Inadequate financial controls left the Pedro St. James tourism attraction open to the possibility that misappropriation of company fuel accounts may have occurred between mid-2003 and early 2007.
Auditor General Dan Duguay said a review by his office found the total amount spent by Pedro St. James staff on fuel during that period, $18,583.16, was not appropriately accounted for.
“This is not a large amount of money, but it’s significant when government expenditures are involved, and few controls are in place,” Mr. Duguay said. “It all adds up.”
Mr. Duguay’s report on the issue made no specific accusation of funds actually being misappropriated from the fuel charge account and he did not refer the matter to police. However, he noted that some $6,033.71 was charged in cases where illegible signatures had been left on fuel charge records.
“Granting employees permission to charge fuel to a company account with the only requirement being a signature opens up considerable risk of misappropriation,” Mr. Duguay said.
The audit office analysis found that average monthly charges for fuel by Pedro staff went from $242 per month in 2003 to $677 per month in 2006.
“The analysis confirms that the level of fuel charges dramatically increase following the write off on the company vehicle in December 2004,” the auditor’s report stated. “It also must be pointed out that concerns surrounding the usage of the fuel charge account were raised by management of the Tourism Attraction Board in February 2007 and it is from that point that a decline in usage was noted.”
The Tourism Attraction Board is the government-appointed entity that oversees the operation of Pedro St James, the Queen Elizabeth II Botanic Park, the Cayman Craft Market, the annual Pirates Week Festival, and the West Bay neighbourhood made famous by its nickname, Hell.
In response to the auditor general’s report, Pedro St. James management did confirm it had a gas account with the Texaco station in Savannah-Newlands. It said verification of signatures on the account was never fully discussed with Pedro management and that managers could identify signatures on the records even if the auditor’s office could not.
“The general manager received the charges and is comfortable with the signatures on the records,” the audit report quotes Pedro managers as saying.
The gasoline charges increase from 2003 to 2006 occurred for three reasons, according to Pedro St. James officials.
First, rentals for events held during that period had to be picked up and returned. The write off of the company vehicle in 2004 meant Pedro employees, in particular the general manager had to use their own vehicles for the pick ups and get reimbursed for fuel. Second, the truck being used most of the time was much larger than the old company truck and used more gas. Third, more trucking to the Pedro Castle site was being done at that time.
The Tourism Attraction Board disputed many of these claims in the auditor’s report.
“What proof was presented to substantiate this claim?” the board is quoted in the report as saying. “There was definitely no supervision or attempt to prevent possible wastage and abuse of government resources. The GM (general manager) abused the system and allowed his subordinates to do likewise.”
Pedro GM Dennie Ebanks denied that there was abuse of the system and said that the gas charge account was simply used to pay back employees who had used their own personal vehicles for company business.
However, Mr. Duguay noted that everyone agreed there was no system in place to account for that.
“We noted that there was no established set of policies and procedures in place at Pedro in relation to the charging of gas,” Mr. Duguay wrote in his report. “This was reiterated by (the Pedro staff members who were interviewed).”