NINETEENTH REPORT OF THE
FOURTH SESSION OF THE 11TH PARLIAMENT
Examination of the Audited Financial Statements of the Chaguanas Inquiry Borough Corporation (CBC) for the financial years 2008 to 2011.
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Public Accounts Committee1 The Public Accounts Committee (PAC) established by the Constitution of the Republic of Trinidad and Tobago in accordance with Section 119(4) is mandated to consider and report to the House of Representatives on:
“(a) appropriation accounts of moneys expended out of sums granted by Parliament to meet the public expenditure of Trinidad and Tobago; (b) such other accounts as may be referred to the Committee by the House of Representatives or as are authorized or required to be considered by the committee under any other enactment; and (c) the report of the Auditor General on any such accounts.”
Current membership Dr. Bhoendradatt Tewarie Chairman2 Mr. Taharqa Obika Vice- Chairman Mrs. Ayanna Webster-Roy Member Mr. Randall Mitchell Member Mrs. Paula Gopee-Scoon Member Mr. Adrian Leonce Member Dr. Lester Henry Member Mrs. Charrise Seepersad Member
Committee Staff The current staff members serving the Committee are: Ms Keiba Jacob Secretary to the Committee Ms Hema Bhagaloo Assistant Secretary to the Committee Mr Darien Buckmire Graduate Research Assistant Ms Anesha James Administrative Assistant
Publication An electronic copy of this report can be found on the Parliament website: http://www.ttparliament.org/committee_business.php?mid=19&id=230&pid=28
Contacts All correspondence should be addressed to: The Secretary Public Accounts Committee Office of the Parliament Levels G-7, Tower D The Port of Spain International Waterfront Centre 1A Wrightson Road Port of Spain Republic of Trinidad and Tobago Tel: (868) 624-7275; Fax: (868) 625-4672 Email: [email protected]
1 The PAC of the Eleventh Republican Parliament was established by resolutions of the House of Representatives and the Senate at sittings held on Friday November 13, 2015 and Tuesday November 17, 2015 respectively. 2 The Committee held its first meeting on Wednesday December 2, 2015. At this meeting the Committee elected Dr. Bhoendradatt Tewarie as Chairman, in accordance with Section 119(2) of the Constitution of the Republic of Trinidad and Tobago. At that same meeting, the Committee resolved that its quorum should comprise of three (3) Members, inclusive of the Chairman and any other Opposition Member.
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Table of Contents
MEMBERS OF THE PUBLIC ACCOUNTS COMMITTEE ...... 4 Executive Summary ...... 5 Introduction ...... 9 Establishment...... 9 Mandate ...... 9 Ministerial Response ...... 9 Election of the Chairman and Vice Chairman ...... 9 Establishment of Quorum ...... 10 Determination of the Committee’s Work Programme ...... 10 The Inquiry Process ...... 11 Chaguanas Borough Corporation (CBC) Profile ...... 12 Background: Chaguanas Borough Corporation...... 12 Responsibilities under the Purview of the Chaguanas Borough Corporation (CBC) ...... 13 Mission ...... 14 Members of the Council of the Chaguanas Borough Corporation ...... 14 Senior Management at the Chaguanas Borough Corporation ...... 15 Line Ministry ...... 15 Minister of Rural Development and Local Government ...... 15 Accounting Officer ...... 15 Background: Auditor General ...... 16 Issues and Recommendations ...... 17 Concluding Remarks...... 25 Appendix I ...... 27 Witnesses ...... 27 APPENDIX II ...... 28 Minutes of Meeting ...... 28 APPENDIX III ...... 32 Notes of Evidence ...... 32
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MEMBERS OF THE PUBLIC ACCOUNTS COMMITTEE
ELEVENTH PARLIAMENT, REPUBLIC OF TRINIDAD AND TOBAGO
Dr. Bhoendradatt Tewarie Mr. Taharqa Obika Mrs. Ayanna Webster-Roy Chairman Vice- Chairman Member
Mr. Randall Mitchell Mrs. Paula Gopee-Scoon Mr. Adrian Leonce Member Member Member
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Executive Summary
The Public Accounts Committee (PAC) is the Parliamentary Financial Oversight Committee tasked with the responsibility of examining the Report of the Auditor General and Audited Accounts of Statutory Authorities and Bodies. The Committee presents its Nineteenth Report of the Eleventh Parliament which details its examination of the Audited Accounts, Balance Sheets and other Financial Statements of the Chaguanas Borough Corporation (CBC) for the financial years 2008 to 2011 and produced this report to highlight its findings and recommendations.
This report details the issues, endorsements and recommendations made by the Committee to improve CBC’s performance. The issues identified in this report were found during the period under examination (2008 to 2011). During this inquiry, the following issues arose:
General issues relating to the performance of the Chaguanas Borough Corporation; The relationship between the Chaguanas Borough Corporation and other state entities; The role of the Chaguanas Borough Corporation in the availability of efficient, secure and safe aviation services; and The challenges faced by the Chaguanas Borough Corporation in carrying out its duties.
Based on the Committee’s examination the following recommendations were proposed: Formulate an updated strategic plan/ action plan; Develop guidelines for operational and strategic flexibility; Develop an Implementation Process Map to track the progress and the implementation and or achievement of its strategic objectives by February 28, 2019; Set up structures to evaluate and review all the strategic objectives of the Municipal Corporations on a monthly basis by February 28, 2019; Conduct capacity needs assessments for each municipal corporation by February 28, 2019 and based on the outcomes, allocate the necessary funding for subsequent training and capacity development initiatives;
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Develop a comprehensive Revenue Generation Plan as a means of sourcing additional income to supplement its operational cost by February 28, 2019; Foster greater institutional strengthening by: - Develop a detailed description of the Corporation’s Scope of responsibilities; - Annually compare how each Corporation’s goals and objectives were achieved to formulate standardized best practices; - Reviewing all the municipal corporations organizational structure to formulate the best functional structures; - Coordinating the development of standardized internal policies and operating procedures for all the municipal corporations; - Assisting in the recruitment of critical/specialized staff; - Building capacity for the advancement of feasibility studies primarily for Development projects; - Developing guidelines for youth employment/training; and - Establishing consultants/contractors lists at all the municipal corporations. Should devise appropriate solutions/alternatives for staff shortages and identify key roles for succession or replacement planning; Identify pools of talent that could potentially fill and perform highly in key roles and develop employees to be ready for advancement into these roles; To ensure business/operational continuity, the CBC in collaboration with the MRDLG should: i. Conduct a workforce assessment to document and identify the critical knowledge held by existing employees; ii. Have tenured employees write their work processes down in the form of standard operating procedures; iii. Enlist the assistance of existing and departing retirees to serve as mentors; iv. Institute job-sharing between veteran employees and newer employees; The Permanent Secretary should ensure that top management positions at the Corporations under his/her purview do not remain vacant for extended periods of time.
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CBC should implement an Exit Interview process to facilitate a proper and effective change in Executive Leadership; CBC should seek to maintain appropriate documents and develop a handover procedure to facilitate an appropriate and effective change in Executive Leadership; The CBC should submit a status update on the recruitment of a Chief Financial Officer (CFO) by February 28, 2019; Taking into account the shortfalls in monthly subventions from the MRDLG, municipal corporations should formulate a list of goals/objectives for the fiscal year based on priority and allocate the subventions received accordingly. While formulating this listing, the Corporations should: i. Evaluate the needs of the residents and businesses that would arise from the Corporations’ intervention; ii. Consider the precedence of the reoccurring need for the service(s) in the burgess(es); iii. Assess the resources needed to achieve the provision of the service (s), including the likelihood of success; iv. Implement measures and evaluation systems to assess the use of the limited resources at the Corporations’ disposal; The MRDLG should submit a status update on the Draft Policy on Local Government Reform. Consideration should be given to establishing Internal Audit Units within each Municipal Corporation or enhancing the Internal Audit function at the Ministry level so that it would have the necessary capacity to perform proper scrutiny and oversight of financial transactions with these Local Government bodies; The CBC should develop and implement internal accounting controls and processes to ensure the timely preparation and submission of Financial Statements to the Auditor General’s Department (AGD) by the statutory deadline; The CBC should undertake a quarterly closing process of financial accounts to ensure the ongoing completeness and accuracy of data collected;
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CBC should urgently complete the audited financial statements for the years 2012 and 2013 and put steps in place for the timely completion of the audited financial statements for the years 2014 to 2017 and submit a status update on the outstanding financial statements no later than February 28, 2019; The MRDLG should exercise their oversight functions and strengthen its overall capacity and take a more proactive role in monitoring and evaluating the management of the operations of Municipal Corporations to ensure the timely submission of audited financial statements and all other relevant documents to the Auditor General and Parliament’ The Committee endorses the initiatives implemented by the Corporation to reduce accounting errors and omissions but also emphasizes the need for monthly review and reconciling of the accounting records in a timely manner to ensure their success; Ensure that there are proper internal supervisory checks to facilitate the detection of omissions, arithmetical and transposition errors by February 28, 2019; Differences should be investigated and adjustments made to the relevant accounts; and Comply with the Ministry of Finance Circular F: 22/8/43 dated July 23, 1969 regarding Capitalisation of Assets, Depreciation and the Maintenance of a Fixed Asset Register.
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Introduction
Establishment The PAC of the Eleventh Republican Parliament was established by resolution of the House of Representatives and the Senate at the sittings held on Friday November 13, 2015 and Tuesday November 17, 2015 respectively.
Mandate The Constitution of the Republic of Trinidad and Tobago mandates that the Committee shall consider and report to the House appropriation accounts of moneys expended out of sums granted by Parliament to meet the public expenditure of Trinidad and Tobago and the report of the Auditor General on any such accounts. In addition to the Committee’s powers entrenched in the Constitution, the Standing Orders of the House of Representatives also empower the Committee (but is not limited) to: a) send for persons, papers and records; b) have meetings whether or not the House is sitting; c) meet in various locations; d) report from time to time; and e) communicate with any other Committee on matters of common interest.
Ministerial Response The Standing Orders3 provide for the Minister responsible for the Ministry or Body under review to submit within sixty (60) days a paper to the House responding to any recommendations or comments contained in the Report which are addressed to it.
Election of the Chairman and Vice Chairman In accordance with section 119(2) of the Constitution, the Chairman must be a member of the Opposition in the House. At the first meeting held on Wednesday December 2, 2015 Dr. Bhoendradatt Tewarie was elected Chairman of the Committee. Mr. Taharqa Obika was elected Vice-Chairman of the Committee on December 13, 2017.
3 Standing Order 110 (6) in the House of Representatives and 100(6) of the Senate.
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Establishment of Quorum The Committee is required by the Standing Orders to have a quorum so that any decisions made by the Members during the meetings can be considered valid. A quorum of three (3) Members, inclusive of the Chair or Vice-Chairman), with representatives from both Houses was agreed to by the Committee at its First Meeting.
Determination of the Committee’s Work Programme The Committee agreed to an eight (8) entity work programme for the Third Session of the Eleventh Parliament during its twenty-first meeting held on Wednesday November 29, 2017. These entities included: 1. Water and Sewerage Authority (WASA); 2. Trinidad and Tobago Electricity Commission (T&TEC); 3. Trinidad and Tobago Bureau of Standards (TTBS); 4. Airports Authority of Trinidad and Tobago (AATT) 5. Chaguanas Borough Corporation (CBC); 6. Chaguaramas Development Authority (CDA); 7. Housing Development Corporation of Trinidad and Tobago (HDC); and 8. Regional Health Authorities (SWRHA, NCRHA, NWRHA & TRHA).
