Exchequer Account overdrawn by $41.4b | Local Business


IN 2019, T&T’s Exchequer Account was overdrawn by $41,380,061,388.10.

Its an increase of $1.134 billion or 2.82 per cent when compared with the previous year’s balance of $40,246,393,438.68.

The account, which is the bank account for the Consolidated Fund, has been consistently in overdraft since 2003, according to the published accounts of the Auditor General for the period October 1, 2018 to September 30, 2019. The Exchequer Account fluctuates on a daily basis depending on Government’s receipts and expenditures.

The report is dated April 29, 2020 and was laid in Parliament last Friday.

“The issue of the public debt and debt sustainability has long been a concern for policy makers of both fiscal and monetary authority. The central government debt and contingent liability must be examined and analysed in it’s entirely to ensure present and future debt sustainability.

“It is important for overall macro-economic policy to manage the debt and it needs to be coordinated closely with fiscal, monetary and other macro-economic and financial policies. For this reason, debt managers and fiscal and monetary authorities should share an understanding of the objectives of debt, fiscal and monetary policies, given the independence among the policy instruments. Close coordination is needed to choose an appropriate mix of financing and policy adjustment to facilitate economic recovery while preventing the build-up of an unsustainable debt burden,” noted Comptroller of Accounts Catherine Laban. The Comptroller of Accounts is the most senior public servant in the Treasury Division of the Ministry of Finance.

The report noted that the cash basis of consolidated statement of assets and liabilities was restated to the International Public Sector Accounting Standard (IPSAS), Financial Reporting under the Cash Basis of Accounting format.

“This presentation uses the concepts and accounting standards of the cash basis of accounting. As a result, the Exchequer Account, which was previously reported under assets is now reported as a current liability due to its overdrawn status,” it said.

No audit of Board of Inland Revenue

Despite being one of the state’s major revenue earners, the Board of Inland Revenue (BIR) is still not being audited by the Auditor General.

Since 2013, the Auditor General has raised concerns that it is unable to properly audit the Board of Inland Revenue, which is also a division of the Ministry of Finance.

Auditor General Lorelly Pujadas noted that the interpretation of Section 4 of the Income Tax Act, Chapter 75:01 has continued to pose a challenge to the audit of revenues at the Inland Revenue Division.

“The Attorney General in 2015, assured the Auditor General that the necessary steps were being taken to ensure that the Auditor General’s access to the information could be facilitated.

“Following the recommendations of the Public Accounts Committee in the first quarter of 2017, the chairman of the Board of Inland Revenue and the Auditor General met on several occasions during the course of the financial years 2017 and 2018 under the auspices of the Ministry of the Attorney General and Legal Affairs.

“The Auditor General submitted proposals for the consideration of the Attorney General. However, these proposals were not accepted by the Board of Inland Revenue. The Auditor General has always maintained that it has a legal right to access the information and due to the inability of the parties involved to come to a consensus, the Auditor General in 2019 and 2020 requested the Attorney General to file an interpretation summons for the interpretation of section 4 of the Income Tax Act. To date, the matter remains unresolved,” the report said.

As with previous years, the 2019 report again revealed that financial regulations and instructions continue to be flouted by Ministries, the state of the internal audit function in the Government remains a matter of concern as well as the issue of overpayments by ministries.

Energy earnings

The 2019 report listed the earnings of T&T from production sharing contracts in the energy sector.

It noted that the Government of the Republic of Trinidad and Tobago is entitled to a share of the production of natural gas and crude oil from the operations of the contractors.

“From this share of production, the Minister of Energy and Energy Industries is responsible for meeting the respective contractor’s tax and similar financial obligations to the Government. Total payments made to the Board of Inland Revenue in respect of the financial year 2019 is $2,521,465,625. Revenue collection increased by 179 per cent when compared to the receipts collected in the financial year 2018,” it noted.

Details of payments made in the financial year 2019 are shown below:-

DATE AMOUNT

31/12/2018 $259,987,562.00

14/05/2019 $439,889,230.00

08/07/2019 $450,087,473.00

24/07/2019 $303,251,143.00

26/09/2019 $283,475,608.00

26/09/2019 $574,817,968.00

26/09/2019 $209,956,641.00

TOTAL $2,521,465,625.00

(BOX Story)

Carifesta XIV 2019

The Auditor General raised several issues with regard to the expenditure at Carifesta which took place in August 2019.

It also noted that expenditure was beyond the budgeted amount of $28,400,000, by an amount of $12,337,146.79.

It noted that items purchased by the Information Technology Department (IT) for Carifesta namely, 60 wi-fi dongles and two other items of inventory as seen in the Vote Book were not recorded on the listing of items returned to the Ministry nor was it seen to be recorded in the Inventory Register.

“There appeared to be a lack of control with regard to the issuing of invoice orders for payments under CARIFESTA.

A sample of 12 invoice orders examined revealed the following:

i. Information on the invoice orders such as name and address of supplier, description of goods were not fully entered on all the invoice orders.

ii. There were five instances where all three copies of invoice orders were seen in the Invoice Order Book. These were not cancelled and were subsequently paid using an ‘Other Charges Voucher’.

iii. There were three instances where invoice orders were committed in the Vote Book, without sufficient releases to cover the committed expenses.

iv. Outstanding invoices were seen however, commitments were not seen recorded in the Vote Book. Total Expenditure of $28,381,830.44 added to bills on hand of $12,355,316.35 was in excess of the 2018/2019 Allocation of $28,400,000.00 by an amount of $12,337,146.79,” the report noted.

Last week, the Government said that outstanding payments for artists and suppliers of the 2019 Carifesta event should be paid by June 2020.

The total sum outstanding is about $1.8 million.

“The actual sums owed to suppliers and artistes after the staging of CARIFESTA 2019, based on invoices received by the Ministry of Community Development, Culture and the Arts, is $1,873,176.60,” said Minister of Agriculture, Land and Fisheries Clarence Rambharat, on behalf of Minister of Community Development, Culture and the Arts, Dr Nyan Gadbsy-Dolly.

“A variety of factors are involved. One is the timing of this…Carifesta was held very close to the end of the last fiscal year so that some payments. If invoices were received and processed before the end of the last fiscal year, those would have been processed and those invoices that were received after the start of the new fiscal year would have been in a position to be processed (around) October/November last year.

“The second factor would have been the actual receipt of the invoices and dealing with any queries and additional information required on these invoices. The rules of the public service in relation to the Exchequer and Audit Act puts a responsibility on public servants, in particular Permanent Secretaries, to verify payments which are required.”

“And thirdly, the process of requesting releases and ensuring that funds are available to allow the Comptroller to authorise the printing of the cheques and issue of the cheques to the persons,” he had said.





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