Wed | Dec 7, 2016

Grant-funded Banana Board lacks vitality, AG lacks vital funding

Published:Wednesday | September 3, 2014 | 12:00 AM

A.C. Countz, Guest Columnist

The Banana Board, established in 1953, is woefully lacking in accountability - the last available accounts were December 2012 and the 2013 accounts are "under review".

This is surprising as it is heavily funded by the European Union - via grant of $20 million in 2012 and $43 million in 2011 - an organisation that generally is particular about transparency and accountability.

We thank General Manager (GM) Janet Conie for sending us the last publicly available accounts that were for December 2012, almost two years ago. The last accounts on Banana Board's website are for 2010.

Mrs Conie, surprisingly, has indicated that the correct place for us to get accounts is through the Houses of Parliament. Would Acting Minister Derrick Kellier support this strange idea of accountability?

Banana exports fell 21 per cent in 2013. Production volumes totalled 37,000 tonnes in 2013; 47,000 tonnes in 2012; 46,000 tonnes in 2011; 53,000 tonnes in 2010 and 45,000 tonnes in 2009.

Not only are the Banana Board accounts late in preparation, but the 2012 accounts are qualified by the external auditor, KPMG, which blames "the absence of independent confirmation and inadequate supporting documentation of the following balances ... special loans totalling $42.9 million ... and advances from Government of Jamaica of $3 million".

The board appears quite irresponsible with honouring repayment of amounts borrowed. Repayments due March 1, 1986 on two different loans, March 1983 and June 1985, among others, have not been made. This delinquency occurred whilst the Banana Board had liquidity of almost $100 million. Why does the Development Bank of Jamaica and Government not require repayment of their loans?

In 2012, the Banana Board had income of $112 million, including grants of $74 million and $20 million from the GOJ and EU Banana Support Programme.

The Board recorded a profit of $18 million after paying staff costs of $60m - why do these grant agencies give the agency funds to make a profit? The general manager earned $5.8 million. Directors received no compensation.

The Board's Banana Insurance Fund was set up to provide insurance coverage for banana growers. It has been substantially inactive for a number of years. It owns a building, managed by Banana Board that it appears to lease to the All-Island Banana Growers Association, and a canteen concessionaire at below market rates.

Perhaps the Banana Board's Interim Chairman, Donovan Stanberry and GM Conie could explain why this fund is not wound up. It has over $10 million in the bank and should probably sell its building.

Much of the Board's 2012 report deals, in admirable detail, with assistance given to farmers after the October 24 Category one Hurricane Sandy, as well as a statement and assessment of customer service delivery.

interesting clause

The report has an interesting clause: "At the time of reporting, 49 favourable applications in the PC Bank were awaiting disbursements totalling $52.2m. Final approval was stalled as the two chip manufacturing stakeholders, Native Food Packers and Jamaica Producers Group, reneged on their commitment. The manufacturers imposed new and unfavourable conditions to farmers that were not agreed in the MOU." No more details appear to be given.

The Banana Board lacks vitality and appears to have fallen into lethargy. A shake-up is needed to improve accountability. Why does the current board - Donovan Stanberry, Grethel Sessing, Roger Turner, Joy Crawford, and Robert Chambers - allow this state of affairs to exist?

Directors should resign if the company they serve cannot produce timely accounts.

Administrator General should double its fees

The Administrator General's Department (AGD) needs legislative changes, and ought to double its fees.

This column, on May 4, 2014, gave facts that showed the AGD was way behind in its work - large delays in 50 per cent of the 8,000 cases being administered, failure to update records, failure to collect rent due. See http://jamaica-gleaner.com/gleaner/20140504/business/business8.html

To rectify this situation the AGD is pressing for what appears very reasonable and practical changes to the Administrator General's Act.

The first change would help the AGD deal with some 3,000 multi-generational "backlog estates" by permitting the AG to distribute the assets of such estates, having complied with the procedural provisions in the act.

The second will allow the AGD to avoid going to court to get letters of administration where the Administrator General is already in statute bound to be the administrator.

What has happened to these changes? Minister Mark Golding might be busy with IMF-encouraged legislation but he should find the time to help all these beneficiaries who cannot get their money.

In 2013, after charging for its services, the AGD lost $103m and received from the Consolidated Fund a $113m grant - up from $92 in the prior year.

The AGD would have to increase its fees by about 90 per cent in order to break-even. Maybe it will be inspired by the JUTC increase in fares.

There does appear to be something happening at the AG's department. In the period 1991 to 2013, some 8,595 cases were closed and 2,191 letters of administration granted.

This column reviews the audited and in-house accounts and reports of companies and entities owned or influenced by Government.

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Responsible Officials

Administrator General and CEO: Lona Brown

Advisory Board: Chairman Rev Rennard White, Marlene Aldred, Marie Wint McKenzie, Tracy Ann Long, Rose Phillips, Nadine Wilkins, and Henry Pratt.

Responsible Minister: Derrick Kellier (Acting) General Manager: Janet Ferguson Conie Interim Chairman: Donovan Stanberry Deputy Chairman: Grethel Sessing

Other Directors: Roger Turner, Joy Crawford and Robert Chambers