their receipts and disbursements for the financial year ended 30 th September, 2013 by 31 st January, Despite this, certain entities were delinquent in meeting the statutory deadline for accounting for the receipt and disbursement of funds under their remit. This practice not only breaches statutory responsibility for submission but severely constrains the time available to carry out the audit. Further, Statements of Receipts and Disbursements were not received from a number of Receivers of Revenue. Statements of Receipts and Disbursements which were not received by the statutory deadline or not at all are listed below. Code Revenue Head Date Received No. of Items Estimated Revenue $ AT6 Registrar, Tax Appeal Board Not Received 1 1, EV1 HS1 HS2 JT1 LA2 NS4 Permanent Secretary, Ministry of the Environment and Water Resources Permanent Secretary, Ministry of Housing, Land and Marine Affairs Commissioner State Lands, Ministry of Housing, Land & Marine Affairs Commissioner of Prisons, Ministry of Justice Controller, Intellectual Property Office, Ministry of Legal Affairs Chief Fire Officer, Ministry of National Security Not Received ,390, Not Received 11 18,480, Not Received 14 10,705, Not Received 2 87, th February ,610, Not Received 3 500, R08 Revenue Officer IV, Tobago Not Received 1 500, TP2 TP3 Transport Commissioner, Ministry of Transport Director Maritime Services, Ministry of Transport Not Received ,124, Not Received 13 8,558, ERRORS IN/OMISSIONS FROM THE STATEMENTS OF RECEIPTS AND DISBURSEMENTS 3.7 Comptroller of Accounts Circular No. 08 dated September 02, 2013 reminded Receivers of Revenue of their reporting responsibility and provided detailed instructions with respect to the preparation and submission of Statements of Receipts and Disbursements for the year ended 30 th September, Nevertheless, typographical and other errors as well as omissions were Auditor General s Report 71

78 Chapter 3 Revenue: Accounts of Receivers of Revenue evident in certain statements submitted for audit as shown below. These have been referred to the respective entities and have no material effect on the truth and fairness of the Public Accounts except as otherwise stated in this Report. However, the following Receivers of Revenue are reminded of their responsibility to ensure that the statements submitted are thoroughly checked for errors and omissions before submission to the Auditor General by the statutory deadline. AT4 Chief State Solicitor, Ministry of the Attorney General ED1 Permanent Secretary, Ministry of Education FN3 Comptroller of Customs and Excise, Ministry of Finance and the Economy FP1 Permanent Secretary, Ministry of Food Production TE1 Permanent Secretary, Ministry of Tertiary Education & Skills Training ND1 Permanent Secretary, Ministry of National Diversity & Social Integration AUDIT OF REVENUE 3.8 Observations arising from the examination of the systems and procedures for revenue accounting as well as the Statements of Receipts and Disbursements (where received) of the under-mentioned Receivers of Revenue are highlighted in the subsequent paragraphs. AT4 CHIEF STATE SOLICITOR, MINISTRY OF THE ATTORNEY GENERAL Revenue Control Revenue Records Not Produced 3.9 Treasury Cards for the months of April to June 2013 which were necessary for reconciliation of revenue receipts for Lease Fees and Bond Fees were not made available for audit. Statement of Receipts and Disbursements Authority of Signatory 3.10 The Statement of Receipts and Disbursements was signed by an officer for whom the required appointment as Receiver of Revenue was not seen. Auditor General s Report 72

79 Chapter 3 Revenue: Accounts of Receivers of Revenue CD1 PERMANENT SECRETARY, MINISTRY OF COMMUNITY DEVELOPMENT Statement of Receipts and Disbursements Documents Not Produced 3.11 Critical records such as 2 Cash Books and a Revenue Register required to be maintained by Financial Regulations 50, 51(b) and 55 were not produced. As a result, revenue relating to Rental of Exhibition Space and Adult Classes was not verified. ED1 PERMANENT SECRETARY, MINISTRY OF EDUCATION Revenue Control Documents Not Produced 3.12 Contract documents for rental of two locations were not provided. As a result, the completeness of the revenue figure as well as related terms and conditions were not verified. Statement of Receipts and Disbursements Authority of Signatory 3.13 The Statement of Receipts and Disbursements was signed by an officer for whom the required appointment as Receiver of Revenue was not seen. EN1 PERMANENT SECRETARY, MINISTRY OF ENERGY AND ENERGY AFFAIRS Revenue Control 3.14 The Petroleum Register as required by section 20(1) of the Petroleum Act, Chapter 62:01 and which is necessary for determining contracts from which revenue is to be derived was not being maintained. The last entries seen were dated in There was also no evidence that a system existed at the Ministry to monitor revenue received and receivable No evidence was seen that production data received from oil companies and used in the calculation of revenue due under two accounts - Royalty on Gas & Oil and Share of Profits from Oil Companies - was verified by the Ministry Work plans and status reports of the Production Sharing Contracts Audit Unit were not provided. The reliability of the internal controls in this area could therefore not be assessed. Statement of Receipts and Disbursements 3.17 Treasury Cards for 10 accounts in respect of revenue totalling $76,225, required to verify the relevant Revenue figures were not produced. Auditor General s Report 73

80 Chapter 3 Revenue: Accounts of Receivers of Revenue 3.18 The figure of $3,302,537, shown as Total Receipts on the Statement of Receipts and Disbursements differed from the figure of $3,271,617, shown in the Cash Book. The reason for the difference of $30,920, was not determined. FA1 PERMANENT SECRETARY, MINISTRY OF FOREIGN AFFAIRS Overseas Mission Cash Control - Embassy, Cuba 3.19 There was no segregation of duties with respect to the collecting, recording and banking of cash receipts. The compensating control required by Financial Instruction 73 was also not evident. FN2 CHAIRMAN BOARD OF INLAND REVENUE, MINISTRY OF FINANCE AND THE ECONOMY Audit Scope 3.20 The audit of certain aspects of revenue at the Inland Revenue Division was hampered by the official secrecy provisions of section 4 of the Income Tax Act, Chapter 75:01. Legal advice has been sought with respect to this issue. FN3 COMPTROLLER OF CUSTOMS AND EXCISE, MINISTRY OF FINANCE AND THE ECONOMY Revenue Control 3.21 The following unreconciled differences were noted between Revenue recorded in the computerised accounting system at the Customs and Excise Division and that recorded in the control account at Treasury: Revenue Item Per Customs Per Treasury Difference Purchase Tax $237, $171, $66, Import Duty $2,551,388, $2,622,887, $71,499, In certain instances during the year, Monthly Statements of Receipts were not in agreement with the underlying records. Auditor General s Report 74

