Fri | Sep 22, 2017

Bonus breaches and gracious gratuities ... Auditor General raps Port Authority

Published:Tuesday | July 26, 2016 | 7:20 PM
The Auditor General has reported millions of dollars in bonus over-payments to senior employees at the Authority and multiple pensions to the same individuals.

Damion Mitchell, Editor - Radio & Online

The Auditor General has uncovered grave concern about governance practices at the Port Authority of Jamaica.

In a special audit tabled in Parliament today, the Auditor General reported millions of dollars in bonus over-payments to senior employees at the Authority and multiple pensions to the same individuals.

According to the Auditor General, the practices breach the Public Bodies Management & Accountability Act as well as directives from the Finance Ministry.

She found that the employment contracts for 14 senior officers provided for the payment of a retirement benefit, at the discretion of the Board.

But this was not sanctioned by the Finance Ministry – a clear breach of government guidelines.

In particular, one of the 14 senior officers was found to have benefitted from three pensions: one valued at $120,000, the second at $52 million and the third at US$554,000.

That same officer was paid a bonus totalling $31.33 million covering the contract period November 2004 to October 2013.

The Auditor General also found that the contract of another senior officer who was already getting a Government pension had a contract that provided for a second retirement benefit, plus gratuity amounting to $6.6 million for the period April 1, 2012 to March 31, 2015.

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IN PHOTO: Auditor General Pamela Munroe Ellis

The Port Authority has since sought to correct the breaches by removing the provisions for retirement benefit from the contracts and the Finance Ministry is now considering the matter.

Meanwhile, the Auditor General has found that between April 2011 and March last year, 14 senior officers at the Port Authority were overpaid gratuity totalling $15 million.

The contracts of the senior officers provided for bonuses of 25 per cent of gross taxable emoluments, however, the policy of the Finance Ministry is that gratuity should be paid only on basic pay.

After committing the breach, the Port Authority reportedly asked the Finance Ministry for a waiver for the existing senior officers but its request was turned down.

The Ministry had reportedly told the Port Authority that although the provisions in the contracts of the 14 senior employees were legally binding it could not approve bonuses of 25 per cent on gross taxable earnings.

Another key finding of the Auditor General was that a senior officer was paid basic salary and motor vehicle allowance in excess of the maximum of the applicable Government’s scale.

The Auditor General has recommended that the Finance Ministry take steps recover amounts overpaid in retirement benefit and gratuity.

She has also recommended that the Authority ensures that employment contracts conform to the provisions of the Public Bodies Act and government policies.

At the same time, the Auditor General says the officer who approved the unauthorised benefits should be advised that he or she could face administrative action.