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The Inquiry Process
The Inquiry Process outlines steps taken by the Committee when discussing the findings in the Audited Financial Statements and Management Letters of the Chaguanas Borough Corporation (CBC) for the financial years 2008 to 2011. The Inquiry Process agreed to by the PAC included the following steps:
I. Identification of issues in the Audited Financial Statements and Management Letters of the CBC for the financial years 2008 to 2011;
II. Preparation of an Inquiry Proposal for the selected issues. The Inquiry Proposal outlines: a. Background; b. Objective of Inquiry; and c. Proposed Questions.
III. Questions for written responses were forwarded to the CBC on March 12, 2018 and responses received on April 3, 2018.
IV. A public hearing was conducted and the relevant witnesses were invited to attend and provide evidence on May 9, 2018.
V. Questions for additional responses were sent to the CBC on May 11, 2018 and were received on May 28, 2018.
VI. Report Committee’s findings and recommendations to Parliament upon conclusion of the inquiry.
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Chaguanas Borough Corporation (CBC) Profile
Background: Chaguanas Borough Corporation The Chaguanas Borough Corporation is a Local Government Authority incorporated on 13th September 1990 by the Municipal Corporation Act 21 of 1990. The Corporation operates a Council-Chairman form of Government and provides the following services as authorised by the Act; Development and maintenance of public infrastructure; Health and environmental services; and Recreational and public services including safety and well-being.
The Chaguanas Borough Corporation is responsible for approximately 115 square kilometers. Funding for the activities of the Corporation is provided mainly by Government subvention on a deficit financing basis. The Corporation also raises its own revenue from services provided to its citizens, the majority of which are derived from the collection of land and property rates and taxes, and the collection of fees for the use of markets and abattoirs.4
The Chaguanas Borough Council consists of eight (8) electoral district councillors and four aldermen selected through a proportional representation methodology. The Mayor and Deputy Mayor are then selected henceforth. The electoral districts are as follows: a) Felicity/Endeavour; b) Enterprise South; c) Edinburgh/Longdenville; d) Enterprise North; e) Charlieville; f) Montrose; g) Monroe Road/Caroni Savannah Road; and h) Cunupia. 5
4 Chaguanas Borough Corporation Notes To The Financial Statements For The Year Ended 30th September 2011 5 Chaguanas Borough Corporation webpage: http://www.chaguanasborough.com/ accessed on August 20, 2018.
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Responsibilities under the Purview of the Chaguanas Borough Corporation (CBC) The following list contains but a few of the responsibilities common to all Municipal Corporations6 1. The distribution of truck-borne water subject to the provisions of the Water and Sewerage Act; 2. The provision, maintenance and control of all Corporation buildings; 3. The maintenance and control of homes for the aged established by the Corporation; 4. Subject to any other written law, the maintenance and control of child care centers established by the Corporation; 5. The construction and maintenance of all drains and water courses except main water- courses and highway water courses; 6. The provision, maintenance, and control of such parks, recreation grounds, benches and other public spaces as the President may from time to time by Order prescribe; 7. The promotion of development within the Municipality in accordance with the plans approved by the Minister with responsibility for physical planning; 8. The maintenance of state property including – such police stations, health centers, post offices, and other government buildings as the Minister to whom responsibility for the construction and maintenance of buildings is assigned may by order determine; 9. The maintenance, control and enhancement of the physical environment including – monitoring water courses, beaches and water front areas, swamps, forests, game sanctuaries, savannahs, parks and other open spaces; 10. The disposal of garbage from public and private property, the development and maintenance of sanitary landfills, chemical treatment for insect and vector control, abatement of public nuisances and dissemination of information for primary health care; 11. The development, construction, maintenance and repair of passenger bus and taxi shelters and beaches; 12. The co-ordination of local and regional trade fairs, athletic events and cultural displays and entertainment; 13. The collection and distribution of forms issued by Departments of Government;
6 Municipal Corporations Act Chapter 25:04 https://rgd.legalaffairs.gov.tt/laws2/Alphabetical_List/lawspdfs/25.04.pdf
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14. The maintenance and control of burial grounds and crematoria, subject to the provisions of the Public Burial Grounds Act and the Cremation Act; 15. The provision, maintenance and control of public pastures and recreation grounds, subject to the provisions of the Recreation Grounds and Pastures Act; and 16. Such other functions as the President may from time to time by Order prescribe.
Mission To Effectively and Efficiently Utilize Resources, While Sustaining and Promoting Quality Living Through Commitment and Collaboration to Create Better Communities7
Members of the Council of the Chaguanas Borough Corporation Alderman Gopaul Boodhan (Mayor) Alderman Marisa Vidya Ramlogan Alderman Cheryl Ryan-Mohammed Alderman Karran Nancoo Councillor Faaiq Mohammed - Charlieville (Deputy Mayor) Councillor Lisa Rachael Holder - Enterprise North Councillor Ronald Herman Heera - Enterprise South Councillor Janelle Fiona Joe-Ryan - Edinburgh / Longdenville Councillor Debideen Manick - Felicity / Endeavour Councillor Adrian Ali - Munroe Road / Caroni Savannah Road Councillor Andell Paramsook - Montrose Councillor Vandana Mohit – Cunupia
7 Chaguanas Borough Corporation Facebook Page accessed on August 20, 2018 https://www.facebook.com/pg/chaguanasboroughcoop/about/?ref=page_internal
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Senior Management at the Chaguanas Borough Corporation Chief Executive Officer – Mr. Raymond A. Seepaul (Head of the Administration) Deputy Chief Executive Officer – Position currently vacant Corporate Secretary – Ms. Farzana Rafeeq (Chief Officer) Principal Medical Health Officer – Dr. Neevan Sampson (Chief Officer) Financial Officer – Mr. Rajindra Sawh (Chief Officer) Municipal Police Inspector – Mr. Ballyram Lalla Planning Officer – Mr. Roddy Beharry County Superintendent – Mr. Rabindranath Gokool Administrative Officer II – Mr. Vishnu Seunarine Accountant II – Mrs. Geeta Rampersad-Pooran Disaster Management Coordinator – Position currently vacant
Line Ministry Ministry of Rural Development and Local Government
Minister of Rural Development and Local Government Senator the Honourable Kazim Hosein
Accounting Officer 8 Ms. Stara Ramlogan – Permanent Secretary (Ag.)
8 Ms. Desdra Bascombe was the Accounting Officer who attended the public hearing on the behalf of the Ministry of Rural Development and Local Government
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Background: Auditor General The Auditor General is required by law to examine and report annually to Parliament on the accounts of Ministries, Departments, Regional Health Authorities, Regional Corporations and such State Controlled Enterprises and Statutory Boards for which the Auditor General is the statutory auditor. The portfolio also includes the audit of: The accounts of projects funded partly or wholly by International Lending Agencies All pensions, gratuities and other separation benefits paid by the State in accordance with the Pensions Acts and other Agreements; and The grant of credit on the Exchequer Account in accordance with the requirements of section 18 of the Exchequer and Audit Act, chapter 69:01 The audit services take the form of financial audits, compliance audits and value for money audits intended to promote: Accountability Adherence to laws and regulations Economy, efficiency and effectiveness in the collection, disbursement and use of funds and other resources. The duties and powers of the Auditor General are defined in the Exchequer and Audit Act Chapter 69:01 of the laws of Trinidad and Tobago.
Also, Section 20(1) of the Chaguanas Borough Corporation Act, Chapter 49.02 requires the Auditor General or a qualified auditor appointed by the Auditor General, to audit the accounts of the Authority.
Auditor General - Mr. Majeed Ali
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Issues and Recommendations During the examination of the Audited Financial Statements of the CBC for the financial year 2008 to 2011, the following issues were identified and recommendations proposed:
1. Outdated Strategic Plan Strategic planning is an organisational management activity that is used to: set priorities, focus energy and resources, strengthen operations, ensure that employees and other stakeholders are working toward common goals, establish agreement around intended outcomes/results; and assess and adjust the organisation's direction in response to a changing environment.9 With respect to the CBC and the other municipal corporations, the strategic plan should be in alignment with the Strategic Plan of the MRDLG. Officials from the CBC stated that although the Strategic Plan for the period 2013 to 2016 was outdated, the goals outlined were still relevant to the CBC and its burgesses. Officials from the CBC also stated that before a comprehensive Strategic Plan could be formulated, the Corporation must wait for guidelines pertaining to Local Government Reform. Recommendations: The Corporation should formulate an updated strategic plan/ action plan for fulfilling its immediate obligations and have the same approved by the line Ministry, while awaiting the guidelines pertaining to Local Government Reform; The MRDLG should develop guidelines pertaining to operational and strategic flexibility whilst awaiting Local Government Reform; The Corporation should develop an Implementation Process Map to track the progress and the implementation and or achievement of its strategic objectives by February 28, 2019; and
9 The Balanced Scorecard Institute webpage http://www.balancedscorecard.org/BSC-Basics/Strategic-Planning- Basics accessed on June 12, 2018.
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The MRDLG should set up structures to evaluate and review all the strategic objectives of the Municipal Corporations on a monthly basis by February 28, 2019.
2. Absence of Systematic Capacity Building and Institutional Strengthening Initiatives Capacity building has typically been defined as the development and strengthening of human and institutional resources.10 Officials from the CBC identified systematic capacity building and institutional strengthening as an internal weakness that could only be rectified through the establishment of a formal Human Resource Department (HR) at the Corporation. It was indicated that qualified and competent officers would be responsible for spearheading these processes. With a non-existent HR Department, the Corporation’s staff could only be trained when there were the interventions from the MRDLG and other state agencies and/or when funding was available. As at May 2018, the CBC had not received any releases to facilitate the training of its employees. Recommendations: The MRDLG should conduct capacity needs assessments for each municipal corporation by February 28, 2019 and based on the outcomes, allocate the necessary funding for subsequent training and capacity development initiatives; and The Corporation should develop a comprehensive Revenue Generation Plan as a means of sourcing additional income to supplement its operational cost by February 28, 2019; To foster greater institutional strengthening, the MRDLG should: - Develop a detailed description of the Corporation’s Scope of responsibilities; - Annually compare how each Corporation’s goals and objectives were achieved to formulate standardized best practices; - review all the municipal corporations organizational structure to formulate the best functional structures; - Coordinate the development of standardized internal policies and operating procedures for all the municipal corporations;
10 The World Health Organization webpage http://www.who.int/tobacco/control/capacity_building/background/en/ accessed on June 12, 2018
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- Assist in the recruitment of critical/specialized staff; - Build capacity for the advancement of feasibility studies primarily for Development projects; - Develop guidelines for youth employment/training; and - Establish consultants/contractors lists at all the municipal corporations. Provide a status of the achievement of the aforementioned institutional strengthening initiatives by February 28, 2019.
