Blatant disregard!

Public entities fail to transfer Gov't shares

Senior staff reporter

Thursday, May 24, 2018

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PUBLIC entities have mostly disregarded a directive from the Cabinet Office, which five years ago advised permanent secretaries across the public sector to ensure that all Government shares, held in names other than that of the Accountant General's Department (AGD), should be surrendered or transferred to the AGD.

The Accountant General said ministries, departments and agencies have been very slow, and in many instances, not responded to demands to transfer shares, but Auditor General Pamela Monroe Ellis intimated at Tuesday's meeting of the Public Accounts Committee (PAC) at Gordon House that the AGD had not pushed hard enough to resolve the issue.

According to the Auditor General's 2016/17 annual report on the AGD, to which it was scurrying, up to Monday evening, to provide responses in time for Tuesday's meeting, 128 ordinary shares and 25 million preference shares are not in the name of the Accountant General in keeping with the Crown (Property) Vesting Act, and the Financial Administration Audit Act. The shares were instead issued in the name of public officials and entities.

In its response, the management of the AGD said that prior to the passing of the Companies Act in 2004, single member companies were not allowed, and because of this, the shares were put in the names of directors and chief executive officers, in conjunction with the Accountant General.

The AGD is the country's Treasury charged with facilitating and reporting on the flow of funds within the public sector.

Accountant General Carlene Murdock said it was not for a lack of effort that shares were still outstanding. “The process is slow and tedious. We have on file where we have written one entity 12 or 13 times and the responses aren't coming in…the responses are coming in very slowly… it is not that these entities have not been contacted; the share transfers have been very slow,” she said.

Murdock further explained that in some instances the AGD is unable to verify the shares held by a number of these bodies because the share certificates presented did not reconcile with the AGD's own records.

“In 2013, as well, we had written to these entities to have them advise us what percentage of shareholdings they have in their companies. We got some responses from the various entities (but when) we compared to what we have, in house, there were differences,” Murdock explained.

Auditor General Pamela Monroe Ellis was strident in her position that the Accountant General's hands are not tied in confirming the amount of shares held by the entities, even without the share certificates.

She stressed that she had explained this to Murdock. “The entities did respond and they provided information on those shares that they are holding. The Accountant General has not recognised that because she did not have the evidence. [But] we were able to identify and reconcile what the entities said by looking at their financial statements.

“I told the Accountant General that that should form the basis of acknowledging that these shares do exist and to contact the auditors who formed an opinion on those financial statements as they (the auditors) must have satisfied themselves as to the nature of these shares and the fact that they do exist. My opinion is that you do have some form of evidence because the entities have responded and even if they have not responded, request their financial statements,” she asserted.

She added that her department was also able to verify from the Companies Office of Jamaica website that these shares were being declared.

PAC members insisted that there must be sanctions for entities which ignore or drag their feet on surrendering the shares, despite instructions from the Cabinet Office.

St Catherine North East Member of Parliament Leslie Campbell suggested that the lack of response amounted to an offence. “I can't understand why the Cabinet issued instructions to an entity and that entity refuses to carry out those lawful instructions. That must amount to misconduct in a public office. Not only is it wrong, it's a criminal offence,” he insisted.

“To write 12 times (to an entity)…there has to be sanctions. If it was a private entity, that person would either be fired or they would have gone out of business,” Manchester North West MP Mikael Phillips stated.

Financial Secretary Darlene Morrison said she was not aware that there were any sanctions, while seeking to assure the committee that the issue would be resolved. She also indicated that the Accountant General would move to implement stricter measures to ensure that the shares are transferred.

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