Latest Auditor General report points to continuing abuse of Contingencies Fund

The Contingencies Fund continues to be abused with $510 million withdrawn from the fund in 2013 for ventures that did not meet the criteria.

In the Auditor-General’s report for 2013 which was laid in the National Assembly yesterday, Auditor-General Deodat Sharma noted that in his previous reports, he had highlighted instances where the criteria were not fully met for advances issued from the Contingencies Fund as defined in Section 41 (3) of the FMA Act.

“While it has been observed that there has been closer monitoring of these advances, the situation still existed and for the year under review, three advances totalling $510M were issued that did not meet the criteria,” he said.

He also noted that a number of Ministries, Departments and Regions continued to clear cheque-ordered vouchers long after the stipulated time frame of 16 days. At the time of reporting, 2368 cheque orders totalling $1.209 billion remained outstanding. Of this amount, 553 cheque orders totalling $402.049 million were in relation to 2013, while the remaining 1815 totalling $807.101 million were in relation to prior periods.

“It should be noted that failure to clear these financial instruments within the stipulated time frame would bring into question whether the sums involved have been used for the purposes intended,” Sharma said. The AG report also revealed that in 2013, overpayments amounting to $22.148 million were made on measured works on various contracts administered by Ministries, Departments and Regions. The biggest delinquents were the Ministry of Tourism, Industry and Commerce with overpayments of $4.8 million, the Ministry of Home Affairs with $12.4 million in overpayments and Region 6 with overpayments of $2.6 million.

In addition, there were also overpayments on contract works administered in prior periods, which amounted to $187.184 million. “It was reported that several of these entities are facing serious challenges in recovering the amounts overpaid. This continued trend coupled with no evidence to suggest that disciplinary action of any kind had been meted out to engineering or other staff involved in the assessment of works in progress and the certification of progress payments is troubling and hints at Management’s perceived inaction to remedy the current situation,” the report said.

The report should have been tabled since last year but got snagged by the prorogation of Parliament in November.

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