Bank of Jamaica audit unearths concerns

$51.5M loan is questioned

KINGSTON, Jamaica – The Bank of Jamaica is preparing to answer questions about fiscal prudence that have been levelled against it in a damning document penned by the auditor general after a review was conducted into its affairs.

Among the issues highlighted by the auditor general during the audit inspection are loans totalling $51.5 million made to the bank’s governor – Derick Latibeaudiere.

According to the report, which was sent to the governor on September 15 and copied to the financial secretary and the minister of finance, the loans were used to “clear a loan at the Bank of Nova Scotia and to finance the construction of a new residence”.

Late yesterday, Latibeaudiere told The Gleaner he could not comment on the contents of the document because the bank must “adhere to proper processes” by responding in writing to the relevant stakeholders.

“The bank is in the process of responding to the auditor general and the minister of finance,” he said.

Routine exercise

Auditor General Pamela Monroe-Ellis told The Gleaner she could not publicly address the specific issues raised in the document at this time.

“It (the document) is with the intended reader, I await the response. This stage of the audit report is a part of our verification process as well, so to speak to the matter at this stage would be somewhat premature,” she said.

However, Monroe-Ellis revealed that the audit into the affairs of the central bank was a routine exercise.

“We do a number of agencies each year and the BoJ came up this year on the audit plan,” she explained.

Finance Minister Audley Shaw was also reluctant to address the issues raised in the document.

“It’s called an audit query. I cannot as cannot as minister make a comment on the report at this time because there is a process. The process is that there has to be a response from the institu-tion to (the) auditor general,” Shaw said.

“That’s how the system works. The fair and due process is that the bank has to respond to the auditor general.”

Among other issues, the report also called into question the circum-stances under which 15 senior executive officers at the bank were reportedly paid upkeep allowance totalling $6.7 million in addition to being assigned motor vehicles for which the bank undertook the payment and purchase of insurance, petrol, distilled water, oil and maintenance.

Hindering the review

The bank’s management indicated that this arrangement represented partial maintenance, but the auditor general stated in the report that the government’s Revised Comprehensive Motor Vehicle Policy for the Public Sector lists the aforementioned services as those related to a fully maintained motor vehicle.

In the report, the auditor general lamented that a refusal to furnish her team with the governor’s personal file hindered the audit review. Personal files are needed to audit the emoluments of employees and they contain information that guides the audit review and assists the auditors in determining whether all personnel activities are carried out in keeping with stipulated guide-lines. Only extracts of Governor Latibeaudiere’s personal file were provided, the report said.

“This frustrated the audit objective of seeking to determine the propriety of emoluments paid and benefits awarded. As indicated earlier, this limited the scope of the audit and revealed a lack of transparency,” read a section of the report.

The report also decried “the bureaucracy which was instituted by the Bank of Jamaica for the purpose of obtaining audit-required information, whether verbal or documented, did not facilitate the staff in concluding the audit exercise in an efficient manner”.

The audit scope included the accounting records and transactions for the period January 2007 to March 2008.