JUTC becomes transparent
A.C. Countz, Guest Columnist
What a welcome surprise! And an even a bigger surprise as it comes from the Jamaica Urban Transit Company (JUTC).
The JUTC has made a big step forward to demonstrate accountability. The company secretary, Carlene Ross, has sent us some dated accounts, but included also the in-house monthly accounts of the JUTC for August 2014.
This is a major change to the current practice of so many public entities who believe they cannot release their financial results until they are tabled in Parliament. And, of course, so many are years and years in arrears.
The board of the JUTC contains some impressive people - president of the Jamaica Theological Seminary, Rev Dr Garnett Roper; CEO of Tankweld, Christopher Bicknell; Director of Internal Audit at the Ministry of Finance and Planning, Suzette Campbell; among others. CEO Colin Campbell is the man running the show.
One can therefore interpret the disclosure of almost-current financial in-house accounts, not yet tabled in Parliament, with the endorsement of directors from the Finance Ministry as well as one of the major operating ministries in Jamaica - Ministry of Transport, Works and Housing - as being the accepted procedure for public companies.
With this fine precedent, we can only hope that all the other more timid, less enlightened and bureaucratic government entities will change their tune. For example, representatives of these companies have refused to submit current accounts as these have not been tabled in Parliament - managing director of the Factories Corporation of Jamaica, Clive Greyson; the Fire Brigade, which amazingly indicated that its in-house accounts for December 2013 are "currently being audited"; Pat Richardson of the Post Master General's Office indicate they are awaiting advice from Phillip Paulwell's ministry; Shermaine Robotham of the National Health Fund; Sannia Sutherland, executive director of the National Family Planning Board - the NFPB does not even comply with the time limit set to respond to requests under the Access to Information Act) Nicolia McDonald of the Ministry of Tourism and Entertainment; and Coretta Haughton of the Jamaica Mortgage Bank.
These are all entities that, in one way or another, have refused to provide either current audited or in-house audited accounts. They all must now feel embarrassed that the example set by JUTC has put them to shame. Perhaps they need stronger boards or more committed ministries/permanent secretaries.
The JUTC in-house accounts for the five months ending August 2014 show the following:
i) An operating year to date loss of $1.5 billion prior to a grant from Government of $1.2 billion. In addition to the grants Government has donated assets totalling over $22 billion over time. Operating income for the five months to August was flat in comparison to the prior year. The need for fare increases is obvious.
ii) During the period to August the JUTC was losing money at the rate of $315 million per month prior to the government grant.
iii) The JUTC lost more than $7.4 million in inventory losses or write-offs.
iv) The JUTC Portmore depot spends some $15 million per month on toll charges.
v) On a monthly basis:
a) gross operating revenue is $365 million.
b) operating expenses is $538 million.
c) Administrative expenses have jumped up by over $90 million during the prior month and losses from operations have increased by some 15%.
vi) Long term liabilities of $1.4 billion largely provided by PetroCaribe, Bank of Nova Scotia and a new loan from the Development Bank of Jamaica. The JUTC borrows money from NCB ($134 million) and keeps funds on deposit at BNS ($57 million) and also in a deposit insurance fund at NCB ($56 million). This seems an unusual procedure.
vii) The Government owes the JUTC over $66 million for tax and GCT refunds.
viii) These results have been improved by the JUTC treating as deferred a material amount of its expenses.
ix) JUTC owes over $3.8 billion for statutory, salary and pension payables and has outstanding insurance claims exceeding $750 million.
x) Its bus repair bill has soared to $495 million (budgeted cost was $289 million) and it appears to spend just under $6 million per day on fuel and lubricants and in excess of half a million dollars a day on tyres.
xi) Professional fees for services not disclosed in the monthly accounts exceeded $8 million per month.
This column thanks the board and management of the JUTC for letting the public see their in-house accounts and awaits receipt of the accounts audited by PricewaterhouseCoopers for the year to March 2014 (now in arrears).
Maybe more public entities need chairmen drawing on divine guidance and business people of calibre on their boards.
This column reviews the audited and in-house accounts and reports of companies and entities owned by or are influenced by Government.
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Minister: Dr Omar Davies
Managing Director: Collington Campbell
Chairman: Rev Dr Garnett Roper
Other Directors: Christopher Bicknell (vice chairman), John Ralston, ACP Wray Palmer, Carolyn Gardener, Suzette Campbell, Winston Davis and Richard Depass.