81 Chapter 3 Revenue: Accounts of Receivers of Revenue Statement of Receipts and Disbursements 3.23 The figure of $3,751,384, shown as Total Receipts on the Statement differed from that of $3,768,856, shown on the Treasury Card (control account) by an unreconciled difference of $17,472, Taxes on Good & Services of $1,118,033, differed from the corresponding Cash Book figure of $1,069,738, by an unreconciled amount of $48,295, Statements of Revenue were not provided for 3 outstations. Authority of Signatory 3.26 The Statement of Receipts and Disbursements was signed by an officer for whom the required appointment as Receiver of Revenue was not seen. FN5 PERMANENT SECRETARY, MINISTRY OF FINANCE AND THE ECONOMY (INVESTMENTS DIVISION) Revenue Control 3.27 A Remittance Register as required by Financial Instruction 74(1) for control of revenue received by mail was not produced for audit Authority for the Research Officer II to endorse cheques on behalf of the Permanent Secretary was not produced. FP1 PERMANENT SECRETARY, MINISTRY OF FOOD PRODUCTION Revenue Control 3.29 During the audit in October 2013, records critical to revenue control were not seen to be properly maintained. For instance, certain monthly totals in the Revenue Register were written in pencil in contravention of Financial Instruction 256(1). Further, unresolved differences existed among the monthly Revenue Statement, the Revenue Register, the Revenue Abstract and the Treasury Card. It was noted that monthly Outstation Reports are not received on a timely basis for example, Cash Book pages for the selected month of June for 6 of the 8 outstations sampled were not produced Audit surveys were conducted at nine outstations during November and December, At three outstations, Counterfoil Registers which are critical to control over counterfoil documents such as receipt books were not seen to be maintained. Auditor General s Report 75

82 Chapter 3 Revenue: Accounts of Receivers of Revenue Statement of Receipts & Disbursements Authority of Signatory 3.31 The Statement of Receipts and Disbursements was signed by an officer for whom the required appointment as Receiver of Revenue was not seen. LA3 PERMANENT SECRETARY, MINISTRY OF LEGAL AFFAIRS Revenue Control Sale of Publications 3.32 At the interim audit, a difference of $116, was noted between the Cash Book balance of $353, and the balance of $469, according to the Treasury Card as at 30 th September, Controls over counterfoil receipt books were noted to be deficient as the Counterfoil Register was not being properly maintained for this purpose. The relevant returns to the Comptroller of Accounts and the Auditor General were not seen to be submitted as required by Financial Instruction 96(1). MJ1 CHIEF MAGISTRATE, MAGISTRACY JUDICIARY Statement of Receipts & Disbursements 3.34 The figure of $79,400, shown as Total Receipts differed from that of $78,042, according to the underlying records. The reason for the difference of $1,358, was not ascertained. ND1 PERMANENT SECRETARY, MINISTRY OF NATIONAL DIVERSITY AND SOCIAL INTEGRATION Revenue Control 3.35 A Revenue Register as required by Financial Regulation 55 for accounting and control purposes was not presented. NS2 CHIEF IMMIGRATION OFFICER, MINISTRY OF NATIONAL SECURITY Statement of Receipts and Disbursements Disclaimer 3.36 Statements of Revenue from 16 Collectors of Revenue were not produced for audit examination. Comptroller of Accounts Circular No. 08 dated September 02, 2013 is relevant. Auditor General s Report 76

83 Chapter 3 Revenue: Accounts of Receivers of Revenue As a result, the total revenue of $45,282, and total disbursements (deposits to Treasury) of $45,276, were not verified. Revenue Control 3.37 Proper maintenance of subsidiary records and regular reconciliation with control information from the Comptroller of Accounts is a critical aspect of revenue control towards mitigation of related risks. Urgent attention needs to be paid to strengthening the accounting controls in this area. PS2 DIRECTOR OF STATISTICS, MINISTRY OF PLANNING AND SUSTAINABLE DEVELOPMENT Statement of Receipts and Disbursements Authority of Signatory 3.38 The Statement of Receipts and Disbursements was signed by an officer for whom the required appointment as Receiver of Revenue was not seen. SJ1 REGISTRAR, SUPREME COURT - JUDICIARY Statement of Receipts & Disbursements 3.39 The figure of $2,287, shown as Total Receipts on the Statement differed from that of $2,116, according to the underlying records. The reason for the difference of $170, was not determined. TR1 PERMANENT SECRETARY, MINISTRY OF TRADE, INDUSTRY AND INVESTMENT 3.40 The Revenue Register was not properly maintained in accordance with Financial Regulation 55 in that a number of receipts were not entered. Further, no evidence was seen that differences noted between the Revenue Register and related records were reconciled. RETURNS OF ARREARS OF REVENUE 3.41 Financial Regulation 56(2) states as follows: Accounting Officers and Receivers of Revenue shall submit the original returns of arrears of revenue for the half year ending 31 st March and 30 th September to the Treasury and copies thereof shall be sent to the Auditor General not later than six weeks after the date to which they relate. Auditor General s Report 77

84 Chapter 3 Revenue: Accounts of Receivers of Revenue 3.42 At the statutory deadline of 12 th November, 2013, Statements of Returns of Arrears of Revenue for the half year ended 30 th September, 2013 were not received from several Receivers of Revenue in respect of 264 items of revenue as shown below. Code Revenue Head Date Received No. of Items AT6 Registrar, Tax Appeal Board Not received 1 EV1 Permanent Secretary, Ministry of the Environment & Water Resources Not received 15 FA1 Permanent Secretary, Ministry of Foreign Affairs Not received 2 Ministry of Finance & the Economy: 0 FN1 Comptroller of Accounts 12 th February FN2 Chairman Board of Inland Revenue 31 st January FN3 Comptroller of Customs & Excise 31 st January FN5 Investment Division 31 st January FN6 Permanent Secretary 31 st January RO1 Revenue Officer V, St George West 21 st January, RO2 Revenue Officer IV, St George 9 th January RO3 Revenue Officer IV, Caroni/Chaguanas 11 th December, RO4 Revenue Officer IV, St Andrew/St. David 31 st January, RO5 Revenue Officer IV, St Patrick 28 th January RO6 Revenue Officer IV, Nariva Mayaro 21 st January FP1 Permanent Secretary, Ministry of Food Production 10 th February GY1 Permanent Secretary, Ministry of Gender, Youth & Child Development Not Received 5 Ministry of Housing, Land & Marine Affairs: 0 HS1 Permanent Secretary Not Received 8 HS2 Commissioner State Lands Not Received 14 HS3 Director of Surveys Not Received 4 JT1 Commissioner of Prisons, Ministry of Justice Not Received 2 Ministry of Legal Affairs: 0 LA1 Registrar General 30 th January LA2 Controller, Intellectual Property Office 30 th January LA3 Permanent Secretary 30 th January LE1 Permanent Secretary, Ministry of Labour & Small & Micro Enterprise ND1 Development Not Received 3 Permanent Secretary, Ministry of National Diversity & Social Integration Not Received 1 Ministry of National Security: 0 NS2 Chief Immigration Officer 22 nd November NS4 Chief Fire Officer Not Received 3 NS3 Commissioner of Police, Trinidad & Tobago Police Service 14 th November PL1 Permanent Secretary, Ministry of Planning & Sustainable Development Not Received 1 PU1 Permanent Secretary, Ministry of Public Utilities 18 th November SC1 Director of Personnel Administration, Service Commissions Department Not Received 3 Auditor General s Report 78

85 Chapter 3 Revenue: Accounts of Receivers of Revenue Ministry of Food Production 3.43 Three amounts totalling $20, have been included in the balance of Arrears of Revenue for this Ministry since CONSOLIDATED STATEMENT OF ARREARS OF REVENUE 3.44 A Consolidated Statement of Arrears of Revenue at 30 th September, 2013 submitted by the Permanent Secretary, Ministry of Finance & the Economy shows Arrears of Revenue totalling $7,886,854, The comparative balance at 30 th September, 2012 was $21,691,500, There was therefore a decrease of $13,804,646, However, the Permanent Secretary, Ministry of Finance & the Economy indicated that information concerning arrears of revenue was not received from a number of Receivers of Revenue. Auditor General s Report 79