3. Inadequate Retention of Institutional Knowledge and Succession Planning Inadequate retention of institutional knowledge and succession planning were a result of a lack of policies and procedures in place at the CBC. A noted example was the Corporation’s inability to retain adequate institutional knowledge because of a poorly maintained filing system. With an insufficient document management system, the Corporation’s ability to record and register pertinent procedures, competencies, skills and practices was greatly diminished. Additionally, the Corporation’s inability to practice adequate succession planning was due to internal and external factors such as: Internally - the absence of sustained systematic training programmes resulted in a deficiency in transferring of skill sets and knowledge (particularly in the technical field); and - the rapid turnover of monthly paid staff because of promotional transfers and retirement of officers contributed significantly to this problem. Externally, - the Service Commissions Department was unable to provide technical staff such as Road Officers, Building Inspectors and Works Supervisors to replace officers who were promoted and retired. At the time of the public hearing, several positions on the Corporation’s Organisational Structure were vacant which limited the successful achievement of the Corporation’s goals and objectives. For example, the Corporation’s CEO indicated that the position of Chief Financial Officer (CFO) was vacant at the time of the public hearing. This officer is the most senior financial person on the organisational structure and is responsible for ensuring the Corporation’s compliance with
19 | P a g e financial regulations and standards, managing the finances of the Corporation, financial planning, management of financial risks, record-keeping and financial reporting. Recommendations: The CBC in collaboration with the relevant stakeholders, the MRDLG and the Service Commissions Department should devise appropriate solutions/alternatives for staff shortages and identify key roles for succession or replacement planning; The CBC should identify pools of talent that could potentially fill and perform highly in key roles and develop employees to be ready for advancement into these roles; To ensure business/operational continuity, the CBC in collaboration with the MRDLG should: i. Conduct a workforce assessment to document and identify the critical knowledge held by existing employees; ii. Have tenured employees write their work processes down in the form of standard operating procedures; iii. Enlist the assistance of existing and departing retirees to serve as mentors; iv. Institute job-sharing between veteran employees and newer employees; The Permanent Secretary should ensure that top management positions at the Corporations under his/her purview do not remain vacant for extended periods of time. CBC should implement an Exit Interview process to facilitate a proper and effective change in Executive Leadership; CBC should seek to maintain appropriate documents and develop a handover procedure to facilitate an appropriate and effective change in Executive Leadership; and The CBC should submit a status update on the recruitment of a Chief Financial Officer (CFO) by February 28, 2019.
4. Inadequate financial resources to effectively satisfy the needs of stakeholders Services provided by the Corporation were planned through the formulation of specific projects and programmes of work. Maintenance works were undertaken on a recurrent basis whilst developmental projects were conducted through the capital programme (PSIP). Officials from
20 | P a g e the CBC indicated that monthly subventions decreased by approximately $20 million between the period October 2017 and April 2018. These shortfalls adversely affected the progress of developmental projects and the day-to-day operations of the CBC. However, it was further stated that while the Corporation oftentimes finds innovative ways to generate revenue, the funds received from those activities would go into the Consolidated Fund. As a result, the Corporation would have to reapply for those funds which illustrated that the CBC does not have direct access to the funds it generates. Recommendation: Taking into account the shortfalls in monthly subventions from the MRDLG, municipal corporations should formulate a list of goals/objectives for the fiscal year based on priority and allocate the subventions received accordingly. While formulating this listing, the Corporations should: i. Evaluate the needs of the residents and businesses that would arise from the Corporations’ intervention; ii. Consider the precedence of the reoccurring need for the service(s) in the burgess(es); iii. Assess the resources needed to achieve the provision of the service (s), including the likelihood of success; and iv. Implement measures and evaluation systems to assess the use of the limited resources at the Corporations’ disposal.
5. The absence of a resident Auditing Unit The Port of Spain City Corporation is the only municipal corporation which has an auditing unit. An internal audit unit was not on the organizational structure of the CBC. This service was provided by the internal audit team of the MRDLG. Officials from the CBC indicated that this deficiency should be addressed in the Draft Policy on Local Government Reform that was before the Public Management Consulting Division (PMCD) of the Ministry of Public Administration. The Draft Policy identified audit staff and audit committees within the corporations, who would report directly to the Ministry of Finance on financial matters, and the Auditor General’s Department on auditing matters.
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Recommendation: The MRDLG should submit a status update on the Draft Policy on Local Government Reform. Consideration should be given to establishing Internal Audit Units within each Municipal Corporation as well as enhancing the Internal Audit function at the Ministry level so that it would have the necessary capacity to perform proper scrutiny and oversight of financial transactions with these Local Government bodies.
6. Status of Outstanding Financial Statements Audited Financial Statements are pivotal for the accounting of public funds. It was noted that the Corporation was late in submitting the audited financial statements for the years 2012 to 2017. Officials from the CBC indicated that the financial statements for years 2011/2012 and 2012/2013 were being prepared by the External Accountants. Officials from the CBC stated that the backlog of outstanding financial statements would be addressed as a priority. Furthermore, officials from the MRDLG stated that the backlog of outstanding financial statements was a challenge experienced by the other Municipal Corporations as a result of frequent staff changes which delayed the preparation process. Recommendations: The CBC should develop and implement internal accounting controls and processes to ensure the timely preparation and submission of Financial Statements to the Auditor General’s Department (AGD) by the statutory deadline; The CBC should undertake a quarterly closing process of financial accounts to ensure the ongoing completeness and accuracy of data collected; CBC should urgently complete the audited financial statements for the years 2012 and 2013 and put steps in place for the timely completion of the audited financial statements for the years 2014 to 2017 and submit a status update on the outstanding financial statements no later than February 28, 2019; and The MRDLG should exercise their oversight functions and strengthen its overall capacity and take a more proactive role in monitoring and evaluating the management of the operations of Municipal Corporations to ensure the timely submission of audited
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financial statements and all other relevant documents to the Auditor General and Parliament.
7. Accounting Errors and Omissions The management letters for the years 2008 to 2011 identified many accounting errors and omissions such as understatement of non- current assets, non-capitalisation of fixed assets purchases, typographical errors and misstatements in the financial statements. Also, documents not produced for audit examination included with the following: Fixed Assets Registers; Advances Register; Invoice Order Books; General Ledgers; and Trial Balances; Journal Vouchers; and Pay Record Cards. In a written submission to the Committee many of the CBC’s responses were “We cannot provide a reasonable answer to this question. Three senior accounting officers employed during that financial year were no longer with the CBC and the current staff was not in a position to give an explanation.” The CBC indicated that measures were actively being taken to improve the maintenance of accounting records and security of vouchers and the record keeping of related documents by closer monitoring, balancing and reconciling of primary accounting records (Vote Book, abstracts, cashbooks and bank reconciliations). Endorsement/Recommendation: The Committee endorses the initiatives implemented by the Corporation to reduce accounting errors and omissions but also emphasizes the need for monthly review and reconciling of the accounting records in a timely manner to ensure their success. The Committee adopts the Auditor General’s recommendation and therefore recommends that CBC should:
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- Ensure that there are proper internal supervisory checks to facilitate the detection of omissions, arithmetical and transposition errors by February 28, 2019; - Differences should be investigated and adjustments made to the relevant accounts; and - Comply with the Ministry of Finance Circular F: 22/8/43 dated July 23, 1969 regarding Capitalisation of Assets, Depreciation and the Maintenance of a Fixed Asset Register.
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Concluding Remarks The Chaguanas Borough Corporation has a very significant and strategic role to play in developing, managing and maintaining its eight electoral districts. However, in its attempts to achieve its mandate, the Corporation was plagued by various financial, administrative, process and capacity limitations. Nevertheless, the Corporation must forge stronger partnerships with other key agencies primarily the Ministry of Rural Development and Local Government, and the Service Commissions Department to strengthen human resource capacity and competence and to enhance its efficiency and effectiveness.
The Committee noted that there were a number of vacant positions on the Corporation’s establishment, which are crucial to the effective functioning of the Corporation. Vacancies in finance and accounting, impeded the Corporation’s ability to properly execute its core functions. The Committee also noted that the Corporation lacked an established Human Resource Department. As such, the Committee noted that establishing such a Unit and the filling of positions would do well to increase the capacity of the Corporation and allow it to respond to the growing demands of its burgesses.
The Corporation should also look to bring its audited accounts up to date so that it could have an updated accountability platform. While awaiting Local Government Reform, the MRDLG should begin developing guidelines pertaining to operational and strategic flexibility. This will allow for flexibility with organizational structures, systems, processes, budgets and most importantly, people as day to day operations get more dynamic and technology evolves at ever-faster rates.
Local Government Corporations need to be strengthened to be more efficient, effective, responsive and accountable in order to meet the additional challenges and demands of greater decentralization, deeper devolution and more autonomy or else the Local Government system as a whole will be weaker than is desirable.
The Chaguanas Borough Corporation, as well as others, need to step up the pace of recruitment of key skills (with support from the key stakeholders) as well as the process of institutional strengthening to meet the increasing demands of responsiveness to citizens as well as accountability for performance.
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This Committee respectfully submits this Report for the consideration of the Parliament.
Sgd. Sgd. Dr. Bhoendradatt Tewarie Mr. Taharqa Obika Chairman Vice - Chairman
Sgd. Sgd. Mrs. Ayanna Webster-Roy Mr Randall Mitchell Member Member
Sgd. Sgd. Mr. Adrian Leonce Mrs. Paula Gopee-Scoon Member Member
Sgd. Sgd. Dr. Lester Henry Mrs. Charrise Seepersad Member Member
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Appendix I Witnesses At the meeting held on Wednesday May 8, 2018, the witnesses attending on behalf of the Chaguanas Borough Corporation, the Ministry of Rural Development and Local Government and Auditor General’s Department were:
Chaguanas Borough Corporation Mr. Raymond Seepaul - Chief Executive Officer Mr. Gopaul Boodhan - Mayor Mr. Roddy Beharry - Planning Officer Mr. Boniface Ogoma - Engineering and Survey Officer Ms. Farzana Rafeeq - Corporate Secretary Ms. Geeta Pooran-Rampersad - Accountant II Mr. Amar Bedassie - Disaster Management Dr. Neevan Sampson - Principal Medical and Health Officer Mr. Andell Paramssok - Councillor
Ministry of Rural Development and Local Government Mrs. Desdra Bascombe - Permanent Secretary
Auditor General’s Department Mr. Louis Hernandez - Assistant Auditor General (Ag.) Mrs. Simone Wajadali - Assistant Audit Director
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APPENDIX II Minutes of Meeting
THE PUBLIC ACCOUNTS COMMITTEE – THIRD SESSION, ELEVENTH PARLIAMENT
MINUTES OF THE TWENTY- SIXTH MEETING HELD ON WEDNESDAY, MAY 09, 2018 AT 10:20 A.M. IN THE ARNOLD THOMASOS (EAST)MEETING ROOM, LEVEL 6, AND IN THE J. HAMILTON MAURICE ROOM, MEZZANINE FLOOR, OFFICE OF THE PARLIAMENT, TOWER D, THE PORT OF SPAIN INTERNATIONAL WATERFRONT CENTRE, 1A WRIGHTSON ROAD, PORT-OF-SPAIN.
Present were: Dr. Bhoendradatt Tewarie - Chairman Mr. Taharqa Obika - Vice - Chairman Ms. Melissa Ramkissoon - Member Mr. Adrian Leonce - Member Dr. Lester Henry - Member
Ms. Keiba Jacob - Secretary Ms. Hema Bhagaloo - Assistant Secretary Mr. Darien Buckmire - Research Assistant
Excused were: Mrs. Paula Gopee-Scoon - Member Mrs. Ayanna Webster-Roy - Member Mr. Randall Mitchell - Member
COMMENCEMENT
1.1 At 10:20 a.m. the Chairman called the meeting to order and welcomed those present. Mr. Randall Mitchell, Mrs. Ayanna Webster-Roy and Mrs. Paula Gopee-Scoon were excused from the Meeting.
