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Factories Corporation pays millions to outside attorneys, Auditor General concerned

Published:Wednesday | June 8, 2016 | 9:31 AM

The Auditor General’s Department has raised concerns about millions of dollars spent by the Factories Corporation of Jamaica (FCJ) for private legal services despite having an in-house attorney who could have done the job.

The department says an audit covering the period March 2011 to December 2015 found that the FCJ engaged attorneys to provide conveyance services instead of using an attorney employed to the corporation.

It noted that, based on the FCJ’s salary scale, the department's estimated legal costs would have been about $26.9 million for the period under review, had the corporation used an in-house legal officer.

However, the Auditor General’s Department pointed out that, in one instance, the corporation incurred legal fees of $48.9 million because the entity paid two separate legal firms in relation to the same transaction.

It was also revealed that the FCJ engaged two board members to provide conveyance services for the purchase of 200 acres of land, valued at $900 million from the Urban Development Corporation.

The department noted that the lawyers were paid legal fees totalling $26.4 million.

In its response to the audit,  the FCJ told the auditor general that the corporation received legal advice and opted not to use a staff attorney as that person would not be able to give an undertaking in a conveyance matter unless they are in possession of the funds.

However, the FCJ did not furnish evidence of the legal advice it received to the auditor general.