86 Auditor General s Report 80

87 CHAPTER 4 FUNDS & ACCOUNTS OF ADMINISTERING OFFICERS Auditor General s Report 81

88 Auditor General s Report 82

89 CHAPTER 4 FUNDS & ACCOUNTS OF ADMINISTERING OFFICERS FUNDS 4.1 A number of Funds were established under section 43 of the Act and/or other legislative authority. Administering Officers are appointed by the Minister of Finance to administer all moneys disbursed from the following Funds: Unemployment Fund Infrastructure Development Fund NUGFW Training Fund Government Assistance for Tuition Expenses (GATE) Fund Green Fund CARICOM Trade Support Fund CARICOM Petroleum Fund 4.2 Administering Officers are required to keep separate books of account and separate bank accounts in respect of each Fund and to ensure that a proper system of accounting as approved by the Treasury is established and maintained. This responsibility includes monitoring disbursements from the Infrastructure Development Fund for projects that have been contracted out to special purpose state enterprises. 4.3 Administering Officers are also required, inter alia, to: prepare financial statements in a format approved by the Treasury for submission to the Auditor General within a period of four months after the close of the financial year in accordance with section 24 (2) (a) and (b) of the Exchequer and Audit Act, Chapter 69:01, and ensure that the funds entrusted to their care are properly safeguarded and applied only for the purposes specified on the Schedule to the Warrant for withdrawal from the Funds. FUNDS AUTHORISED FOR WITHDRAWAL 4.4 During the financial year ended 30 th September, 2013, the Minister of Finance, by Warrants, authorized withdrawals totalling $6,310,480, from 4 Funds, as shown below: Auditor General s Report 83

90 Chapter 4 Funds: Accounts of Administering Officers Unemployment Fund Administering Officer Permanent Secretary, Office of the Prime Minister Permanent Secretary, Office of the Prime Minister Payment to Tobago House of Assembly Permanent Secretary, Ministry of the Environment & Water Resources Government Assistance for Tuition Expenses (GATE) Fund Total Disbursements $ 327,606, ,000, ,370, Permanent Secretary, Ministry of Tertiary Education & Skills Training 726,130, Green Fund Permanent Secretary, Ministry of the Environment & Water Resources 33,637, Infrastructure Development Fund Clerk of the House, Parliament Permanent Secretary, Office of the Prime Minister Permanent Secretary, Ministry of National Security Permanent Secretary, Ministry of the Attorney General Permanent Secretary, Ministry of Food Production Permanent Secretary, Ministry of Education Permanent Secretary, Ministry of Health Permanent Secretary, Ministry of Labour & Small & Micro Enterprise Development Permanent Secretary, Ministry of Public Administration Permanent Secretary, Ministry of Transport Permanent Secretary, Ministry of Tourism Permanent Secretary, Ministry of Energy & Energy Affairs Permanent Secretary, Ministry of Local Government Permanent Secretary, Ministry of Trade, Industry & Investment Permanent Secretary, Ministry of Justice Permanent Secretary, Ministry of Housing, Land & Marine Affairs Permanent Secretary, Ministry of Community Development Permanent Secretary, Ministry of the Arts & Multiculturalism Trinidad & Tobago Police Service Permanent Secretary, Ministry of Foreign Affairs Permanent Secretary, Ministry of Gender, Youth & Child Development Permanent Secretary, Ministry of Planning & Sustainable Development Permanent Secretary, Ministry of Sport Permanent Secretary, Ministry of Works & Infrastructure Permanent Secretary, Ministry of the Environment & Water Resources Permanent Secretary, Ministry of Tertiary Education & Skills Training Permanent Secretary, Ministry of National Diversity & Social Integration 16,891, ,687, , ,687, ,286, ,102, ,868, ,188, ,361, ,250, ,413, ,592, ,716, ,118, ,136, ,098,792, ,887, ,439, ,742, ,074, , ,809, ,336, ,715, ,141, ,413, ,229, TOTAL 6,310,480, Auditor General s Report 84

91 Chapter 4 Funds: Accounts of Administering Officers FINANCIAL STATEMENTS 4.5 The Comptroller of Accounts by Circular No. 10 dated September 04, 2013 provided Administering Officers with guidelines for the preparation and submission of Financial Statements. Administering Officers were required to submit certified Financial Statements for the financial year ended 30 th September, 2013 for each Fund to the Comptroller of Accounts by 30 th November, 2013 to enable the Comptroller of Accounts to examine, consolidate and transmit the Statements to the Auditor General, on or before 31 st January, Certified Financial Statements were not received in the Auditor General s Department in respect of withdrawals totalling $2,709,235, from 7 Administering Officers as under: Financial Statement Amounts paid from the Fund ($) Permanent Secretary, Office of the Prime Minister URP 327,606, Permanent Secretary, Office of the Prime Minister Tobago House of Assembly URP 19,000, Permanent Secretary, Ministry of the Attorney General IDF 3,687, Permanent Secretary, Ministry of Housing, Land & Marine Affairs IDF Permanent Secretary, Ministry of Environment & Water Resources IDF Permanent Secretary, Ministry of Environment & Water Resources URP Permanent Secretary, Ministry of Environment & Water Resources Green Fund 2,098,792, ,141, ,370, ,637, TOTAL WITHDRAWALS 2,709,235, Financial Statements were received after the statutory deadline of 31 st January, 2014 from 4 Officers, as shown below: Financial Statement Date Received Amounts paid from the Fund 2013 ($) Permanent Secretary, Ministry of Education 4 th February, ,102, Permanent Secretary, Ministry of Local Government 19 th February, ,716, Permanent Secretary, Ministry of Justice 19 th February, ,136, Permanent Secretary, Ministry of Planning & Sustainable Development 19 th February, ,809, TOTAL WITHDRAWALS 894,765, According to Treasury Statements TS 50 to TS 64 Auditor General s Report 85

92 Chapter 4 Funds: Accounts of Administering Officers INFRASTRUCTURE DEVELOPMENT FUND - $558,817, The balance on this Fund decreased by $7,265, or 1.3% from the previous year s figure of $566,078, Fund receipts totalling $5,136,471, comprised the following: $ Interest earned for ,426, Transfers from the Consolidated Fund 4,129,000, Transfers from the Consolidated Fund for the previous year 1,000,000, Miscellaneous receipts previous years 45, TOTAL FUND RECEIPTS 5,136,471, Expenditure from the Fund by Ministries and Departments totalled $5,143,736, TS 52 and TS 53 refer. 4.9 Comptroller of Accounts Circular No. 12 dated 9 th November, 2005 on the subject Accounting Arrangements for Disbursement of Funds from the Infrastructure Development Fund sets out guidelines to be followed to ensure accountability and transparency with respect to projects undertaken under the Infrastructure Development Fund Findings arising from the audit of the Infrastructure Development Fund at Ministries/Departments are summarised in the following paragraphs. ERRORS IN/OMISSIONS FROM THE FINANCIAL STATEMENTS 4.11 Typographical and other errors as well as omissions were noted in the financial statements submitted by the following entities: Ministry of Education Ministry of Trade, Industry & Investment Ministry of Energy & Energy Affairs Ministry of National Diversity & Social Integration. 05 PARLIAMENT Financial Statement 4.12 The Financial Statement was not prepared in accordance with Comptroller of Accounts Circular No. 10 in that Notes to the Statement and a Report on the Activities were not included. Documents Not Produced 4.13 Project Review Reports were not provided for two projects, namely Restoration of the Red House ($15,072,176.01) and Temporary Relocation of Parliament to Tower D Auditor General s Report 86

