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PAC chides Saunders for JDF arrears to suppliers

Published:Wednesday | May 13, 2015 | 12:00 AM
Pamela Monroe Ellis.

WITH THE Jamaica Defence Force (JDF) owing more than $507 million to suppliers of goods and services for more than 90 days in 2014, members of Parliament's Public Accounts Committee (PAC) yesterday chided permanent secretary in the Ministry of National Security Major General Stewart Saunders for breaching Section 49(1) of the Financial Management Regulations 2011.

Under these regulations, accounting officers are required to settle payments by their departments for all goods and services received within a period of 30 days.

Auditor General Pamela Monroe Ellis had indicated that the JDF's commitment control process was not achieving its objective of ensuring that all expenditure is supported by available funds. She said this might have contributed to the JDF owing suppliers $634.5 million as at June 30 last year.

PAC member Edmund Bartlett said the committee took the matter very seriously, noting that it has great implications in terms of the accountability structure within the Government.

Lieutenant Colonel David Cummings of the JDF said that in future, the army would not spend more than the monthly warrant allocated to it. "Our expenditure will not go beyond what is authorised by the Ministry of Finance in the monthly warrant," he insisted.

In its response to the auditor general, the JDF pointed out that it had to respond to various emergencies such as search and rescue, casualty evacuation, and ongoing operational support to the Jamaica Constabulary Force. Faced with mounting bills over extended periods, the JDF said it would have to curtail some of its non-core activities.

Commenting on the issue, Monroe Ellis said it seemed that the monthly provision to the JDF was only sufficient to meet recurrent expenditure and not necessarily attendant costs in terms of emergencies.

Major Saunders had earlier pointed to the current fire raging in east rural St Andrew and St Thomas, adding that the JDF could not contemplate emergencies such as bush fires, and as such, would incur additional costs when it deployed equipment and resources.

"There are certain issues that the JDF will be called on to address, and the risk that you run is that staying within a commitment control would mean that the JDF cannot deliver, and there are other implications to that," he said.

Commenting on how the arrears would be reduced, Saunders said the Ministry of Finance had allocated $200 million to pay outstanding sums to Petrojam.

where will funds come from?

He said the JDF had been in dialogue with the Ministry of Finance to clear the significant arrears to suppliers. "They have promised that they will make the allocation to us to reduce the arrears," Saunders said.

However, Deputy Financial Secretary Hope Blake said the Ministry of Finance had provided an amount for fuel and would allocate another $50 million for other payments this month.

A seemingly dissatisfied committee chairman, Audley Shaw, enquired where additional funds would be coming from to pay the amounts owed to both large and small suppliers of goods and services.

"It appears to me that there is no resolution in sight, so we have these regulations, and no doubt we have passed another IMF (International Monetary Fund) test, but, in the meantime, the bills are not being paid," he charged.

"As the chief accounting officer of the ministry, I think you (Saunders) need to take this matter of the persistent arrears of the JDF in hand," he said.