THE EXAMINATION OF THE MINUTES OF THE TWENTY-FIFTH MEETING
2.1 The Committee examined the Minutes of the Twenty-Fifth (25th) Meeting held on Wednesday March 28, 2018.
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2.2 There being no omissions or corrections, the Minutes were confirmed on a motion moved by Mr. Adrian Leonce and seconded by Mr. Taharqa Obika. MATTERS ARISING FROM THE MINUTES OF THE TWENTY-FIFTH MEETING
3.1 As per item 7.1, the Chairman informed the Members that questions for additional information were sent to the Airports Authority of Trinidad and Tobago (AATT) on April 6, 2018 and the responses were received by the Secretariat on April 23, 2018 and used to draft the Eighteenth Report of the Committee.
CONSIDERATION OF MINISTERIAL RESPONSES 4.1 The Committee agreed to provide feedback on the Ministerial Responses to the Eleventh, Twelfth, Thirteenth and Fourteenth Reports of the PAC by Wednesday May 23, 2018.
CONSIDERATION OF THE COMMITTEE’s REPORTS 5.1 The Chairman thanked Ms. Melissa Ramkissoon who provided comments on the Sixteenth Report of the Committee.
5.2 The Chairman invited Members to make any comments and/or suggestions on the Fifteenth and Sixteenth Reports of the Committee. After some discussion, it was agreed that the Reports will be finalized for presentation at the next Sitting of the House of Representatives and the Senate.
OTHER BUISNESS
Determination of the Committee’s Work Programme
6.1 The Chairman informed the Members that the Report of the Auditor General on the Public Accounts of the Republic of Trinidad and Tobago for the Financial Year 2017 were laid in both the Senate and the House of Representatives. 6.2 The Committee agreed that at the next meeting, there will be a discussion with the Auditor General’s Department on the Report of the Auditor General on the Public Accounts of the Republic of Trinidad and Tobago for the Financial Year 2017.
PRE-HEARING DISCUSSION RE: CHAGUANAS BOROUGH CORPORATION (CBC)
7.1 The Committee agreed on the focus of the meeting which were the concerns raised in the Report of the Auditor General of the Republic of Trinidad and Tobago on the Financial Statements of the Chaguanas Borough Corporation (CBC) for the years 2008 to 2011.
7.2 Members discussed the issues of concern and the general approach for the Public Hearing.
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7.3 There being no further business for discussion in camera, the Chairman suspended the meeting at 10:51 a.m.
DISCUSSION WITH THE CHAGUANAS BOROUGH CORPORATION (CBC)
8.1 The Chairman called the public meeting to order at 10:59 a.m.
8.2 The Chairman welcomed officials from the Chaguanas Borough Corporation (CBC), the Auditor General’s Department and the Ministry of Rural Development and Local Government, members of the media and the public to the Twenty-Sixth (26th) public hearing with the PAC and introductions were exchanged.
8.3 The following officials joined the meeting:
Chaguanas Borough Corporation (CBC)
Mr. Raymond Seepaul - Chief Executive Officer Mr. Gopaul Boodhan - Mayor Ms. Geeta Pooran - Rampersad - Accountant II Mr. Roddy Beharry - Planning Officer Mr. Boniface Ogoma - Engineering & Survey Officer Ms. Farzana Rafeeq - Corporate Secretary Mr. Andell Paramsook - Councillor
Ministry of Rural Development & Local Government (MRDLG)
Ms. Desdra Bascombe - Permanent Secretary
Auditor General’s Department (AGD) Mr. Louis Hernandez - Deputy Auditor General Mrs. Simone Wajadali - Assistant Audit Director
8.4 Key Topics Discussed:
1. The CBC’s recent accomplishments; 2. The challenges experienced by the CBC with respect to street vending; 3. The oversight role of the MRDLG; 4. The status of the CBC’s outstanding financial statements; 5. The frequency of staff changes at the CBC; 6. The deficiencies in the internal audit capacity at the municipal corporations and the MRDLG; 7. The strategies in place for financial and compliance control at the municipal corporations;
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8. The recommendations proposed by the AGD with respect to the lack of policies and procedures in place at the CBC; 9. The pervasive issues encountered by the CBC; 10. The impact of the absence of established casher positions at the CBC for the collection of fees; 11. The reasons for the non-capitalization of fixed assets and the measures in place to rectify this issue; 12. The financial constraints affecting the CBC’s general operations; 13. The absence of a Project Management unit at the CBC; 14. The reasons for the variations with respect to projects undertaken by the CBC; 15. The absence of succession planning at municipal corporations; 16. The process in place for the compilation of a list of projects or programmes at the CBC; 17. The status of the Local Government Reform; 18. The measures in place for the CBC to be self-sufficient; 19. The measures in place to address the rampant criminal activity in certain communities and the protection fees paid by contractors; 20. The relationship between Town and Country Planning and the CBC; and 21. The status of the CBC’s Emergency Risk Management Plan.
Please see the attached verbatim notes for the detailed oral submission by the witnesses.
8.5 The Committee agreed to send additional questions to the CBC.
ADJOURNMENT
9.1 The Chairman thanked the representatives from the Auditor General’s Department, the Ministry of Rural Development and Local Government, the Chaguanas Borough Corporation (CBC), members of the media, and the Members for their attendance.
9.2 The adjournment was taken at 12:34 p.m.
We certify that these Minutes are true and correct.
CHAIRMAN
SECRETARY
May 09, 2018
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APPENDIX III Notes of Evidence VERBATIM NOTES OF THE TWENTY-SIXTH MEETING OF THE PUBLIC ACCOUNTS COMMITTEE HELD IN THE J. HAMILTON MAURICE ROOM, MEZZANINE FLOOR (IN PUBLIC) TOWER D, THE PORT OF SPAIN INTERNATIONAL WATERFRONT CENTRE, 1A WRIGHTSON ROAD, PORT OF SPAIN, ON WEDNESDAY, MAY 09, 2018, AT 10.59 A.M. PRESENT Dr. Bhoendradatt Tewarie Chairman Mr. Taharqa Obika Vice-Chairman Dr. Lester Henry Member Mr. Adrian Leonce Member Ms. Melissa Ramkissoon Member Ms. Keiba Jacob Secretary Ms. Hema Bhagaloo Assistant Secretary Mr. Darien Buckmire Research Assistant ABSENT Mrs. Ayanna Webster-Roy Member Mrs. Paula Gopee-Scoon Member Mr. Randall Mitchell Member
CHAGUANAS BOROUGH CORPORATION Mr. Raymond Seepaul Chief Executive Officer Mr. Gopaul Boodhan Mayor Mr. Roddy Beharry Planning Officer Mr. Boniface Ogoma Engineering and Survey Officer Ms. Farzana Rafeeq Corporate Secretary Ms. Geeta Pooran-Rampersad Accountant II Mr. Amar Bedassie Disaster Management Dr. Neevan Sampson Principal Medical and Health Officer
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Mr. Andell Paramssok Councillor MINISTRY OF RURAL DEVELOPMENT AND LOCAL GOVERNMENT Mrs. Desdra Bascombe Permanent Secretary AUDITOR GENERAL’S DEPARTMENT Mr. Louis Hernandez Assistant Auditor General (Ag.) Mrs. Simone Wajadali Assistant Audit Director
Mr. Chairman: Good morning everybody and a special welcome to the officials from the Auditor General’s Department, from the Ministry of Rural Development and Local Government, from the Chaguanas Borough Corporation and of course, we want to welcome as well members of the media who are here and members of the general public who might be sitting in. My name is Bhoendradatt Tewarie. I am Chair of this Committee and other members will say their names and introduce themselves to you. The purpose of this meeting of the Public Accounts Committee is to examine the report of the Auditor General of the Republic of Trinidad and Tobago on the financial statements of the Chaguanas Borough Corporation for the years 2008 to 2011. The Committee is desirous of hearing the challenges being faced by the key stakeholders of the Chaguanas Borough Corporation in an attempt to determine some of the possible solutions to these challenges. The role of the Committee is to help the CBC to improve its delivery of services in an efficient, effective and economic manner. This meeting is being held in public and it is being broadcast live on the Parliament’s Channel 11 on television and on radio 105.5 FM and the Parliament’s YouTube channel ParlView. Viewers and listeners, tuning in, can send their comments related to today’s topic by email to [email protected] and at facebook.com/ttparliament. So we proceed now with today’s meeting. Viewers can also communicate by Twitter @ttparliament. And I will ask, first of all, the members of the Auditor General’s Department to introduce themselves, then we will go to the Mayor of the Chaguanas Borough Corporation to make a brief opening statement and I will always invite my colleagues sitting here to introduce themselves before the Mayor makes his statement. Okay, so members of the Auditor General’s Department.