93 Chapter 4 Funds: Accounts of Administering Officers International Waterfront Complex ($1,819,768.03). As a result, the status of completion of these projects could not be determined. 13 OFFICE OF THE PRIME MINISTER Authority of Signatory 4.14 The Financial Statement was signed by an officer other than the appointed Administering Officer. Restoration of Stollmeyer s Castle 4.15 This project is currently in its 10 th year of operation. Expenditure since inception in 2005 is as follows: Year Expenditure ($) , ,767, ,000, ,920, ,659, ,345, ,150, ,127, ,451,961 Total Actual 70,272, (estimate) 18,288,000 Projected Total to ,560, Invoices to support a payment of $1,107, charged under this vote in 2013 were not produced for audit scrutiny. Whitehall Restoration 4.17 Expenditure on this project since its inception is as follows: Year Expenditure ($) ,819, , , , ,381 Total Actual 5,676,190 No provision has been made for this project in the 2014 Draft Estimates. Auditor General s Report 87

94 Chapter 4 Funds: Accounts of Administering Officers 4.18 A visit to the site revealed that the building is bird-infested and deteriorating. Furniture is also not being adequately protected from dust and infestation It was noted that on average $13, per month is paid in electricity expense (at industrial rates) even though the building has been vacant since August, Audit was advised that a reduced rate is being pursued. 25 MINISTRY OF FOOD PRODUCTION 4.20 A copy of the Letter of Appointment of the Administering Officer for this Ministry was not provided for audit. Upgrading/Construction of Fishing Facilities in Trinidad 4.21 Neither a contract nor a Memorandum of Understanding was produced to support payments totalling $8,286, made to the executing agency under this Project. As a result, the terms and conditions of execution could not be ascertained for comparison with internally generated status reports and other control documents. 26 MINISTRY OF EDUCATION Authority of Signatory 4.22 A copy of the Letter of Appointment of the Administering Officer was not provided for audit purposes. 28 MINISTRY OF HEALTH Physical Investments (Hospitals, District Health Facilities, Health Centres) 4.23 Neither a contract nor a Memorandum of Understanding was produced to support payments totalling $8,800, made to the executing agency for property development. As a result, compliance with the terms and conditions for implementation of this project could not be determined. 30 MINISTRY OF LABOUR AND SMALL AND MICRO ENTERPRISE DEVELOPMENT Commitments 4.24 Funds were not seen to be committed in the Vote Book before vouchers totalling $3,079, were passed for payment as required by Minister of Finance Circular No. 23 of These vouchers related to invoices pertaining to the years 2004 and Auditor General s Report 88

95 Chapter 4 Funds: Accounts of Administering Officers 35 MINISTRY OF TOURISM Improvement and Expansion Works, Emperor Valley Zoo 4.25 Contracts for Phase 2 of this project were seen to be executed by an entity other than the executing agency appointed by Cabinet. Neither the authority for this change nor a Memorandum of Understanding or Contract with the new executing agency was produced. Total expenditure for the year on this project was $14,996, MINISTRY OF ENERGY AND ENERGY AFFAIRS Construction of Multi-Fuel Pipeline 4.26 As in the prior year, a contract for this project as required by the directives of the Comptroller of Accounts was not produced for audit. As a result, the terms and conditions under which this project was being undertaken were not determined Payments to the executing agency during the year totalled $152,999, of which invoices and other supporting documents relating to payments totalling $10,229, were not produced Expenditure from inception in 2008 to September 2013 on this project totalled $763,814, However, Cabinet approval was seen for total expenditure of only $763,600, Authorisation was not seen for the difference of $214, Value Added Tax (VAT) totalling $21,715, relating to work done by a foreign firm was seen to be reimbursed to a state enterprise in the financial years 2011 and However, no evidence was seen from the invoices examined, that VAT had been charged by the firm to necessitate this reimbursement. Evidence that this overpayment was recovered by the Ministry was not seen. Development of Industrial Sites 4.30 A status report for this project was not produced. The stage of completion of the project was therefore not determined. Development of New Port Facilities 4.31 The contract and file for this project as well as 8 invoices in respect of expenditure totalling $145,684, were not provided for audit in contravention of Financial Instruction The signature of the authorising officer was not seen on the voucher relating to a payment of $709, under this project. Auditor General s Report 89

96 Chapter 4 Funds: Accounts of Administering Officers Financial Statement 4.33 The Summary of Cost required to be disclosed at Part B of the Financial Statement was omitted. Reports on the activities associated with the implementation of 3 projects with expenditure totalling $319,592, were not included with the Financial Statement in contravention of the directives of the Comptroller of Accounts. Documents Not Produced 4.34 The following documents necessary to verify the figures in the Financial Statements were not produced: Treasury Card Notification of Disbursement Cheque Listing Reconciliation of Monthly Abstract and List of Unpaid Cheques. 48 MINISTRY OF TRADE, INDUSTRY AND INVESTMENT Financial Statement 4.35 The Financial Statement submitted was not prepared in accordance with Comptroller of Accounts directives in that it consisted of 2 separate statements In addition, the Total Expenditure shown in Part B of one Financial Statement was $104,829, while the corresponding figure shown in Part A of that Statement was $12,615, MINISTRY OF THE ARTS AND MULTICULTURALISM Academy for the Performing Arts 4.37 Neither a contract nor a Memorandum of Understanding was produced to support payments totalling $208,439, made to the executing agency under this Project. As a result, the terms and conditions of execution could not be ascertained. 64 TRINIDAD AND TOBAGO POLICE SERVICE Financial Statement 4.38 The Financial Statement was not prepared in accordance with paragraphs 5 and 6 of the Comptroller of Accounts Circular No. 10 in that there were no accompanying Notes to the Auditor General s Report 90

97 Chapter 4 Funds: Accounts of Administering Officers Statement and the Report on Activities associated with implementation of the project was not included. 67- MINISTRY OF PLANNING AND SUSTAINABLE DEVELOPMENT Urban Redevelopment 4.39 A Contract or Memorandum of Understanding with the executing agency and certain other documents as required by Comptroller of Accounts Circular No. 12 dated 9 th November, 2005 were not provided for audit. 68 MINISTRY OF SPORT 4.40 Project review reports as required by financial directives for monitoring of projects were not produced for audit. 69 MINISTRY OF WORKS AND INFRASTRUCTURE 4.41 Neither contracts nor Memoranda of Understanding were produced to support payments totalling $676,506, made to 2 executing agencies under the following Projects: Road Construction Major Road Rehabilitation Dualling of the Diego Martin Highway POS East/West Corridor Transportation Project As a result, the terms and conditions of execution could not be ascertained. 71 MINISTRY OF THE ENVIRONMENT AND WATER RESOURCES 4.42 The computerised Abstract of Payments did not reflect the daily expenditure incurred under each project as required by Financial Instruction 31(1). Design and Installation of Main along Caroni South Trunk 4.43 Critical supporting documents such as Memoranda of Understanding, project status reports and signed contracts required by Comptroller of Accounts Circular No. 12 dated 9 th November, 2005 were not produced for audit examination in contravention of Financial Instruction 43. As a result, expenditure totalling $53,166, was not verified. Auditor General s Report 91

