Legal Affairs urged to get tough on defaulting First Federation tenants

Members of the Public Accounts Committee (PAC) told a team from the Ministry of Legal Affairs that stronger measures should be taken to remove 30 tenants of the First Federation Building—17 of whom had tenancy agreements which expired since 1991, and 13 of whom never had agreements, and who owed rent amounting to the sum of $1.246 million.

The suggestion was made at yesterday’s meeting of the PAC, which continued to review the 2010 Report of the Auditor General.

PAC Chairman Carl Greenidge took the opportunity to suggest that the ministry seek proper advice on better management of the building, since it was “exercising poor management of the premises.” In response to these statements, the Permanent Secretary (PS) of the ministry explained that several letters were written to the tenants but they have not been responsive. When asked if legal action was ever considered to force compliance, the PS stated that the ministry had decided to hold off on moving to the courts because they wanted to give the individuals the opportunity to come forward and make payments, as some of them have done.

She also stated that the ministry was being very cautions in attempting to settle the matter due to the fact that many of the tenants occupying the building were lawyers. She stated that the ministry did not want to risk the possibility of being sued for breach of contract or anything of the sort.

The Auditor General’s Report did state that of the amounts owed the ministry, it has been able to collect $248,000, leaving a deficit of $917,000. It added that letters were written by the Attorney General in 2012 for a settlement of the debts.

The ministry provided a document which stated that acting on the advice of Attorney General Anil Nandlall, letters dated May 14, 2012 were written to the defaulting occupants of the First Federation Building with regard to liquidating their indebtedness for rent owed for their occupancy of the rooms in the building. The document further stated that some persons came forwards to make payments and that to date $580,000 was paid. As a result, the figure being provided by the Auditor General’s Report contradicted statements being made by the Ministry of Legal Affairs.

The team was also asked to answer questions concerning respective un-reconciled amounts totaling $10.55 million and $297,583, which were revealed by the State Solicitor and Official Bank Accounts.

A representative for the ministry said that a new cash book had to be created due to the fact that the old one could not be located. As a result, much of the old information was not included in the new book. She stated that this caused the amounts mentioned earlier to appear as being un-reconciled.

In the ministry’s response to the Auditor General’s report, it was stated that there was an un-reconciled difference of $12.904 million and $301.583 stated in the reconciliation as at December for account numbers 120 and 130, respectively, and that efforts were being made to reduce or eliminate these mounts; however, this was not achieved due to unavailability of receipts.

It was pointed out that once again, the figures provided by the Auditor General’s Report clashed with what was contained in the ministry’s report. The ministry explained that the $2.354 million is from a cheque that was sent to the Ministry of Finance to be updated, and subsequently deposited.  The accountant stated that when she joined the institution in 2011, she met the cheque, which was already dated, and made a request for its updating. The cheque was sent to the Finance Ministry, and subsequently the Accountant General. Nothing has changed since.

The Accountant General stated that the change was not made because he saw it pointless to update a cheque if the ministry had no intention of paying it out. Officials of the ministry admitted that because of the time that has elapsed, they are unsure exactly who was supposed to receive the cheque, which means that the funds would be disbursed in to the funds intended for the ministry itself.

PPP/C MP Gail Teixeira made an enquiry of the Auditor General as to why the difference of millions was not included in the report that he submitted. He stated that the figure was omitted because he assumed that the cheque would have been updated and regularised.

The Auditor General’s Report also stated that the ministry incurred losses due to companies that defaulted or failed to file annual returns.

The ministry in its response stated that notices were sent out to defaulting companies, informing them that if payments were not made by a stipulated time, they would be struck from the list of registered companies. The PS stated that the aspect of the recovery of the money was a matter for the Guyana Revenue Authority (GRA). She shared that once struck form the register, companies must remain unregistered until their books are in order, after which they would be allowed to re-register at the cost of $800.

On this matter, several committee members made suggestions that the registration cost should be increased to serve as deterrence to this kind of behaviour by companies.

The PS said that the ministry is looking to be able to punish companies who default on their obligations in this regard on a continuous basis. The ministry’s report stated that it has since been able to recover $236,000.

The ministry also faced question about seven officers who had been overpaid net salaries and related deductions totaling $201,802. The ministry’s response to the Auditor General’s finding stated that letters were sent to ex-employees requesting repayment of the amounts overpaid and relevant deductions from various agencies refunded.

Specific amounts overpaid included $43,659 to a former Accounts Clerk II, $43,129 to a former driver, $121,358 to a former State Counsel and $262,604 to a former Parliamentary Counsel

Representatives from the ministry indicated that these could not be located, which is making recollection very difficult, and no recoveries have been made to date.

As it relates to the issue, PPP/C MP Odinga Lumumba suggested that considering the amount, he believes all that can be done is to urge the institution to become more aggressive in the attempt to recover these funds, and make a report of their progress when next they appear before the PAC.


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