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CitCo audit report reveals “a free for all,” says Mayor Bernard Wagner

HeadlineCitCo audit report reveals “a free for all,” says Mayor Bernard Wagner

BELIZE CITY, Thurs. Apr. 26, 2018– Belize City’s mayor, Bernard Wagner, and deputy mayor, Oscar Arnold, held a press conference this afternoon at City Hall, where the senior managers of the new PUP Belize City Council were all present. The purpose of the press conference was to present the findings of the transition team’s audit report on the finances at the council.

Mayor Wagner described the financial practices at City Hall prior to his entry and the new City Council members as “a free for all.”

At the beginning of the press briefing, Mayor Wagner explained that they would present the facts on what they inherited from their predecessors. The review period covers the period from March 2014 to March 2017, and the in-house financials from January 2018 to March 2018. Mayor Wagner said the period was chosen for comparative analysis.

On an annual basis, the Belize City Council’s earnings average around 23 million dollars, but “there has been a steady erosion of the council’s revenue base,” Mayor Wagner noted.

There is a large amount of receivables that have become statute-barred, the mayor pointed out.

Businesses are allowed to operate without paying any taxes; this must come to an end, Mayor Wagner said.

Property taxes for 2014 to 2017 total $21.3 million, $23.5 million, $23.9 million and $25.2 million respectively. These figures, Mayor Wagner explained, represent 43 percent of the council’s total revenue, based on the tax assessed. There were 16,293 properties on the tax roll,  of which 12,777 are occupied and 3,516 unoccupied. The percentage of the tax collected fluctuated between 65 to 70 percent. The tax assessed increased from $9.4 million in 2014 to $16.3 million in 2017, while the council’s accounts receivable increased from $10.6 million in 2014 to $16.3 million in 2017.

The City Council suffers from “inefficient and ineffective methods for tax assessment delivery,” Mayor Wagner explained using his PowerPoint presentation.

It had been recommended that the council reorganize and restructure its valuation and revenue departments for a more integrated management over all of its revenues.

Mayor Wagner also stressed that there is no need to give tax discounts, given the council’s financial position, because this is unsustainable.

The council’s legal department, headed by the former Chief Magistrate, Margaret McKenzie, needs to play a more effective role, the mayor said.

The council earns revenues from trade license fees, which, in total, range from $4.5 million to $5.1 million, but 25 percent of businesses have fallen into arrears. The audit report cites weak compliance and recommended integrating all revenues under one department with the full backing of the council’s legal infrastructure to aid enforcement and compliance.

The City Council has 15 departments and all of them report directly to the City Administrator.

The audit report found that financial prudence and management was lacking, thus resulting in poor use of the council’s resources.

There was no adherence to the budget. The following examples are illustrative of this. Funds allotted in the budget for overtime pay was $136,027, but $332,635 was spent on overtime disbursements. Funds allotted in the budget for summer employment were $20,062, but $44,675 was spent on summer employment. Special Port Allocation was budgeted for $180,000 but the council ended up spending $406,575 on this. In the budget, $72,000 was set aside for donations, but $163,120 was spent on donations. For celebrations, the council had a budget of $96,650, but $455,076 was spent. For entertainment, the budget was $26,650, but the final figure spent on entertainment was $455,076.

The audit report noted that the council had a culture of incurring expenditure without commensurate results.
The council borrowed $20 million for the municipal bond; in addition to this debt, it has bank loans and advances from the Government of Belize amounting to $23.6 million. All of these moneys were borrowed for street building. There was no transparency and accountability, because the process was discontinued from 2013, the audit report found.

The transition team ended its report saying that the administration needs strengthening, as it lacks the capacity to maximize on the resources. The audit report also noted that there have been too many instances of disregard for internal controls. The council needs to act urgently to restructure and reorganize management from the top to the bottom and to bring a management culture that is efficient and results-oriented, the team noted.

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