98 Chapter 4 Funds: Accounts of Administering Officers 72 MINISTRY OF TERTIARY EDUCATION AND SKILLS TRAINING Financial Statement 4.44 The Financial Statement submitted did not include Notes as required by the directives of the Comptroller of Accounts. 74 MINISTRY OF NATIONAL DIVERSITY AND SOCIAL INTEGRATION Authority of Signatory 4.45 The Financial Statement was signed by an officer for whom the required appointment as Administering Officer was not seen. MUNICIPAL CORPORATIONS San Fernando City Corporation 4.46 Evidence was not seen that the unspent balance as at 30 th September, 2013 of $181, was remitted to the Treasury as required by the directives of the Comptroller of Accounts Commitments as at 30 th September, 2013 totalled $218, This amount represents commitments dating back to The balance remained unchanged from the prior year The bank account relating to this Fund remains dormant. As at 30 th September, 2013 the balance on this account was $400, UNEMPLOYMENT FUND - $7,758,667, The Unemployment Fund was established by section 14(2) of the Unemployment Levy Act, Chapter 75:03 which also provides that the Fund shall be administered by the Minister of Finance Section 14(3) authorises the Minister of Finance to make advances from the Fund for stipulated purposes. Section 17 provides that all moneys collected pursuant to the Act shall be paid into the Unemployment Fund The Unemployment Relief Programme is the programme for which advances are made from the Unemployment Fund as permitted by section 14(3). This is done pursuant to decisions made from time to time by Cabinet The balance on the Unemployment Fund showed an increase of $755,658, or 10.79% over the previous year s balance of $7,003,009, Receipts to the Fund comprised Unemployment Levy collected by the Board of Inland Revenue amounting to $1,111,820, Auditor General s Report 92

99 Chapter 4 Funds: Accounts of Administering Officers as well as interest of $50,211, on cash balances and miscellaneous receipts of $603, TS 50 and TS 51 refer Amounts were paid to the following officers with respect to the Unemployment Relief Programme during the year: $ Permanent Secretary, Ministry of the Environment & Water Resources 60,370, Permanent Secretary, Office of the Prime Minister 327,606, Permanent Secretary, Office of the Prime Minister - Tobago House of Assembly 19,000, ,976, Letters of Appointment as Administering Officer were not seen for the above. UNEMPLOYMENT RELIEF PROGRAMME OFFICE OF THE PRIME MINISTER Appointment of Administering Officer 4.55 Evidence of Appointment of the Administering Officer was not seen. Debit Card System 4.56 The contract with First Citizens Bank Limited with respect to the Debit Card System expired in A current contract giving the terms and conditions of this arrangement was not produced. Financial Statement 4.57 Signed Financial Statements were not received. Numerous errors and omissions were noted in the relevant documents submitted for audit. In addition, there was disagreement between corresponding figures in the underlying records. MINISTRY OF THE ENVIRONMENT AND WATER RESOURCES Maintenance of Records 4.58 A number of errors and omissions as well as differences between balances shown in the various accounting records were noted. Appointment of Administering Officer 4.59 Evidence of Appointment of the Administering Officer was not seen. Auditor General s Report 93

100 Chapter 4 Funds: Accounts of Administering Officers San Fernando City Corporation ROAD IMPROVEMENT FUND 4.60 Evidence was not seen that the unspent balance as at 30 th September, 2013 of $83, was remitted to the Comptroller of Accounts Commitments as at 30 th September, 2013 totalled $416, This amount represents commitments dating back to The bank account relating to this Fund is dormant. As at 30 th September, 2013 the balance on this account was $499, GREEN FUND - $3,252,186, The Green Fund was established under section 65 (1) of the Miscellaneous Taxes Act, Chapter 77:01 (the Act), which was amended by the Finance Act According to section 64 of the Act, the purpose of the Green Fund is to financially assist organizations and community groups that are primarily engaged in activities related to the remediation, reforestation and conservation of the environment Under section 62 (1) of the Act, the Board of Inland Revenue is charged with the collection of the Green Fund Levy On 26 th April, 2005, the Comptroller of Accounts established the accounting system for disbursement of funds from the Green Fund and in accordance with Cabinet s approval, a Green Fund Executing Unit was established in the then Ministry of Public Utilities and the Environment. With the realignment of Ministerial portfolios effective 25 th June, 2012, the responsibility for the Green Fund was transferred to the Ministry of Environment and Water Resources. On 18 th January, 2007, the Minister of Finance signed the Green Fund Regulations made under section 69 of the Act The Green Fund increased by $336,037, or 11.52% over the previous year s balance as follows: Balance as at 1 st October, 2012 $2,916,148, Green Fund Levy Collected $353,026, Interest on Cash Balances $21,083, Less Adjustments ($4,434,571.88) $369,674, Withdrawals ($33,637,034.00) Balance as at 30 th September, 2013 $3,252,186, TS 58 and TS 59 refer. Auditor General s Report 94

101 Chapter 4 Funds: Accounts of Administering Officers 4.67 A signed Financial Statement was not received in the Auditor General s Department from the Administering Officer of this Fund by the statutory deadline of 31 st January, San Fernando City Corporation 4.68 Authority from the Treasury Department was not seen for the opening of a bank account relating to the Green Fund A Memorandum of Understanding establishing the terms and conditions of the arrangements between the Ministry of the Environment and Water Resources and the San Fernando City Corporation was not produced for audit examination. An unsigned copy was provided. NATIONAL UNION OF GOVERNMENT AND FEDERATED WORKERS (NUGFW) TRAINING FUND - $7,488, The National Union of Government and Federated Workers (NUGFW) Training Fund was established under section 43(2) of the Exchequer and Audit Act, Chapter 69:01 by Legal Notice No. 280 dated 27 th September, 2004 to provide training and re-training of hourly, daily and weekly-rated workers of Central Government, the Tobago House of Assembly and certain Municipal Corporations where NUGFW is the certified bargaining agent The Chief Personnel Officer was appointed Administering Officer for the Fund with effect from 1 st October, The increase of $52, or 0.69% over the previous year s figure of $7,436, relates to interest received during the year There were no withdrawals from the Fund during the financial year TS 54 and TS 55 refer. GOVERNMENT ASSISTANCE FOR TUITION EXPENSES (GATE) FUND - $40,084, The Government Assistance for Tuition Expenses (GATE) Fund was established under section 43 (2) of the Exchequer and Audit Act, Chapter 69:01. Legal Notice No. 329 dated 9 th December, 2004 refers The balance in the Fund of $40,084, at 30 th September, 2013 decreased by $67,831, or 62.86% from the prior year balance of $107,916, due to an excess of payments over receipts. TS 56 and TS 57 refer The Financial Statement submitted by the Administering Officer did not include Notes as required by Comptroller of Accounts directives. Auditor General s Report 95

102 Chapter 4 Funds: Accounts of Administering Officers 4.77 Information supplied by the Ministry of Tertiary Education and Skills Training shows total spending on the GATE programme to date to be $4.5 billion, as follows: Fiscal Year No. of Students Fund Payments $ , ,193, , ,689, , ,771, , ,783, , ,913, , ,699, , ,997, , ,641, , ,116,316 4,524,804,689 CARICOM TRADE SUPPORT FUND - $39,771, The CARICOM Trade Support Fund was established under section 43(2) of the Exchequer and Audit Act, Chapter 69:01, (Legal Notice No. 13 dated 12 th January, 2005 refers.) The purpose of the Fund is to alleviate the adverse impact of the recessionary conditions on the economies of the Member States and to improve regional trade The balance in the Fund at 30 th September, 2013 was $39,771,787.95, an increase of $276, or 0.7% over the previous year s figure of $39,495, This represented interest earned for the financial year No monies were transferred from the Consolidated Fund into this Fund, neither were there any withdrawals from the Fund for the financial year Treasury Statements referenced TS 60 and TS 61 refer. CARICOM PETROLEUM FUND - $138,942, Cabinet in September, 2006 agreed inter alia, to the creation of a CARICOM Petroleum Fund under section 43(2) of the Exchequer and Audit Act, Chapter 69:01 to provide relief to CARICOM States in accordance with the criteria agreed to between the Heads of Government and the CARICOM Secretariat The criteria agreed to, according to the information provided, were poverty alleviation, disaster mitigation, disaster recovery efforts in emergency cases, national security and infrastructure development programmes in the Organisation of Eastern Caribbean States in very special circumstances. Auditor General s Report 96

