City Hall has been under the stern watch of the Audit Department and Central Government for several months, and this week news of a damning special audit, scrutinizing transactions for April 2009, and reports that in excess of $275,000 was unaccounted for between January and April of this year, had many observers questioning whether anyone would face criminal charges.
The Audit Department produced a 12-page report at the start of the month, pointing to irregularities on certain transactions totaling nearly $20,000 for April, including payments made for pre-election campaigning, to ghost workers (who seemingly never got paid), and to gas stations and other establishments who have, in effect, disassociated themselves from the receipts presented to them.
City Hall is charged with having overridden internal financial controls, but now that the audit report has been forwarded to Cheryl-Lynn Branker-Taitt, the Director of Public Prosecutions (DPP), it is also implied that something went terribly awry with the monies at City Hall.
Acting Mayor, Dion Leslie told Amandala that they are for the moment concentrating on the $19,000 unaccounted for in the April audit, and not the entire $275,000 in question from January to April, because they only have documentation for the April transactions. (Claims have now surfaced that the documentation for the remaining months – January, February and March – was stolen during the course of the audit. (There is no indication that it has been reported to the police.) )
Leslie said the councilors have been holding hearings with finance management staff, because they want an answer to the big question: where is the money?
Finance officials at the Council had previously claimed that the unaccounted funds result from a system of “under-depositing,” whereby a portion of monies that should have been deposited, by law, were skimmed from monies that should have been sent directly to the bank for deposit – the defense being that the cash on hand was used, instead, to pay bills that were due.
However, that does not answer questions about unsubstantiated payments to creditors and suppliers detailed in the audit report.
We know that the sensational audit report was being circulated on the streets for several days before it was formally tabled to Cabinet and to City Hall this Tuesday.
The scandal was all over the news by Tuesday night.
Acting Mayor, Dion Leslie, told Amandala he had gotten his “black market copy” of the audit on Monday, and immediately decided to call an emergency meeting of caucus, summoning three employees who manage the council’s finances to what he described as “a hearing” on Tuesday afternoon.
Leslie said that by that time, he had received an official copy of the special audit, complete with appendices. He prepared copies for the other councilors and when they saw it, they were shocked, he added.
Leslie also told us that he had spoken to Mayor Moya-Flowers before the hearing with the finance staff and “she has approved” of the hearing.
Two of the three staff members appeared before the CitCo caucus on Tuesday, and according to Leslie, Dwain Davis, the financial controller whose name appears in the audit report as one of the persons who had been handling some of the financial transactions under scrutiny, is due to appear for a caucus hearing on Thursday afternoon. Davis had claimed to have only received the report on Wednesday and asked for a day to review it.
Davis, who had had an audience with Prime Minister Dean Barrow on Wednesday on the audit, declined comment to Amandala when we called him today. He said that he had only learnt of the audit report this week, and he prefers not to speak for the moment.
Until today, Mayor Zenaida Moya-Flowers, who is home nursing her firstborn, only six days old, had also not talked to the media. Some have questioned the timing of the release of the audit report, coinciding with Moya-Flowers’ absence on maternity leave.
For her part, Moya-Flowers told Amandala today that she only received her copy of the report on Wednesday, September 15, and she has read some of it and has already spoken with Davis, instructing him, as the Director of Financial Services responsible for the day-to-day management of the financial affairs, to “very expeditiously” prepare a detailed response to the Auditor General.
We asked Moya-Flowers whether she feared that she or any of her finance management staff would be arrested because of the audit findings, but she did not directly address the question. She told us that she is only going by what the finance staff presented to her, because they are the ones that do the everyday running of the council’s finances.
She said that in March, one of the officers of the Audit Department doing the routine audit took issue with the “under-depositing” – a term which she said she had heard then for the first time.
The auditors claim that a file which CitCo had submitted with documents (purporting to support transactions from January to April) had been stolen from an office that the auditors occupied at City Hall which had been allegedly burglarized. Nothing else was reported stolen.
However, the three elected officials we spoke with – Mayor Moya-Flowers, Acting Mayor Dion Leslie and Councilor Wayne Usher – said they knew nothing about any burglary or stolen file from the auditor’s temporary office at City Hall until this week, when the report was released.
When we spoke with Leslie and Councilor Wayne Usher, a former permanent secretary in the Ministries of Health and Local Government, about the report of the break-in and missing file, both of them told us that when the audit report spoke of a burglary that resulted in the theft of documents from the Council, it was news to them. Leslie said that other councilors were also surprised.
Usher, who described the matter as “sensitive,” went on record to us to say that he was not formally informed that there was a practice of “under-deposits” at the City Council, but he had previously heard rumors.
“I am uncomfortable with these things in the audit,” said Councilor Usher, who has long been described as an ally of Mrs. Moya-Flowers. “Which councilor is not [uncomfortable]?”
On the other hand, Usher said that there is no reason for him not to support Moya-Flowers. He said that he will not indict the Mayor, as she is innocent until proven guilty and no criminal charge has been levied against her. He added that as a former magistrate, he remains on the side of the law.
“If these things come to a head, we take it from there and let the law deal with it,” Usher commented.
Moya-Flowers told us that she would be demanding back the file, claimed to be missing, from Audit, because the officer who had received the file from City Council had signed for it and is responsible for delivering it back to them.
The Mayor said that even though questions were raised in the audit about payments being made on quotations with vouchers, it was a practice that had been ongoing for years. The documents had been provided to the auditor, yet he chose to put that in question, Moya-Flowers said.
Moya-Flowers, a former head of the Department of Cooperatives, said that Davis claimed, when he spoke with her yesterday, that the Audit Department did not formally interview him during the course of the special audit, and the only encounter they had was when the auditor asked for files and documents from him.
Auditor General, Edmund Zuniga is out of the country until tomorrow, his office told us, but a senior official explained to Amandala that the case is now a criminal matter, and he is limiting comment because he does not want to jeopardize it.
The special audit report, he said, was actually issued “a week or so ago” and more extensive audit reports going back a few years should also be released shortly.
As to the “under-depositing” practice at CitCo, the senior official told us that it is a new thing for them, as in all his years at the Audit Department he has not seen it done anywhere else in the public service, even at the level of the municipalities.
On Wednesday, the Office of the Prime Minister issued a press release notifying that a special audit conducted, after Financial Controller Patrick Tillett had uncovered and reported “some financial irregularities,” had been completed.
The Prime Minister said he was “deeply disturbed at the findings of the audit.”
Back in July, at the height of the allegations of financial impropriety at the Karl Heusner Memorial Hospital, a statutory body, Barrow had indicated that arrests would be imminent, as a report had been made to the police.
The Prime Minister has now sent the special audit report over to the DPP “for review and appropriate action.”
For days, Amandala has been trying to reach the DPP Branker-Taitt via phone. This afternoon, we were advised that she was on a phone call, but when we called back, we were advised by the same person that she is not taking any calls.
Having not been able to reach Branker-Taitt via phone despite repeated attempts, we left her messages at her office and on her cell phone, and also sent her an e-mail this morning requesting information. At the time of this writing, however, she had not responded.
Channel 7 reported on Wednesday that arrests in the CitCo “under-depositing” case should be expected by next Friday, September 27.
Back in 2006, when questions were raised over the $218,000 in question for what were said to be loans, salary advances and bounced cheques of Moya-Flowers’ predecessor, former People’s United Party mayor, David Fonseca, the then DPP, Kirk Anderson, had decided that he would not prosecute.
Members of this United Democratic Party Council have alleged that the system of under-depositing was inherited from the former PUP Council.