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[Introductions made] Mr. Chairman: Okay. I will ask my colleagues here to introduce themselves. [Introductions made] Mr. Chairman: Okay. Mr. Mayor, I wonder if you can give a brief opening statement on behalf of the Corporation. Mr. Boodhan: Thank you very much, Chairman and members of the Committee. It is my pleasure to be here with members of the Chaguanas Borough Corporation. Chaguanas is a prosperous community that has grown significantly over the years with a population of over 128,000 persons. The Borough of Chaguanas growth continues in areas of commerce, industry, educational institutions and residential communities. Numerous national and international companies have chosen to base their organizations in Chaguanas. This has poised the ever-growing borough to become the next city in Trinidad and Tobago. The Chaguanas Borough Corporation provides a range of services to our burgesses. These services fall under the mandate of Local Government, include among others: building inspector and engineering, provision of municipal policing, management and maintenance of parks and sporting facilities, health and sanitation, disaster management, maintenance and management of market and abattoir, provision and support to service and non-profit organizations. We continue to work aggressively on our four pillars of development namely: safety and security, technology and education, health and the environment, economic development. Our vision is that of a happy people and a happy community by continuing to work and partner with all stakeholders and agencies to create safe and secure communities and improve the quality of life in the borough for all. Thank you very much. Mr. Chairman: Okay. Thank you very much, Mr. Mayor, for your opening statement. Permanent Secretary, I wonder if I could have an opening perspective from you as well. Ms. Bascombe: Good morning all. Desdra Bascombe, Permanent Secretary, Ministry of Rural Development and Local Government with oversight for 14 Corporations, of which one is the Chaguanas Borough Corporation. I see this as an opportune moment to learn from experiences of the past because as the Chair indicated, we are looking at the Auditor General’s Report on the period 2008 to 2011, a period which the CEO would agree, many of us were not in the current
34 | P a g e roles that we are in now. It is also a pleasure to meet with such an experienced Committee to have a meeting of the minds, brainstorming sessions, on how we can improve systems, procedures and accounting processes within the Borough of Chaguanas in particular and within the other Corporations and the Ministry of Rural Development and Local Government as a whole. So I really thank you for this opportunity and look forward to a fruitful discussion. Mr. Chairman: Okay. Thank you very much. I will begin by asking a few questions and I will then leave it to my colleagues to follow up. The first question I would ask, Mr. Mayor, is: What would you say are some of the major accomplishments of the borough within recent times? And I know that you gave a perspective on what you would like to see for Chaguanas but what are one or two of the things that we can hope to see in the year ahead or in the year or two ahead? So some accomplishments that you can identify and some of the things that you might do to take you in the direction that you outlined. Mr. Boodhan: Thank you, again, Mr. Chairman. Over the past years, within the last four or five years, Chaguanas has aggressively continued in terms of the physical development of the communities. In our eight electoral districts, there is a lot of work that we did and continue to do as it relates to infrastructure, as it relates to recreational facilities. The market refurbishment started, and that is work in progress in terms of our market. We have done a lot of youth development and partnership in youth development. In 2014, we have instituted one of our models to make the community safe and secure and as safety and security is of paramount importance to all of us in Trinidad and Tobago. We have gotten the community, all the different groups: the business community, inter-religious organizations, faith-based organizations, NGOs, police, municipal police, to put together a team that we could meet on a regular basis to get the pulse and get comments and suggestions from burgesses and those organizations to make Chaguanas safe and secure. Also, what we have done is that as it relates to the market and vending, it was proposed that the construction of four-storey complex in Chaguanas to house street vending and that would have bring a permanent solution to the level of street vending that you have in Chaguanas and probably that model could have been adopted in the different municipalities throughout the
35 | P a g e country. That is work in progress. Also, at our administrative complex, which is probably the only administrative complex of that kind in the country, so the environment that we have there, we came in there in 2014 from our old building, so we have a very good environment that we work in and we try to provide, on a daily basis, the best quality service to our burgesses. As we speak here today at this meeting, as a pilot project which is a novelty for local government is that—as a pilot project starting today, our one-stop information desk at our Corporation to provide support for all the different areas and the services we provide to burgesses. So we continue in terms of all areas of development for the benefit of our burgesses in Chaguanas. Mr. Chairman: Mr. Mayor, you mentioned the issue of vending and we have seen challenges recently in Port of Spain with the City Corporation there. A couple of days ago, we also saw some issues arising in Arima. I just wondered how you might describe the situation in Chaguanas and the challenges that you might have and any solutions that you see as being sustainable solutions for the growing town of Chaguanas. I know you mentioned that you had in sight a four-storey building that you wanted to put up to accommodate the vendors but could you talk a little bit about what is the situation now and how do you see a sustainable solution for it and do you have any current challenges with regard to that? Mr. Boodhan: Well, firstly, Chairman, I would like to say that our situation might be a bit different from Port of Spain and Arima. In 2010, the old Chaguanas health facility was converted into a vendor’s mall to provide some level of support for those persons who vend on the streets, and in 2014, the Council took a decision to remove those vendors, put them in another area and start construction of a four-storey structure so that you could have two storeys for vending and two for parking because parking is a challenge in the Borough of Chaguanas. At this point in time, as I speak, there is still a court matter as it relates to that because the vendors did not want to move. But the present challenge that we face here now is the reorganization of the present Chaguanas market, the structure, because there is a lot of vacant stalls and for one reason or the other, some of those vendors do not want to go in their stalls, they want to vend in areas just outside of the market, so that whole reorganization process is
36 | P a g e taking place now, that there are additional stalls that vendors could be relocated there. So it is just an internal arrangement now. We have already done, last year, the construction of a new roofing system at the market and there are other works that need to be done like in terms of electrical, in terms of the security aspect, the refrigeration system in the market. So that is work in progress and I am very much optimistic that all that we are doing, we will have a better organization there and also, that vendors and even persons who shop in the market would have a better environment in terms of conducting their business. Mr. Chairman: Okay. I realize that in terms of the Corporation, there is a kind of separation between what you might call the administrative structure in the Corporation and the political directorate which is governed through a Council and I wonder—I really want to ask some questions about the reports before us but I wonder if you can explain to me a little bit the relationship between the CEO and the administration that manages the Corporation and the role of the elected officials and aldermen governing through a Council and how that operates. And this is important, remember you have people watching so they need to understand. Mr. Boodhan: Mr. Chairman, can I do it in two parts? I will explain the part from the Council aspect and ask the CEO to do the management aspect. Mr. Chairman: Yes. Okay, very good. Mr. Boodhan: In Chaguanas, we have eight elected representatives representing the eight electoral districts and four aldermen that make up a Council of 12 persons which includes the Mayor and the Deputy Mayor. They have four standing committees as mandated by the Act 21 of 1990 that we are governed by. We meet every Tuesday in the month with our last Tuesday being that of our co-ordinating meeting which we have all the coordinators and the coordinators are the different agencies that provide services and support to the Chaguanas Borough Corporation and by extension, the burgesses. And on that last Tuesday, we have our statutory meeting where all reports and all that we would have done in committee stage, that we get the final approval there. We make the policies and we set the direction in support of the administration headed by the CEO and in consultation with the CEO and his team as to the plans and programmes, both development and recurrent in the Borough of Chaguanas. Mr. Chairman: And CEO, could you explain a little bit?
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Mr. Seepaul: Thank you, Mr. Chairman and good morning, again, to you and the other members. My name is Raymond Seepaul, Chief Executive Officer at the Chaguanas Borough Corporation. As the Mayor earlier mentioned, the Chaguanas Borough Corporation is a creature of Act 21 of 1990 which governs all municipalities. The role of the Council is basically to formulate policies and to make decisions. The role of the administration is really to implement the lawful resolutions of the Council. The work of the Council and that of the Corporation is done through committees of the Councils. These committees include—well, there are four main standing committees of Council which includes: Public Health, Physical Infrastructure, Personnel and Finance. Decisions taken at these committees are ratified at the statutory meeting. It is also important to mention that a very critical committee of the Corporation is the Regional Co-ordinating Committee where other stakeholders, other State and non-State organizations are present to assist in the overall development of, and in this case, the Borough. So the role of administration really, as I indicated before, is to implement the decision, the lawful decisions of Council and this is done through the Chief Officers of the Council as is enshrined in Act 21. So we have five chief officers: the Chief Executive Officer being one, the Financial Officer, Corporate Secretary, Engineer and Survey Officer as well as the Corporate Secretary. So these officers would head different departments and these departments are responsible for implementing the decisions of Council. Mr. Chairman: All right. So the political electorate is responsible for policy-making and the identification of things to be done. So the Council is responsible for policy-making and things that are to be done and your public officers are responsible for public administration, implementation and fiduciary responsibility. Mr. Seepaul: Correct. Mr. Chairman: Okay. Permanent Secretary, I wonder if you could elaborate a little bit on the question of the role of the Ministry of the Rural Development and Local Government in relation to these Corporations and what is the relationship between the central Ministry and these local governments. Ms. Bascombe: Thank you, Chair. The Ministry of Rural Development and Local Government has oversight over the 14 municipal corporations. We also assist them in securing funding from the
38 | P a g e central government, namely the Ministry of Finance. In terms of overview, I would talk a bit about the structure of the Corporation. They have responsibility for approving expenditure to a maximum of $300,000; that is the CEO’s limit. Any expenditure on a single item above that amount is referred to the Ministry at Head Office under the Special Ministerial Tenders Committee, et cetera. In terms of oversight, we have meetings with the CEOs on a periodic basis, generally not one to one but all CEOs. We also review their expenditure reports which are submitted to the Ministry of Finance on an annual basis. Then, they have financial reports and you would notice the document refers to them which are also submitted. Unaudited and audited reports are submitted to the Ministry of Finance. We are a bit behind in the audited reports but we are attempting to catch up. We are working closely with each of the Corporations to ensure that these financial reports are up to date. Mr. Chairman: But how far caught up are you because we are examining 2011? Ms. Bascombe: In Chaguanas case— Mr. Chairman: Where are we now? Ms. Bascombe: We are working on 2012/2013. Mr. Chairman: Okay. These are with the Auditor General or you are preparing to send? Ms. Bascombe: They are in progress. Mr. Chairman: They are in progress so they are not yet with the Auditor General? Ms. Bascombe: No. Mr. Chairman: When are we going to get to 2017? A completed 2017? Mr. Seepaul: I will not want to venture a guess but what I am saying to the Committee this morning is that because of the gravity of situation especially with the Corporation coming before the Public Accounts Committee this morning, we all recognize the importance of giving account to the Parliament and the people of Trinidad and Tobago and this matter, as far as it is possible for me to take action in getting the backlog address, it will be given utmost priority. Ms. Bascombe: Chair, if I may add? It is not a challenge for simply the Chaguanas Borough Corporation but each of the Corporations. In fact, the matter was raised at a previous PAC meeting, two months ago, when we were looking at disaster management. So we provided a
39 | P a g e status in terms of where each Corporation had reached in submitting their financial reports. Mr. Chairman: Yeah. What is the problem? Why is there such a backlog? Do you have an idea or is it just that things have been left to hang so to speak? I will ask the Permanent Secretary generally in terms of local government and then you can speak to the Chaguanas Borough Corporation. Ms. Bascombe: Well over the years, the Corporations have had frequent staff changes which have resulted in reports, especially detailed reports such as administrative reports and financial reports being left on the back burner but we are trying to put them on the front burner now. Mr. Chairman: Okay. And CEO? Mr. Seepaul: My response would be similar to that of the Permanent Secretary in that we would have had challenges with the staff. The preparation of these reports is the responsibility of qualified accountants. More than likely, financial officers are such qualified personnel to prepare these reports but because of the inconsistent presence of financial officers in Corporations, this could probably be the reason why we have the backlog. Also, I believe that there may have been some laxity on the part of the Corporation not to place a great deal of importance and urgency into getting these documents done and I, for one definitely, will, as indicated before, will be treating it a lot more seriously. Mr. Chairman: So you are giving the assurance to this Committee that you will take a sort of leadership responsibility to bring these things up to date with the Auditor General? Mr. Seepaul: Yes, at my Corporation. Mr. Chairman: Yes. Okay, I appreciate that. I think that that is good, the volunteerism in it and also the acceptance and the taking of responsibility. One of the problems, you mentioned the lack of financial officers in the Corporation though, but we have a—I mean, we note from what is available before us, that you also have an internal audit problem or you might say even a kind of deficiency because you do not have the capacity within the Corporation. Would you like to say anything about that? 11.25a.m. Mr. Seepaul: Certainly so, Mr. Chairman. The Audit and Exchequer Act requires the operations of the accounting officer to be supported by an auditing unit. In the case of municipal