103 Chapter 4 Funds: Accounts of Administering Officers 4.83 This Fund decreased by $129,619, or 48.26% from the previous year s figure of $268,562, Receipts comprised transfers from the Consolidated Fund totalling $100,000, and interest of $2,068, earned on cash balances Payments of $231,688, were made from the Fund towards the resolution of the British American Insurance Company Limited (BAICO) obligation to policyholders and depositors in the member states of the Eastern Caribbean Currency Union (ECCU) Treasury Statements TS 62 and TS 63 refer. Auditor General s Report 97

104 Auditor General s Report 98

105 CHAPTER 5 INTERNAL AUDIT FUNCTION IN GOVERNMENT MINISTRIES/DEPARTMENTS Auditor General s Report 99

106 Auditor General s Report 100

107 CHAPTER 5 INTERNAL AUDIT FUNCTION IN GOVERNMENT MINISTRIES/DEPARTMENTS GENERAL 5.1 Internal Audit is defined as an independent, objective assurance and consulting activity designed to add value and improve an organization s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance procedures Financial Regulation 13 (4) requires each Accounting Unit to have a check staff and an independent internal audit section. BENEFITS AND BEST PRACTICE 5.1 The internal audit function is a key component of the internal control system of any entity. An effective internal audit function contributes greatly to achieving and maintaining accountability and good governance and ultimately, to effective service delivery. 5.2 Critical elements for effectiveness of the function include objectivity and independence, adequacy and technical competence of staff, integrity of the audit process and related evidence as well as clear reporting and communication lines. 5.3 International Standards for the Professional Practice of Internal Auditing have been issued by the Institute of Internal Auditors and provide best practice guidance for the internal auditors. 5.4 Some standard areas of operation for internal audit are highlighted at Chart Source Website of Institute of Internal Auditors Auditor General s Report 101

108 Chapter 5 Internal Audit Function Chart 3: Typical Areas of Internal Audit Activity Internal Control Information Operations Laws and Regulations Organisational Risk Governance Analyse strengths, weaknesses and threats Detect opportunities for strengthening Evaluate the integrity of management information Examine individual financial components Evaluate the achievement of economy, efficiency and effectiveness in service delivery Detect non-compliance with legal, regulatory, budgetary, contractual and other obligations Aid in risk identification and assessment Review the adequacy of responses to identified risks Promote good governance principles by appropriate and effective communication FINDINGS OF REVIEW 5.5 Evaluations conducted at certain Ministries and Departments reveal common problems such as understaffing and assignment of internal audit resources to routine functions or diversion to non-audit duties or ad hoc assignments. As a result, audit coverage is often limited. 5.6 It was found that there is a need for training in internal auditing and related disciplines such as auditing in a computerised environment as well as Information Technology and Valuefor-Money auditing. Updated manuals and standard working papers are also needed to allow these units to function more effectively. Some reassessment of the calibre of staff assigned to the internal audit function as well as the qualifications required has also been suggested. Auditor General s Report 102

109 Chapter 5 Internal Audit Function 5.7 Arising from discussions with Internal Audit (IA) staff at various Ministries/Departments, the needs set out at Table 4 were identified. Ministry/Department Table 4: Internal Audit Needs Needs Identified Office of the President Formal training, an audit manual, timely implementation of recommendations. Office of the Prime Minister IA training. Ministry of Finance Inland Revenue Division Inclusion of major risk areas in audit plan, a customised audit manual, IT audit skills. Ministry of National Security Additional staff to cope with risk areas. Training in audit of IT, value for money and contracts and in report writing. Ministry of the Attorney General Additional staff to cope with routine calculations. Ministry of Legal Affairs IA training. Ministry of Food Production Increased number of auditor posts, IA training for junior staff. Ministry of Education Additional staff to cope with routine calculations such as grants to primary & secondary schools and pension & leave calculations. IA training. Ministry of Labour & Small & Micro Enterprise Development Additional staff to cope with risk area identified, documented work procedures. Ministry of Tourism Additional staff to cope with risk areas, Ministry of the People & Social Development Training in IT auditing and report writing. Ministry of Justice Additional staff to cope with increased workload, Query Register. Ministry of the Arts & Multiculturalism Additional Staff, formal training. Ministry of Sport Ministry of Works & Infrastructure Ministry of the Environment & Water Resources Additional staff to cope with risk areas. Additional staff to cope with size of Ministry, training in IT audit, value-for-money audit, contract audit and in report writing. Scheduling of posts, formal training. 5.8 Table 5 depicts the internal audit positions according to the approved establishment as compared with total staff on the establishment and the Revenue and Expenditure as well as Funds administered by each entity. Auditor General s Report 103

110 Chapter 5 Internal Audit Function MINISTRY / DEPARTMENT Table 5: Internal Audit Positions compared to Entity Resources Actual IA staff 15 Internal Audit Est. Total Entity Est. Revenue 2013 $000 Expenditure 2013 $000 Funds Administered 2013 $000 President ,499 0 Auditor General ,308 0 Judiciary , ,850 0 Industrial Court ,805 0 Parliament ,200 16,892 Service Commissions ,608 0 Statutory Authorities' Service Commission ,457 0 Elections & Boundaries Commission ,719 0 Tax Appeal Board ,167 0 Registration, Recognition & Certification Board ,428 0 Public Service Appeal Board ,884 0 Office of the Prime Minister , ,294 Tobago House of Assembly 0 2,583,493 19,000 Personnel Department ,200 0 Ministry of Finance & the Economy ,325,410 15,373,395 0 Ministry of National Security ,635 3,226, Ministry of the Attorney General , ,213 3,687 Ministry of Legal Affairs , ,071 0 Ministry of Food Production , ,895 8,286 Ministry of Education ,000 4,290, ,103 Ministry of Health ,939 4,273,696 43,869 Ministry of Labour & Small & Micro Enterprise Development ,961 3,189 Ministry of Public Administration , ,310 3,362 Ministry of Transport ,145 1,141,615 2,251 Ministry of Tourism ,516 16,414 Integrity Commission ,017 0 Environmental Commission ,460 0 Ministry of Public Utilities , , Figures included only for the internal audit units reviewed Auditor General s Report 104

