WITH MASSIVE declines in cash generated from its operations and the organisation's liabilities exceeding its assets, a senior member of a parliamentary oversight committee has declared that the Urban Development Corporation (UDC) is insolvent.
At a meeting of the Public Accounts Committee (PAC) on Tuesday, committee member Karl Samuda demanded answers from the corporation's principals about how the entity planned to reverse the financial debacle that has beset the public body.
"You are going south according to the report," said Samuda, in relation to a performance audit done by the Auditor General's Department (AGD).
"The rhetoric is going north and the actual result is going south," Samuda contended.
Despite efforts to implement some of the recommendations set out in the AGD's report, the UDC is still struggling to pull itself out of its current financial woes.
The AGD report indicates that cash generated from operating activities declined by 167 per cent plunging from negative $409 million as at March 2010 to negative $1 billion as at March 2012.
According to the report, the UDC's current liabilities as at March 31, 2012 exceeded its current assets by $367.7 million moving from a positive $898.7 million as at March 2011.
The report also highlighted that the UDC used customers' land deposits to finance its operational activities.
In a documented response, the corporation said it would ensure that this did not recur, and as such, designated an escrow account for all land sales.
Onika Miller, permanent secretary in the Office of the Prime Minister, which has responsibility for the UDC, told committee members that the UDC was seized with the issue of its financial health and viability as a development agency.
"The board, which was appointed last year, has taken the financial viability of the UDC as the highest priority," she said.
According to Miller, a strategy document has been prepared to restore the corporation to financial health.
In the short to medium-term, the corporation will focus on staff optimisation programme, divestment of non core assets and implement further investments at Dunn's River in St Ann to improve yields from the attraction.