40 | P a g e corporations, possibly with the exception of the Port of Spain Corporation, there are no resident auditing units at regional corporations and at the Chaguanas Borough Corporation. We all recognize the tremendous importance of auditors at a corporation and we are hopeful. We are optimistic that with the local government reform initiative presently in the pipeline, that this deficiency will be addressed. Mr. Chairman: Do you now have on your establishment, on the books, room for an internal auditor and members of staff of an internal audit capability? Mr. Seepaul: At the present the organizational structure of the Chaguanas Borough Corporation does not provide for internal auditors. This service is provided by the internal audit team of the Ministry of Rural Development and Local Government. Mr. Chairman: Okay. So, can I say that your understanding is that internal audit support and supervision and intervention is to come to the Corporation, in your particular case, from the central government, from the Ministry of Rural Development and Local Government? Mr. Seepaul: Could you rephrase that? Mr. Chairman: I just want to get your understanding because I am going to ask the PS. Your understanding, by what you have said, seems to be that the internal audit capability, because you have none on the books now, you do not have any on the establishment, is really meant to come from support from central government, through the Ministry of Rural Development and Local Government. Right? That is your understanding? I just wanted to confirm that. Permanent Secretary, how does that work? Does it work well or not? Ms. Bascombe: I will start with the current state and then get into the future state. Mr. Chairman: Yes. Ms. Bascombe: The CEO is correct in his understanding of the function of the audit unit in the Ministry of Rural Development and Local Government. Currently, we have very few positions in the Ministry, because in the public service in general, there is a dearth of suitably qualified persons in the auditing stream. It is difficult to attract and retain suitably qualified persons, and one of the reasons is that several of the positions in Ministries are not travelling positions. Mr. Chairman: Okay. Ms. Bascombe: In the Ministry we currently have one Auditor III on the establishment, one
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Auditor II, three Auditors I and three Auditing Assistants, but not all the positions are filled. One of our Auditors II retired last year, and this is to deal with 14 Corporations, in addition to head office. The future state is that, bearing in mind that local government reform is coming, we drafted a Note for Cabinet to create an audit structure to position auditors within each Corporation. That Note is currently engaging the attention of the PMCD of the Ministry of Public Administration and Communications. In the Draft Policy on Local Government Reform, it also identifies not only auditing staff within the corporations, but audit committees, because we recognize that there is a dire need for auditor at all levels of the Corporation, especially as we will be devolving authority and accountability to the Corporations with local government reform, and they would report directly to the Ministry of Finance on financial matters, and the Auditor General’s Department on auditing matters. Mr. Chairman: Okay. Would I be correct in saying or drawing the conclusion that there is a structural deficiency, in terms of the availability of adequate support for the effective execution of the fiduciary function in the 14 local government institutions which you govern through the Ministry of Rural Development and Local Government? This is not a criticism. It is just an understanding that there is in fact a structural deficiency that stands in the way of that and you would now have to go to PMCD to create the infrastructure to make adequacy possible. Ms. Bascombe: Yes, Chair, that is a fair assessment. Mr. Chairman: All right. Thank you very much. I will stop my questions at this point and I will ask for the next contributor. This is MP Leonce. Mr. Leonce: Thank you, Chair. Just a question, in terms of the financial capability. The financial officer is the most senior financial person within the structure. Yes? Mr. Seepaul: Technically yes, but the Chief Executive Officer is also the Chief Financial Officer. But technically, the financial officer is that officer who is suitably qualified and competent to address the financial and fiduciary duties of the corporation. Mr. Leonce: Okay. This position is what has been changing frequently. Correct? Mr. Seepaul: The position is a contract position, and as far as I can remember, the length of
42 | P a g e contracts will vary between a two-year and three-year period. Well, the Ministry of Rural Development and Local Government will be responsible for the hiring—well, the selection process for these officers, as well as the other chief officers. And we have had challenges in the past, with people not showing interest, for one reason or another. So, at present, at the Chaguanas Borough Corporation, we do not have a financial officer. So, you know, this happens from time to time and as indicated before, could possibly be the reason for the Corporations not being up-to-date with their relevant reports. Mr. Leonce: Why I ask all of this is because, based on what the PS said, their ability to provide you with proper internal auditing requirement seems to be limited. And in addition, your accounting officer may be stretched because there is no support, with respect to the financial officer, and maybe you also have so many things do. So, I am assuming that a lot of work is forced upon your Accounting Officer II. Correct? Mr. Seepaul: That is correct. In fact, because of the situation that we are currently encountering, the accounting officer and the CEO have to take up the slack because of the absence of a financial officer, and this is the reality on a day-to-day basis. Mr. Leonce: My question is, because in your financial documents a lot of things are missing. For example, I just looked at the Fixed Asset Register, where there is no information available. I wanted to ask, not just you, but also in terms of how internal audit, what their recommendations are. Because you all said that you are compliant with internal audited recommendations, but those recommendations may be inefficient because of the limited ability to do internal audits. So what is the strategy, one, to have that financial control with the limited resources you have, and the recommendations given by the internal audit? What is the strategy for compliance of that? Mr. Seepaul: Let me just back up a little bit. Many of the questions presented to the Corporation to respond to would have been submitted by the Auditor General to the Corporation some time ago through its management letters. Possibly, because of failure of the Corporation then to respond, we are here today to deal with these matters. So, you made reference to the asset register. Because we are now very sensitive to this being something that the Corporation needs to address and needs to address urgently, we have since started to put things in place so that we can have the asset register done in a manner that
43 | P a g e is acceptable to the Auditor General. Mr. Leonce: That is good but I would like to ask the Auditor General, because it is not just the asset register. So we cannot just be reactive to because we ask the question you say: “Okay, we are going to look at the asset register now.” I am trying to get a holistic view, and you could guide me Auditor General. What are some of the main recommendations, in terms of control for financial control and management, with respect to the financial documents coming out of the Corporation? And can we structure something that we can work with, where you would now have a plan going forward, in light of the lack of resources provided by the Ministry and what you have now? Mr. Hernandez: Member, that is a very wide question, with broad holistic. What I would say is that firstly, there are so many areas in the financial operations. So, firstly the regional corporations such as Chaguanas Borough Corporation, they have to have policies for all the areas of their operations, whether it is beyond the income/expenditure side. And then you have procedures, which are to be followed. Policies have to be approved by council and the procedures have to be known to all staff. Right? So that is a control for all areas of operations. And from that, you would have all records. For example, the fixed assets register will have all the procedures and how it is supposed to be maintained and who are responsible. So responsibilities are also placed to officers. So, there should not be any lapse in maintaining the Fixed Assets Register. Those weaknesses could be—points to a lack of policies and procedures. Mr. Leonce: My question is geared specific now. There is some level of control because, I mean, a corporation is running. You have a procurement policy, how you procure stuff and how you go about doing the contracts. My question is really geared to the risks, based on your report and the main recommendations, in terms of the financial oversight, based on your specific recommendations. Mr. Hernandez: If you can put it to the fixed assets register, you got figures being reported on. The fixed assets are valued at X amount of dollars. It is reported to the stakeholders. But what you are looking at, you will look at those assets really in existence. You are looking at the security. The risk involved there is the possibility there could be loss of the assets. But the Fixed Assets
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Register is a control, where you would help to ensure that the assets that are valued and reported, it is safeguarded so the maintenance of that register would help to secure those assets; to show they are complete, all the assets reported are complete, they existed and in good condition, and so on. Mr. Leonce: Thank you. Dr. Henry: I wanted to get, first of all, a broad view of what are the particular challenges of the Chaguanas Borough Corporation. What sets you apart then from the other Corporations, in terms of the kind of issues that they are dealing with? One of the questions was the internal audit, but we have sufficiently dealt with that, I think, for this morning. Mayor you can answer. Mr. Boodhan: Can I just start with one issue? It might sound very small but it have a great impact, in terms of persons accessing services at the Corporation, and then the CEO could share some of the other issues. For years, we do not have what we call a cashier, a position as a cashier at the Corporation. Based on the Financial Regulations, it has to be a monthly-paid officer who would assume that position. And every day, every working day, there are persons who come to access services at the Corporation. And when they have cash, if they do not have the LINX card, they have to go to the bank—and knowing Chaguanas and the challenges we face with the management of traffic, it is very inconvenient for those persons, and many a times they need assistance with some very small issues but there are fees associated with it. They have to leave the Corporation compound, go to the bank, and then come back with that slip. So, I think that is a deficiency. It might be small in nature, but it has a great impact in terms of persons and the quality of service. There are many other areas that need to be looked at, in terms of a whole reorganization or a whole restructuring, not only the part of the financial aspects of it but also too other areas. Another quick example, moneys are collected from revenue of the Corporation—and there are sometimes innovative ways that the Corporation could generate that revenue, but then it goes into the Consolidated Fund. Then we have to reapply for those moneys if we have different projects or we need to have any new projects. So there is not a great incentive to make things happen as quickly as possible. I mean, with all the checks and balances, and all the regulations,
45 | P a g e there is not a great incentive to make things happen in a very quick space of time. And most of the times people want services they do not want it tomorrow they want it today. I do not know if the CEO could elaborate on some of these others. Dr. Henry: Through you, Chair, before you move on Mayor I just want to be clear about what was the real issue in procuring a cashier. What was it? Mr. Boodhan: Well, I would like to ask the CEO to answer that, but every time that we as a council would ask that applications would have been made to have somebody from the public service to be there, and it is just like, you know, nothing is happening. I am seeing it my term that nothing is happening because nobody is there even up to today. It is a challenge and if issues like those or other issues of similar nature could be addressed, in terms coming out of this committee—I am certain that other Corporations might suffer the same fate in issues of such nature. Mr. Seepaul: All I can say, with respect to this matter is that efforts would have been made to seek to have this officer, the cashier position made available to the Corporation in the past. I have been at the corporation for a little over a year now. And as the Mayor indicated, the Corporation is trying to make life easier for those that we serve, in terms of their fee payments and stuff. So this position is very critical. The thing about it is that Chaguanas Borough Corporation does not have on its establishment the position of cashier, and I did not come prepared to respond to this question as to what specifically have been the challenges encountered in our liaising with head office, which is the Ministry, with respect to securing this position. Dr. Henry: Maybe the PS might help, I do not know. If the borough is supposed to collect fees, and so on, as is obviously the case, what was supposed to be the mechanism for collecting, without the established position of a cashier? Mr. Seepaul: Well the Corporation, as CEO, we have to be versatile. We have to use staff and try to observe the provisions of the Financial Regulations as to the responsible officers who are given that mandate to collect fees. The thing about it is that the—and this is where the challenge comes. The cashier position would bring with it certain benefits that the officer who is assigned those duties in a temporary manner, would not be able to receive.
