The Jamaica government Monday said it would move to recover the mis-use of funds at the state-owned oil company, Petrojam following the damning report of the Auditor General that was tabled in the Parliament here earlier this month.
“Where it is clear in the report that there was a case of the mis-use of public funds then I am going to direct the board to take such civil actions as are necessary to recover those funds,” Prime Minister Andrew Holness told a news conference.
But he said he wanted the public to bear in mind the report of the Auditor General is only one process of accountability and that the Integrity Commission is also conducting its own probe into the matter.
“I do not know anything about the (Integrity Commission) investigation other than there is an investigation. I am of the view that they would be focusing on matters that are criminal in nature, but I am saying over and above that where the board sees for example, payments were made for work on a contract and by virtue of delays and changes the contract is terminated, but full payment was made and work not completed, the board should seek legal advice and prepare to cover such funds,’” Holness added.
The report, titled ‘A Review of Aspects of Petroleum Corporation of Jamaica (PCJ) and a Comprehensive Audit of Petrojam Limited’, by the Auditor General has catalogued a series of lavish parties and unapproved sponsorships as well as glaring human resources breaches costing millions of dollars (One Jamaica dollar=US$0.008 cents).
It also warned that bad management practices, if left unresolved, would increase the risk of corruption and further erode Petrojam’s profitability, which has declined over the last three years.
The probe found that although liquidity levels were inadequate to cover Petrojam’s obligations, the state-owned company made questionable payments related to procurement activities, had significant project cost overruns and overspent on donations, which further impaired cash flow.
The Auditor General’s report noted that Petrojam did not provide documentary evidence to substantiate payments of J$14.9 million for counselling service for employees and consultancy services relating to its 35th anniversary planning activities.
It noted that management also spent J$2.6 million to host two birthday parties, which were unrelated to its operations and did not conform to good corporate practices among other questionable arrangements.
Holness, who praised the Office of the Auditor General for the report, said that he would be meeting with the Auditor General “to further discuss her recommendations” not particularly specific to Petrojam.
“We have seen as well where they could be tweaks as well as profound changes to the structure of governance in our country.”
He told reporters that the central executive of the ruling Jamaica Labour Party (JLP) had “unanimously agreed that every effort should be made to have the Auditor General’s report examined by the relevant bodies of Parliament.
“And so the Leader of Government Business will caucus with the government members of the PAC (Public Accounts Committee) to ensure at the earliest possible practical time that the report is brought for the scrutiny and supervision,” he added.
Holness insisted that his administration would be seeking to ensure those guilty of any wrongdoing at the oil company would be required to make the necessary restitution, noting that in the past this has not been the case when major issues such as Petrojam has been brought to public attention.
“Reports have been tabled but we have seldom sought to make restitution. Coming out of this exercise Jamaican can only benefit and our system of governance can only grow stronger if we establish that there has to be a principle of restitution.
“If public agents cause funds to be used inappropriately, illegally, then those who benefitted and those who cause the government to lose must make restitution,” Holness said, adding that he held talks with the board of directors of Petrojam last Friday to discuss the report.
Meanwhile, Opposition Leader Dr. peter Phillips has dismissed as inadequate and “wishy-washy” the response of Prime Minister Holness to the report of the Auditor General.
Phillips cited, as an example, Holness’s directive that Cabinet ministers meet regularly with all board of directors under their remit.
“It seems common-sensical that ministers meet with their boards,” the Opposition Leader told a news conference, adding that this is a mandate “that goes back to 1962.
“Certainly it has happened in all administrations that I have been a part of,” he said, calling for the resignation of members of the board of Petrojam, the Universal Service Fund and the National Energy Solutions Limited.