111 Chapter 5 Internal Audit Function MINISTRY / DEPARTMENT Actual IA staff 15 Internal Audit Est. Total Entity Est. Revenue 2013 $000 Expenditure 2013 $000 Funds Administered 2013 $000 Ministry of Energy & Energy Affairs ,302,541 4,587, ,592 Ministry of Local Government ,134, ,717 Ministry of Trade, Industry & Investment , ,219 52,118 Ministry of the People & Social Development ,607,130 0 Ministry of Justice ,749 1,137 Ministry of Tobago Development ,469 0 Ministry of Housing, Land & Marine Affairs ,447 2,288,342 2,098,792 Ministry of Community Development ,221 39,887 Ministry of the Arts & Multiculturalism , , ,439 Trinidad & Tobago Police Service ,982 2,309, ,742 Ministry of Foreign Affairs , ,401 1,075 Ministry of Gender, Youth & Child Development Ministry of Planning & Sustainable Development , ,798 19,809 Ministry of Sport , , ,336 Ministry of Works & Infrastructure ,318, ,715 Ministry of Communications ,837 0 Ministry of the Environment & Water Resources Ministry of Tertiary Education & Skills Training ,144 2,851, , ,610, ,543 Ministry of Science & Technology ,510 0 Ministry of National Diversity & Social Integration ,568 1,230 Equal Opportunities Tribunal ,220 0 Totals 53,251,136 59,197,978 6,310,481 LONG-OUTSTANDING ISSUE 5.9 The state of the internal audit function in Ministries and Departments is a matter of grave concern and has been raised by the Auditor General on a number of occasions. As indicated in the 2011 and 2012 Auditor General s Reports, the 1987 Report of the Auditor General of the Republic of Trinidad and Tobago on a Comprehensive Audit on the Internal Audit Function in Auditor General s Report 105

112 Chapter 5 Internal Audit Function Government Ministries/Departments and Statutory Boards 16 outlined a number of recommendations for the strengthening of the internal audit function. Follow up reviews were performed in the years 1990 and 1994 and during the period October, 2009 to July, 2011 and major findings reported. However, the level of implementation of recommendations remains unsatisfactory. Recommendations to promote effectiveness in this area which were included in the 1987 Report (shown in Chart 4) continue to be applicable. Chart 4: Recommendations to Promote Internal Audit Effectiveness A. Appoint a central internal audit authority to: Establish/strengthen internal audit divisions. Establish a central internal audit unit to service the smaller ministries/departments or, as an interim measure, to service entities which do not have an internal audit division. Establish guidelines, standards and procedures. Prepare standard audit manuals. Monitor the operations of the internal audit divisions. Evaluate and report on the performance of internal audit divisions on a regular basis. B. For each internal audit division: Ensure that audit plans cover all areas of an agency s operations. Ensure that audit programmes are relevant to each area examined. Ensure that audit programmes are reviewed at regular intervals. Prepare time budgets for each assignment and analyse variances. Prepare financial budgets for the internal audit unit. Update job specifications and distribute to persons concerned. Ensure that check staff function is not a part of the internal audit duties. Cease interchanging of staff between the accounting and internal audit units. Minimize adverse effects of ad hoc assignment by careful planning and consideration. Provide adequate and competent staff. Provide adequate and relevant training including training in IT audits and auditing in an IT environment. Maintain a query register to deal promptly with audit queries. 16 Laid in the House of Representatives on 24 th April 1987 and in the Senate on 14 th April, Auditor General s Report 106

113 CHAPTER 6 THE ACCOUNTS OF THE TREASURY Auditor General s Report 107

114 Auditor General s Report 108

115 CHAPTER 6 ACCOUNTS OF THE TREASURY FINANCIAL STATEMENTS 6.1 Section 24 (1) (a) of the Exchequer and Audit Act, Chapter 69:01 as amended by the Financial Year Act, 1998 requires the Treasury to submit certain statements to the Auditor General within four months of the end of the financial year. With respect to the financial year ended 30 th September 2013, the Treasury Statements received on the 31 st January 2014 are included at the end of this Chapter and are referenced as TS 1 to TS 64. Comments on the examination of these Financial Statements follow. TREASURY STATEMENTS THE EXCHEQUER ACCOUNT - ($29,349,393,502.01) 6.2 The Exchequer Account is the bank account for the Consolidated Fund. According to the records of the Comptroller of Accounts as at 30 th September, 2013, the Exchequer Account was overdrawn by ($29,349,393,502.01) which was an increase of ($5,868,120,774.35) or 24.9% when compared to the previous year s figure of ($23,481,272,727.66) (TS 2 to TS 6 refer). This occurred because payments once again exceeded receipts in the financial year 2013 as shown below: Financial Year 2013 Financial Year 2012 $ $ Receipts 53,342,766, ,350,086, Less: Payments (59,210,886,873.33) (55,702,520,788.06) (5,868,120,774.35) (3,352,434,543.14) Balance b/f from previous financial year (23,481,272,727.66) (20,128,838,184.52) Balance as at 30 th September (29,349,393,502.01) (23,481,272,727.66) 6.3 The overdrawn balance of ($29,349,393,502.01) as at 30 th September, 2013 according to the records of the Treasury was satisfactorily reconciled with the debit balance of Auditor General s Report 109

116 Billions of Dollars Chapter 6 Accounts of the Treasury ($30,769,959,557.92) confirmed by the Central Bank of Trinidad and Tobago. (TS 3 refers). The year end balances from 2009 to 2013 are depicted in Chart 5. Chart 5: Overdrawn Balances on Exchequer Account 2009 to 2013 ($5B) ($10B) ($15B) ($20B) ($25B) ($30B) Balance ($10.789B) ($13.194B) ($20.129B) ($23.481B) ($29.349B) Auditor General s Report 110

117 Billions of Dollars Chapter 6 Accounts of the Treasury PUBLIC DEBT - $46,220,118, The Public Debt Statement reflects the outstanding balances on existing loans. The records of the Treasury showed that at 30 th September, 2013 the Public Debt was $46,220,118, (2012: $45,422,880,165.17). This balance comprises local and external loans, as well as loans and debts serviced under guarantees and letters of comfort (under Head 18). Comparisons from 2009 to 2013 are represented in Chart 6 while Changes in the Public Debt composition are summarized in Table 6. Chart 6: Movements in Composition of Public Debt 2009 to Loans Serviced Under Head External Loans Local Loans Auditor General s Report 111

118 Chapter 6 Accounts of the Treasury Table 6: Summary of Changes in the Public Debt Local Loans External Loans Serviced Under Head 18 Total $000 $000 $000 $000 Balance as at 1 st October, ,431,628 10,583,290 3,407,962 45,422,880 Add: New Bonds 6,689, ,689,168 Disbursements 1,549, , ,989,852 Less: Repayments (1,240,203) (595,826) (593,998) (2,430,027) Foreign Exchange 0 (182,932) 0 (182,932) Adjustments (4,221,969) (1,046,854) 0 (5,268,823) Balance as at 30 th September, ,207,763 9,198,391 2,813,964 46,220,118 Net Increase/(Decrease) 2,776,135 (1,384,899) (593,998) 797,238 % Increase/(Decrease) 8.83 (13.08) (17.42) There was an overall increase of $797,237, or 1.75% in the balance representing the Public Debt at 30 th September, 2013 due mainly to domestic bond issues and adjustments during the year as discussed below. Local Loans - $34,207,762, The net increase in Local Loans of $2,776,134, or 8.8% during the year resulted primarily from new bond issues partly offset by repayments. Movements in Local Loans for the financial year ended 30 th September, 2013, as reflected in the records of the Treasury are as follows: $000 $000 Balance as at 1 st October, ,431,628 Add: Receipts GORTT $1B 2.60% Fixed Rate Bonds 1,000,000 GORTT $1B 2.50% Fixed Rate Bonds 559,271 GORTT $5.1B 4.20%/4.25% Fixed Rate Bonds due 2032/2037 5,100,000 GORTT $29.897M 3.75% 5 Year Bond due ,897 GORTT $1.5B 4.00% 15 Year Fixed Rate Bond due ,500,000 Disbursements (Interest Capitalization) 49,138 Total Receipts 8,238,306 Less: Repayments Head 19: Charges on Public Debt (715,203) Head 112/17 (Sinking Fund) (525,000) Total Payments (1,240,203) Less: Adjustments (4,221,968) Balance as at 30 th September ,207,763 Auditor General s Report 112