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Dr. Henry: No, the Mayor mentioned some other issues that the CEO was going to raise about the peculiar challenges at the Chaguanas Borough Corporation. Mr. Seepaul: I think primarily, and this is nothing unique to the Chaguanas Borough Corporation, the issue of funding to really fulfill the mandate of the Corporation in providing quality services for our burgesses. We need money. Apart from the provision of services, we are also responsible for ensuring that the organization and its staff, we introduce capacity building and institutional strengthening. Without money we cannot do that. People can only become more effective and capable to do these things through training. Then, of course, we have challenges in dealing with succession planning. We have people leaving the Corporation, daily-rated workers, for example, leaving the Corporation through retirement and having people step up to, particularly supervisory and skilled positions, is something of a challenge. Again, this requires a certain degree of training and equipping people with the necessary skills and competencies. So we see that everything points to the financial challenge. Ms. Ramkissoon: Thank you, Mr. Chair. Good morning again. I wanted to ask a question in relation to the property, plant and equipment, what you have submitted to the Committee thus far. There is a particular comment from the management letter dated the 4th of November, 2015, for the financial year 2011. And the comment was that the fixed assets purchases totalling about $2.4million were not capitalized and omitted from the financial statements. Now, firstly, I want to ask the Auditor General if this statement is indeed something they want to stand by. And then I want to ask the Corporation to respond to why these things were omitted. Mr. Hernandez: Yes, member. The Auditor General would stand by that comment. Mr. Seepaul: Member, I would want to refer this matter to our Accountant II, Ms. Pooran and reminding the Committee that the officer who would have been most appropriate in presenting a response would have been the financial officer. But I will refer it to Ms. Pooran. Ms. Pooran-Rampersad: Mr. Chair, plant and machinery are purchased mainly via our Development Fund. These would have been recorded there. As to why they were not capitalized, I would be unable to answer at this point in time as that would have been the function of the
47 | P a g e financial officer or the accounting person responsible for producing the position statement. Ms. Ramkissoon: What Head did you say it was capitalized under? Ms. Pooran-Rampersad: It was not capitalized according to the Auditor General but these purchases are made mainly under the Development Programme and records of these purchases would have been on the Development Programme. Ms. Ramkissoon: Can the Auditor General comment on that? Mr. Hernandez: Member, some of these purchases were under what you would call the Item, under your estimates. That is minor equipment. So those would have been assets that have economic useful lives and they were expenses. Ms. Ramkissoon: So, to say that they were omitted is not—so they were accounted for under a different Head? Is that what you are saying? Mr. Hernandez: Yes, like an expense Head and not capitalized. Ms. Ramkissoon: Because there is another statement which says, that, for example, 6.1 in the management letter that stated that the Mayor’s chain, which is valued approximately half of a million, was not reflected in the financial statements. So this also is under a different Head? Mr. Hernandez: It would have been purchase and expense. Yes. The nature of the item is supposed to be a fixed asset. Ms. Ramkissoon: Okay. So what the PS was alluding to earlier, they are looking at policies and systems to correct this. Now what is the Corporation doing now to correct this system, to ensure that we do have the Auditor General making comments like: “This is being omitted”, and we are actually putting these expenses under the correct areas, like fixed assets spending so we could account better and we could say: Okay, this is where the money has been spent. What have you done? Mr. Seepaul: What I can say is that the Chaguanas Borough Corporation welcomes the presence of auditors, be it the Auditor General’s Department or be it the Internal Auditing unit of the Ministry of Rural Development and Local Government. We welcome their presence, because they will point out our deficiencies to us. And I am speaking in a general sense. They will point out all the deficiencies that exist in our organization, so that we can basically learn from our mistakes. Ms. Ramkissoon: So Mr. CEO, you have not put anything in place to correct this to date? Because
48 | P a g e from what I am seeing here we have plant, property and equipment amounting to about $7 million. So it is not a small amount of money. And then you are having assets like $2million not accounted for, but it is under different Heads. You do not want these things reflected on your audited reports. So what I am saying is what systems have you put, or what set-up have you done now? Because this is 2015 management letter, we are in 2018. Have you done anything from 2015 to today, to say that you are not going to have this issue going forward? Mr. Seepaul: As I indicated earlier, I have only been at the Chaguanas Borough Corporation since April 18th, last year. Many of these matters that are before us this morning are relatively new to me, and as I would have also indicated, we plan to address them. In moving forward on these issues, I need to be advised and I need to be advised with the appropriate accounting people that I do not have presently at the Corporation. Ms. Ramkissoon: I would take that undertaking from you, Mr. CEO. I do have another question in relation to the project management. From the responses, I have learnt that you do not have a project management unit but based on the amounts of the projects, you have had no cost overruns, which is good. But I could not understand the variation in the amount. And is what I am going to ask you for some guidance on this morning. So, from the packages you did submit an appendix with the values of the initial cost and the actual cost and all of those were quite well. They actually were the initial cost or a little bit below. But when you look at the management letter, which is November2015, there is a significant difference with the actual expenditure. And let us just look at one example, which is the local roads and bridges. Are you all on the same page? 11.55 a.m. Mr. Seepaul: Could you indicate what— Ms. Ramkissoon: From your submission, it would be page 43. Right. Local Roads and Bridges Programme. And we have the Jonathan Trace South which has an initial cost project of $47,000 and the actual cost was $45,000. Are you seeing that? Right, but in the management letter there is the Jonathan Trace South, which is about $284,000 for actual expenditure, and then we have an actual Vote Book in 2011 for $45,000 and then the difference is about $239,000. And that is
49 | P a g e where I want some guidance on. Mr. Seepaul: Member, I am unable to provide that information. It requires some degree of investigation, and I am asking the Committee if I can present this information, in writing, at a subsequent time. Ms. Ramkissoon: Does the Auditor General want to share anything on that since this is from the management letter? Mr. Chairman: I think what the Member is asking is, what was the nature of the concern by the Auditor General’s office? And secondly, what response did they require? Mr. Hernandez: It is simply that a figure was reported in the financial statement. You would have had a sub-schedule in the makeup of the figure reported on the statement of position/balance sheet, and the supporting schedule would have had the figure for the Jonathan Trace. But, however, these figures reported in the financial statements have to agree to the main books and records, which was, in this case, not a general ledger but a vote book and the Vote Book had a difference, so that was the query. Mr. Chairman: But, you are saying you are not able to explain it, without looking into the matter and trying to find out. Mr. Seepaul: That is correct, Chairman. Mr. Chairman: All right, and that is because, you would have assumed office within the last year and perhaps this is a little way back, is that it? Mr. Seepaul: Not just that, we have quite a lot of data presented here. We have several projects indicated in our report and, had I been aware that this particular issue would have been raised this morning, I would have come prepared. So, I do not want to make any premature statement on the matter without, you know, looking more closely at what may have happened. Mr. Chairman: Okay, but remember these are your documents, in a way. So, I mean, in that sense you are prepared for any question on anything. But, we do take the point that we will get something in writing, from you, in response to Sen. Ramkissoon’s question on this particular matter. Ms. Ramkissoon: Thank you, Mr. Chair. And one more question, in relation to your Appendix 6, which deals with your projects and your programmes. I would like an idea of how these projects
50 | P a g e or programmes come about? How does this list present itself? Is it every year—well, I do not know how you all do it—if at every quarterly or over a year? How do you compile a list of projects? Because there are a number of drainage projects, road projects? How is it that the Corporation—because you do not have a project unit, right? So, how is it—it is established? Mr. Seepaul: Appendix 6 deals with the PSIP programme or, to use another term, the Development Programme. Funds are allocated to carry out this particular programme on an annual basis. When the Ministry of Finance would allocate funds towards the Chaguanas Corporation for this particular purpose—it is the responsibility of the Council to identify and subsequently approve projects to be done under the Development Programme. Once this is done, the paperwork follows, meaning that the detailed estimates are prepared and funds are applied for, from the Budget Division of the Ministry of Finance through the Ministry of Rural Development and Local Government. So that these projects can be implemented. The different categories of projects that we are seeing here on this appendix would be basically line item projects, which would deal with different areas; drainage and irrigation, roads and bridges, markets, recreational facilities, et cetera. So, this in a nutshell is how it is done. The absence of a project unit at the Corporation has not been a handicap as indicated in the report. The Corporation has a team of very committed, diligent officers that are responsible for ensuring that these projects are done in an efficient, effective, cost effective manner and that, you know—we have not encountered any serious challenges, at least not while I have been there, in terms of executing the projects under the Development Programme. Ms. Ramkissoon: Thank you, Mr. CEO. In relation to your projects, that is very good that you all have not had any issues. But my concern is that you are leaving it until your Councillors determine you have about 17 box drains that you have looked at in 2011. Now, is it in 2013, these same box drains are now going to come up on a list to be repaired? And I do not know that the Corporation tracks these things to see how often you repair a trace, or a road, or how well the construction work is being done, and that deals with your quality of work and not only a cost. Because we did not look at the time the project actually takes to be completed, because that also is another part of a project that you have to look at, but we are just looking at dollars
51 | P a g e and cents here, and is it that we are getting the quality of work—and I am not seeing anywhere that we will be tracking it, or any unit that would be saying that we looked at—for example, I brought up Jonathan Trace earlier—we looked at Jonathan Trace in 2011. We may have to look at this in 2015 or 2020. Do we have any system like that in the Corporation? Mr. Seepaul: Yes, we do and let me just indicate that there is a number of checks and balances and there is stringent oversight over this particular programme, for example, I would have alluded to the fact that we would have to prepare detailed estimates for each project. These estimates, when sent to the Ministry of Rural Development and Local Government, would have to be inspected by officers from that Ministry to ensure that there is proper justification for the allocation of moneys towards these projects, so that there is absolutely no possibility of duplication or any form of wrongdoing or anything like that. When funds are released and when contracts are awarded and when these projects are implemented, there is considerable supervision to ensure quality control and value for money. Also providing some degree of vigilance over these projects, for want of a better term, would be the local government representatives—the Councillors. They will also ensure that the work that is being done in their communities is in order. And before any moneys are paid for these works, council will have to approve payment. So, there are, in fact, several measures that are observed to ensure that the taxpayers’ money is properly spent. Mr. Obika: Thank you, Chair. So, I have two questions. One is for the Ministry regarding the submissions pertaining to local government reform, and the second is for the Borough Corporation regarding the releases, and if it has affected any of the services you provide for burgesses. So, the first question to the Ministry is, has the concept of fiscal federalism been taken into account given the lamentations of the Mayor, today, that a lot of the revenue collected goes into the Consolidated Fund? Fiscal federalism basically means you have an ability to tax at source or collect fees at source and also you have access to the fees, so it does not have to go into this one pool at central government. Has this paradigm shift been proposed in any form or fashion? Ms. Bascombe: You are asking a question which may be a bit above my pay grade, but I will attempt to answer. In the Draft Policy on Local Government Reform, it was envisaged that
52 | P a g e property tax which is collected would be retained by the Corporation. But, I know that the Property Tax Act is currently being debated and we await the outcome of the decision, in terms of where the property tax ends up— whether it is in the Consolidated Fund, managed by the Ministry of Finance or in each regional corporation. Mr. Obika: And, beyond property tax—because I am seeing income here as far back as 2010, it being $2.9 million. If these funds from all the Corporations go back to the Consolidated Fund, then they do not have access to them at the local level. Is it that proposals for these other types of income will be situated at the—they will have access to it at the local level? Ms. Bascombe: We have not examined other sources of funding as yet. Mr. Obika: Thank you very much. The other question for the Regional Corporation, given the issues that many Corporations have had with releases, does it affect your ability to service requests from burgesses? And particularly, if a burgess requires assistance regarding tree removal, land clearance, retaining walls—I am not sure if I have much retaining wall requests from Chaguanas Borough itself—but that type of thing, does the Borough Corporation assist? That is the first question, and the second question is, how many such requests have been fulfilled on an annual basis? Mr. Boodhan: I will just do one part again and the CEO will do the other. But from October 1st to the ending of April, we have an estimated shortfall of close to $20 million. It relates to our monthly subventions, for example, if we request $9.5 million we would get 4.8, 5.3, and that too has a great effect as it relates to our day-to-day operation in the Corporation. CEO? Mr. Seepaul: In specifically responding to the question, which relates to meeting the needs of our burgesses for infrastructural work and other related works, I think the Mayor’s response was more or less implying that without money we are seriously restricted in providing burgesses with the services that they so desperately need. However, I just wanted to point out that the Corporation is responsible for the maintenance of secondary roads, minor water courses, for certain public building at present like markets, recreational facilities and such like. So, we are responsible for those. So even before burgesses will identify needs in those areas, the Corporation is responsible for maintaining these facilities through it recurrent programme, through recurrent funds, right? Whenever unusual or irregular requests would be
53 | P a g e brought to the Corporation, the council will deliberate on them and decide whether the Corporation should honour these requests. So, from my recollection you pointed out; cutting of trees, et cetera. Yes, the Corporation does that sort of thing, providing that it is warranted, it is posing a threat, that we are not doing the work or carrying out the responsibility of private residents, which should come at their expense. So, these things are deliberated upon by the council and a decision is made based on these considerations. Mr. Chairman: Based on what the PS had said earlier with regard to the whole business of devolution and decentralization for local government, is that on the agenda, in terms—I know it is part of policy, but is that on the agenda in terms of governmental action? I am asking the PS. Ms. Bascombe: It is definitely on the agenda. Mr. Chairman: Okay, for action. You have any— Ms. Bascombe: I would like to point out that reform will happen incrementally. In fact, I was reading a 2004 document on reform and it mentioned that reform could take up to 10 years to be fully operationalized. In fact, numerous governments over the past 40 years have been attempting reform, and I think this is the furthest we have reached, in that, we have a Cabinet approved draft policy. But, as a population, I would like our citizens to bear in mind that it will happen incrementally, but it will happen. Mr. Chairman: Okay, what would full devolution and decentralization do to the need of the Ministry of Rural Development and Local Government to continue to function? Ms. Bascombe: With full devolution the Ministry of Rural Development and Local Government will be the “Ministry of Rural Development”, alone. Because the local government aspect will be managed at the local level. Mr. Chairman: Okay, so the concept requires, really, a significant amount of autonomy, incrementally given over time to the local government institutions. Thank you very much. Do members have any other questions? Mr. Obika: I want to have a follow up regarding that—fundamental to development of local economies in Trinidad and Tobago, is this whole concept of having access to the funds generated.
