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EU Head to discuss Auditor General's report on Cane Expansion Fund with Gov't officials

Published:Friday | July 1, 2016 | 7:00 AMEdmond Campbell

Head of Cooperation at the European Commission JÈsus Orus Baguena says he will be seeking to meet with government officials to discuss the findings of the auditor general on the Cane Expansion Fund (CEF), which is financed by the European Union (EU).

Baguena told The Gleaner yesterday that he was still reviewing the Pamela Monroe Ellis report, which was tabled in Parliament earlier this week.

"I will be discussing this matter at the highest level," the EU official said.

Yesterday, the Sugar Industry Authority (SIA), which administers the CEF, responded to the auditor general's report, which indicated that the authority "appeared not to have complied with the provisions of the Cane Expansion Fund Loan Policy".

CONCERNED ABOUT APPLICATION PROCESS

The auditor general had also raised concerns about the loan application process, noting that it appeared that farmers had not submitted a loan application as a prerequisite for loans.

However, George Callaghan, chief executive officer of the SIA, said that at no time, to the best of his knowledge, was anyone granted a loan from the CEF without a completed loan application form, including a business plan.

He said approvals by the CEF loans committee were recorded in the minutes of meetings.

"It is to be noted that there is disagreement between the Auditor General's Department and the CEF as to whether the minutes of the CEF committee constitute the loan approval or other administrative documents of the CEF," the CEO added.

Callaghan also indicated that progress reports had been received from field officers for goods and services supplied to the borrower and for which payment was due from the CEF.

He said that loan funds from the CEF were disbursed directly to suppliers of goods and services and not directly to borrowers unless they were suppliers themselves.

"It is to be noted that a record of all loans and grants made by the CEF appear on the accounting system of the CEF for purposes of deducting loan repayment from borrowers' cane proceeds. These records include all loans to entities, which the auditor general claimed were not approved," the CEO said.

However, in relation to loans and grants under the CEF, the auditor general's report cited cases in which no evidence of application for loans had been produced by the SIA.

In the case of one company, the auditor general reported that there was no evidence of application or approval for eight loans disbursed between calendar years 2009 to 2014.

edmond.campbell@gleanerjm.com