119 Chapter 6 Accounts of the Treasury External Loans - $9,198,390, There was a decrease in External Loans of $1,384,898, or 13% from the previous year s figure. A summary of transactions in respect of External loans is given below: $ $ Balance as at 1 st October, ,583,289, Add: Receipts for Financial Year ,713, Foreign Exchange Adjustment (182,932,177.15) 00 Total Receipts 257,781, Sub Total 10,841,071, Less: Repayments for Financial Year 2013 (595,826,186.93) 00 Less: Arbitration Settlement (Termination of OPV Contracts) (1,046,583,923.66) 00 Total Repayments (1,642,410,110.59) Understatement due to arithmetic error (270,000.00) Balance as at 30 th September ,198,390, Receipts - $440,713, A schedule to support this amount was not provided for audit. As a result, the composition of External Loan Receipts was not determined. Loans Serviced Under Head 18 - Ministry of Finance - $2,813,964, Loans Serviced Under Head 18 relate to amounts outstanding on loans which were secured by Letters of Comfort or which were guaranteed by the State for some State Enterprises and which were not serviced by the entity. These loans are being repaid by the Government of Trinidad and Tobago. Movements in these loans according to the records of the Treasury are reflected below: $ Balance as at 1 st October, ,407,962, Less: Repayments for 2013 (593,998,010.24) Balance as at 30 th September, ,813,964, There were no new loans for the period under review. Auditor General s Report 113

120 Chapter 6 Accounts of the Treasury CHARGES ON ACCOUNT OF THE PUBLIC DEBT- $4,530,499, Expenditure relating to Public Debt servicing decreased by $133,155, or 2.86% when compared to the previous financial year. Details are given below: Principal Repayments Principal Repayments - Local Loans 715,203, ,286, Principal Repayments - Foreign Loans 595,826, ,511, ,311,029, ,797, Interest Payments Interest Payments - Local Loans 846,561, ,882, Interest Payments - Foreign Loans 371,401, ,177, Interest Payments - Notes, Debentures and Others 878,241, ,288,154, ,096,205, ,288,215, Other Payments Management Expenses 15,810, ,484, Sinking Fund Contributions 923,179, ,021,723, Discounts and Other Financial Instruments 183,494, ,967, Expenses of Issues 780, , $ 2012 $ 1,123,265, ,406,642, GRAND TOTAL 4,530,499, ,663,655, Charges on Account of the Public Debt as a Percentage of Total Expenditure and as a Percentage of Total Revenue for the Financial Years 2009 to 2013 are shown below: Year Charges on Account of the Public Debt Total Revenue Charges as a Percentage of Total Revenue Total Expenditure Charges as a Percentage of Total Expenditure 2009 $4.95B $37.56B 13.18% $45.33B 10.93% 2010 $4.76B $42.3B 11.24% $46.11B 10.31% 2011 $5.87B $45.61B 12.87% $54.47B 10.78% 2012 $4.66B $47.62B 9.79% $55.7B 8.37% 2013 $4.53B $50.73B 8.93% $59.2B 7.65% Auditor General s Report 114

121 Chapter 6 Accounts of the Treasury STATEMENT OF LOANS FROM GENERAL REVENUE REPAYABLE TO THE GOVERNMENT OF TRINIDAD AND TOBAGO Loans From General Revenue - $1,909,122, There was a net increase of $105,393, or 6% in this balance from the previous year. Movements during the financial year are summarised below: $ $ Balance brought forward 1 st October, ,803,729, Add: New Loans Government of Grenada 96,321, Government of St. Lucia 11,055, Less: Principal Repayments 107,376, Government of Barbados (1,982,226.42) Total Loans from General Revenue at 30 th September, ,909,122, Chart 7 below shows year-end loan balances for the financial years 2009 to 2013 according to the various categories. Chart 7: Comparison of Year-End Loan Balances for Financial Years 2009 to % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Other Governments $127.23M $192.95M $185.13M $183.15M $288.55M Other Entities $123.16M $114.57M $114.57M $114.56M $114.56M Statutory Bodies $ M $ M $ M $ M $ M Auditor General s Report 115

122 Chapter 6 Accounts of the Treasury 6.13 As mentioned in the Auditor s Report at page 5, a number of loans totalling $1,747,350, are not being serviced by borrowers. Some of these non-performing loans are highlighted in the table below: Borrower Government of Grenada Amount of Loan TT $ Balance Outstanding as at 30/09/13 TT $ 103,938, ,102, Remarks Loan dated December Proposed repayment to start 28 th February, Last repayment made 1 st September, Government of 23,279, ,279, Dominica Loan dated August Government of Antigua and Barbuda 9,720, ,058, Proposed date to initiate repayment 31 st December Government of Antigua and Barbuda 13,444, ,187, Proposed date to initiate repayment 31 st December Government of Antigua and Barbuda 13,583, ,187, Proposed date to initiate repayment 30 th June Government of St. Vincent and the Grenadines 9,602, ,936, Proposed date to initiate repayment 31 st December Government of St. Vincent and the Grenadines 13,444, ,187, Proposed date to initiate repayment 31 st December TT POST 71,838, ,392, No repayment has been made to date. The loan contract was not produced for audit Loans which are not being serviced also include the following: Port Authority of Trinidad and Tobago (to be converted to equity by Cabinet authority dated 5 th December, 2002) in the amount of $1,101,726, Trinidad and Tobago Electricity Commission in the amount of $404,291, which was also proposed to be converted to equity National Energy Skills Centre in the amount of $42,718, in respect of which the loan contract and relevant terms and conditions for repayment were not produced. Action should be taken with respect to these amounts In addition, terms and conditions for repayment of a loan of $23.3 million to the Government of Dominica and a loan amount of $121.9 million to Trinidad and Tobago Electricity Commission were not produced Treasury Statements referenced TS 15 to TS 20 are relevant. Auditor General s Report 116

123 Chapter 6 Accounts of the Treasury STATEMENT OF REVENUE Total Revenue Collected - $53,251,532, Actual revenue collected for the financial year 2013 as shown by the records of the Treasury was $53,251,532, TS 21 refers. Chart 8 shows revenue collected for the financial year 2013 by classification. Chart 8: Actual Revenue Collected by Classification for the Financial Year 2013 Non-Tax Revenue, $ M 14.31% Capital Receipts, $501.43M 0.94% Financing, $ M 3.79% Tax Revenue, $ M 80.95% Comparison of Revenue Collected for the Financial Years 2012 and The Actual Revenue for the financial years 2012 and 2013 when compared revealed the following: There was an overall increase of $939,454, in revenue collected in the financial year 2013 Tax Revenue increased by $1,146,196, Non-Tax Revenue increased by $1,962,070, There was an increase in Capital Receipts of $457,986, Borrowings decreased by $2,626,799, Table 7 which follows shows the relationship between Financing (Borrowings) and Total Revenue over the financial years 2009 to Auditor General s Report 117