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So it will actually give you more incentive to generate more funds. Has the Borough Corporation suggested any mechanism by which that can be promoted, in terms of the whole concept of decentralization of the revenue management of the country? Or do you have any ideas regarding that? Mr. Seepaul: When this whole conversation about local government reform came to the fore again, under the current administration, understanding that central government was now seriously considering devolving of powers to municipal corporations, I, for one, started to adopt this mindset, as to how we can raise revenue on our own, without solely depending on government subventions. So this is something that we are constantly looking at. We have in the past, you know, initiated— not much—a couple of partnerships. One is the management of the Chaguanas market car park, partnering with NIPDEC, and that facility is resulting in the Corporation receiving a sizable amount of revenue on a monthly basis. We are now— Mr. Obika: Sorry to interrupt. Could you state how much revenue annually you expect to generate? Mr. Seepaul: Well, monthly it will be somewhere in the vicinity of $60,000 a month. So, looking at the options that may be available to us, we are constantly on the lookout for ways and means to raise our own funds. We have facilities, for example, the market that is currently being used, where people will have to pay for their stalls, et cetera. But we are also conscious of the current economic times in which we live. So, you know, we have to ensure that there is a proper balance, in terms of how we move forward in these areas. So, this is all I can say at this point in time. We have a few ideas—I do not know if the Mayor will want to contribute to this response. Mr. Boodhan: Yes, Chairman, as the CEO indicated in terms of the market—and we are very conscious of the fact that, for example, again, those vendors pay like $5 a day to sell in the market, and some of those fees that we have are really small fees. But, it is much more support to the community, to the burgesses and to the residents. But I would like to—based on the question that you asked on some of the ways forward, in terms of the monetary aspect—and one of the things that we have great challenge with in Chaguanas—and I think other corporations may have the same thing—is that Town and Country
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Planning/Building Inspectorate department, as it relates to local government. And the example I will put forward is that, that stymies develop when the process is slow and it stymies development in our case in the Borough of Chaguanas. And just to briefly chart the course, somebody needs to build a house; you draw your plans you send it to Town and Country Planning Department, who will approve it and send it to the Corporation, who in turn sends it to the Ministry of Health’s County Medical Officer of Health Department. And the Corporation itself has no input into that. So, those Public Health Inspectors—they do their aspect of it. So, the client itself—the home owner—there is a grave difficulty now in terms of tracking where those plans are. Then the County Medical Officer will send it back to the Corporation, who in turn will—so it is a whole long system that is not supportive of the person, and not supportive, in terms of the local economies. And I think that there was a planning and facilitation Bill, and if the regions—when we talk about the local government reform—if one of the areas that could be—as a pilot in the different regions—in the case of Chaguanas, three years ago, we had identified space to ask Town and Country—we wrote several letters asking them if they could have a presence in Chaguanas to help to fast track that arrangement. So, from the time that you get your approval from Town and Country, sometimes it takes three months, six months—it could even be more if there are different challenges with it. And that creates great distress for persons who want to build, who want to expand their businesses, for companies who want to come in to Chaguanas—in terms of commercial, small, medium or large, and I think that is a very grave area that we need as a—and this Committee—I am just being forward to this Committee—that they need to look at—and, some kind of recommendation made to how we can move that process forward. Mr. Chairman: The laws for that, even without the new law having to do with decentralization and devolution of power to local government, as you say, the Planning and Facilitation of Development Bill, exists—and the integration of Town and Country Planning functions and local government functions can easily be achieved if those institutions are brought together in a devolved way across 14 Corporations in the country.
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It has already been achieved for the house of assembly under the same law and it can also be done for local government across the country. So that is something that is achievable, and I know it is doable and it will certainly advance the cause of decentralization and devolution of power. MP Leonce, you had something to ask. Mr. Leonce: Yes, just one quick question. I looked at one of your responses under projects, which stated there were some challenges, in terms of having to pay protection money or persons wanting to demand protection money, which would have caused some of the projects you had planned, to not go ahead or stop—which would mean, moneys that would have been accounted for, to spend on projects, would not have been spent. What are some of the strategies you all are implementing or have implemented or are going to implement, to mitigate against things like that. I will give you an example—a lot of times, some of these things happen. Sometimes the community does not feel involved in projects—sometimes simple communication with persons within the community, or even encouraging contractors from within the community to do the work. What are some of the strategies you all have, will, or plan to implement to mitigate against this? Mr. Seepaul: Well, you have actually answered your own question because the incident that we are referring to occurred last year on one of our job sites. The contractor that was hired to carry out that particular project—he was accosted, he was physically assaulted for the mere reason that he was not, you know, coming up to the demands of these individuals. Now, we try to encourage contractors who would do work for the Corporation, that they should try as much as possible to employ people from the various communities and I am pretty certain that they do. In this particular instance, the same was true, where some of the same individuals who were applying pressure—they were employed, and from my information they were handsomely paid to do work for the contractor. That apparently was not sufficient so they, you know, they resorted to take a different approach. What we try to do in Chaguanas, and I say “we”, making reference specifically to the Councillors for the different areas, these works are being done in communities, for members of the community, for their benefit to improve the quality of life that they enjoy. And I know for a
57 | P a g e fact that the Councillors of the Chaguanas Borough Corporation—they make it their business to follow up on these projects, as I would have said earlier, and to ensure that the members of the community get the kind of service that they expect from the Corporation. I know that where we may have challenges with people who may have criminal tendencies, et cetera, these Councillors, being familiar with many of these individuals, speak to them—they would placate and try to get their support, try to talk them out of potential violent situations on job sites. So, they play a very important role, but, the fact of the matter is that there are some, in my humble view that, you know, seem bent on being aggressive and violent. 12.25 p.m. Mr. Leonce: I understand what you are saying. If all those strategies have been implemented in terms of employing persons from the community, encouraging contractors from within the community and you are still having those challenges, what then is the strategy? Have you made some partnership with may be the police force? What then is the strategy? Because the reason why I am asking this is because the corporation is there to serve the communities, and there may be a few that may be doing this, because what you have said to me is one incident. So, I do not see it as something that has plagued your operation. So for those one or two incidents, what is the strategy to ensure the community benefits from the service? Mr. Seepaul: Well, the thing about it is that the police, they have challenges with their own resources. The corporation, where there is the resident municipal police, we also have challenges. Remember, this kind of incident is something that we have to address 24/7. It is not to say the police will monitor job sites, because anything can happen. After giving it a lot of thought and after having discussions with colleagues, the only workable solution would have to cater for paid security on these job sites for as long as the project is ongoing and this, of course, will take away from the project itself in terms of value for money. This is the only thing we can come up with at this point in time. Mr. Chairman: Okay. We will move on now to Sen. Ramkissoon. Please be crisp in your answer. We are going to try to close up now at this point. Ms. Ramkissoon: From your responses, you have said that the corporation has an emergency operations plan and I would like to know, when last this was reviewed or even revised. And
58 | P a g e considering that the corporation has a vacant position of the Disaster Management Coordinator, who now is responsible for this emergency operation plan? So that is three questions. Mr. Seepaul: Okay. I will answer the last one first. Our interim head of the Disaster Management Unit is our Engineer, Mr. Ogoma. He is basically providing guidance to other members of that team. The response pertinent to the Emergency Operation Centre, I would like to refer that to a member of the EMU, Mr. Badassie. Mr. Bedassie: As to the actual activation of the Emergency Operation Centre, it is activated when we have an emergency that is large scale that would warrant the activation of the Emergency Operation Centre. The last time we had a full-scale activation was probably during the tropical storm Bret. Ms. Ramkissoon: Do you have a plan, an emergency operations plan? Mr. Bedassie: Yes, we do have an emergency operations plan that is reviewed on an annual basis. Ms. Ramkissoon: And that was developed when? Mr. Bedassie: It was first developed around 2008 when the unit went into existence. Ms. Ramkissoon: And every year they have planned drills or how is it? Mr. Bedassie: The plan is essentially a life plan, so it is updated. There are changes in terms of staff members, and even the plan is always evolving also in terms of the function of the unit. Ms. Ramkissoon: Any member of the community is aware of this? Mr. Bedassie: It is an internal operations plan, so it is not really essentially shared with the community. Mr. Chairman: All right. There is, in addition to the questions asked here, a committee that is focused on disaster management and preparedness. So we will await the report of that committee, because it also includes the local government system under its jurisdiction. I want to take the opportunity to thank everybody for their contributions here today: members of my Committee, both present now and present at the start of the meeting. I also want to thank the Chairman of the corporation and the CEO and the Permanent Secretary of the Ministry of Rural Development and Local Government and your entire staff for being present, first of all, and secondly, for contributing freely and answering the questions. I want to also thank the Acting Deputy Auditor General and members of his staff for being
59 | P a g e here present and participating also when necessary during the course of the questions. I also want to thank the media and members of the public who are here present. But as I close, I do want to say that we are concerned about the audit reports that we have seen up to 2011, and the reason we did not pursue them in any grave and great detail, is because of the two issues that came up here. First of all, the problems of staff and staffing that you have in this area, not just the changes, but the infrastructure of support in the corporation, first of all, and secondly, the structural problem that the Permanent Secretary agreed was an issue in terms of managing these things. But we are not happy with the report and we are not happy with the fact that you do not have your audited reports up-to-date with the Auditor General. You said, CEO, two things which were very encouraging, one is that you will use this opportunity and this experience to learn and to improve and, secondly, you actively volunteered to take responsibility for bringing these matters up-to-date, that is to say, the audit reports. So we will hold you to that. If there are any additional questions that we want to ask you, the Secretary to the Committee will convey those questions to you and ask you to respond to us but, in the meantime, we want to express our concern. Secondly, we want to encourage you to learn from this experience and, thirdly, we want you to produce the audited reports, up to mark, and have them produce and to bring them up to date for the Auditor General’s Office so that we could get, at least, this one corporation in a way that is satisfying to the general public, because fiduciary responsibilities are important and you do not want to ignore them. From this Committee we will send to you a list of things that we feel should be actioned, including bringing those audited reports up-to-date. Secondly, we will send to the Ministry of Rural Development and Local Government a list of things that we feel might be usefully addressed, and we will recommend that we proceed, as a country and as a governance model, with the devolution of power to local government taking into account that there are many structural deficiencies now which must be corrected if we are to make that reasonable and, secondly, that there is an issue of accountability and checks and balances which must be taken into account in the devolution and decentralization process and catered for in terms of the
60 | P a g e human resource capability and the structuring of responsibilities for accountability in the system. So we want to thank you all, and I thank the members of my Committee too, who so ably represented the people by asking questions that came up within these documents and outside of the documents. So, thank you again, and we wish the corporation and the Ministry good luck. 12.35 p.m.: Meeting adjourned.
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