The report submitted to the Mayor and City Councillors (M&CC) by the Auditor General (AG) has revealed serious breaches of regulations and protocol by the administration of the municipality, particularly within the Treasurer’s Department.
The audit examined several areas: wages and salaries, for which records are not being maintained; officers being given payment in lieu of leave without proper authority or approval; advances and loans to officers; deduction of officers’ deposits; bank reconciliation statements; assessment and collection of rates and taxes and information systems costs.
The AG’s report noted that amendments could be made to City Hall’s payroll by anyone with access to the system since proper procedures were not followed in the updating of the ‘pay changes register’ which was not always viewed by all the relevant accounting officers.
Changes to the payroll are supposed to be taken to the data entry clerk in the Treasurer’s Department for updating and processing of the payroll. However, the audit revealed that the officer making changes to the ‘pay changes register’ was making changes to the database for the processing of the payroll.
City Treasurer Roderick Edinboro could not give a plausible explanation why this was so but said that he would make periodical checks although he could not say what form these checks would take. According to Edinboro any changes to the payroll were verified. However, it was not clear who was responsible for the verification and final changes since several persons have access to it, including the treasurer, the accounting manager, the personnel officer, the accounts supervisor and the data entry clerk.
Moreover, the audit found that all the functions of the City Treasurer’s Department were de-linked from the central server and were operating from a separate server in the Treasurer’s Department. Edinboro said the move was owing to the slow information flow from the central server (located in the Information Technology Department) to the Treasurer’s Department.
Overpayments
Further evidence, according to the report, showed that a number of officers were being overpaid, including a clerk II in the Accounts Department who was appointed to act as accounting manager and was approved by the full council to work from February 1, 2006 to April 30, 2006. To date the clerk is still in the acting position although approval was not sought for her to continue. Further she had taken 28 days leave last year September and was still paid an acting allowance which means that she was overpaid $26,026 for the period she was on leave, something for which the treasurer could not give an explanation.
In addition both the accounts supervisor and another clerk II who performed extra duties when the city treasurer and accounting supervisor were on leave were paid responsibility allowances in excess of what was stipulated by the full council.
It was also found that a number of officers were paid excess amounts of taxable allowances when compared to the schedule of approved taxable allowances provided in support of the pay sheet. Also, in 2007, 122 salary advances totalling $4,895,180 were issued to officers but applications for 15 officers who were issued a total of $675,000 were not seen.
Further examinations also revealed that nine senior officers on the executive pay sheet were paid $1,371,171 in lieu of leave during 2007 and 2008. The report said these payments should not have occurred since there was an existing policy that all leave earned should be taken within the year or be forfeited. If the need arose to pay in lieu of leave then approval of the full council should be sought but this was not done in any of the cases.
The audit found too that granting of loans and advances to officers was done in an ad-hoc manner, following no proper procedures and this was evidence of a lack of “due care and diligence” by the town clerk and city treasurer.
Defraud
The report also stated that the apathetic way in which things were being done showed attempts to “defraud the council,” and this was especially indicated by changes in the ‘pay changes register’ with no updates to reflect deductions made and advances granted without full approval from the council.
Rates and Taxes
The audit was unable to determine whether taxpayers were paying the correct amount or too much, since the rates software programme was not working properly. Also, the investigation could not determine whether the closing balance on the manual card system used before the implementation of the automated system was also used as the opening balance in the new system since repeated requests for the opening balances were futile and neither the treasurer nor the systems analyst could clarify whether both balances were the same.
The report said further investigations proved that customers were served with demand notices for one amount and when they turned up to pay a new demand notice was issued.
The report said the council should make a special effort to review the automated system and to ensure that the information in the master database was accurate. Efforts should also be made to recover underpayments of rates and taxes and to refund for overpayment since it was evident that both have occurred.
The report said that reconciliations of bank accounts prepared by the council were not checked or properly certified and council’s bank accounts examined. The General Fund in particular, showed that money was not being banked promptly and the city treasurer could not clarify whether some sums recorded as deposits in transit were actually deposited or used.
The Audit Office strongly recommended that bank accounts be checked and an investigation launched into the amounts recorded as ‘deposit in transit.’ It recommended also that “stale dated cheques be written back into the cash book.”
On information costs, the report states that it is obvious that the IT Department is being bypassed in terms of the buying and testing of software and hardware. It recommended that the department take up its rightful place to ensure compatibility of the products.
The investigation done by the AG’s office was in line with many others done previously. But according to Deputy Mayor Robert Williams in a meeting held on Tuesday, the administration has repeatedly shown disregard for the recommendations approved by the council after the various consultations done in the past.
Councillors were very vocal at the said meeting, and there was one calling for the matter to be brought to the attention of the police, saying that the report showed serious irregularities and “blatant misuse of taxpayers’ money.”
It was decided that a delegation be set up to meet Minister of Local Govern-ment Kellawan Lall to discuss the report. A preliminary meeting was held on Wednesday.
Meanwhile, Town Clerk Beulah Williams had said after Tuesday’s meeting that everything she had done was within her scope and in accordance with the authority given to her in the Municipal and District Councils Act. She said several of the areas examined were emoluments approved and authorised by her, which do not go to the council.
Defending paying officers for leave not taken, the Town Clerk said that in 2006 a number of officers had proceeded on leave.
At the end of that year, the municipality was plagued with a number of issues including no lights. Williams said the Mayor then pinned the problems on the leave taken by her and the officers saying that they had proceeded on vacation leaving the council in shambles.
Williams said she vowed that such a situation would not recur and paid some officers for one month’s leave when they were owed 42 days instead.
“I agree it shouldn’t have happened but these were extreme situations,” Williams told Stabroek News, adding that the salary increases given were also within her jurisdiction.
She also said that the AG’s investigation, in her opinion, did not discover any fraud as was being suggested by councillors; rather it discovered “systemic weaknesses” that officers were working on.
