Spending festival - Audit flags millions in overpayments, questionable hirings, expenditure at JCDC
The employment of the close associate of a high-ranking government official for a job already being performed, contract payments before work completion and seemingly routine overpayments are among major findings in a leaked 2019 audit report on the Jamaica Cultural Development Commission (JCDC).
But the JCDC, in declining to provide details, said the document obtained by The Sunday Gleaner “contains inaccuracies”, labelling it “an incomplete draft that sought clarity and information in the preparation of the audit report”.
“The disclosure of this internal confidential document breaches operating procedures and seems to be motivated by malice and ill will,” said board chairperson, Mexine Bisasor, in a statement late yesterday afternoon.
The auditor general and the Integrity Commission must “step in immediately”, urged two staffers, lamenting the state of affairs at the main government agency tasked with promoting the Jamaican culture.
The audit was done by the JCDC’s internal audit unit and its findings submitted on March 15, 2019 to Daffodil Thompson, then interim executive director of the agency, which falls under the Olivia ‘Babsy’ Grange-led Ministry of Culture, Gender, Entertainment and Sport.
“Red flags” and “discrepancies” that emerged while an assessment of payroll records was being done triggered an examination of procurement, human resources, salaries, asset and office management, accounts and parish office operations.
“These discrepancies are hereby submitted for immediate intervention and to put the appropriate controls in place to mitigate any further losses to the commission,” read the audit manager’s memorandum on the 35 damning findings.
Among the revelations was that in 2017, attorney-at-law and music expert Ewan Simpson, a JCDC board member at the time, was directly contracted to provide $1.4 million in artistic services.
JCDC paid him $700,000 for the production of two music tracks for the Jamaica 55 Commemorative Album in 2017.
In July 2018, Simpson was paid $433,000 for his band, In2nation, to perform at the Prime Minister’s Medal of Appreciation awards ceremony, and $250,000 for work in August at the Independence Village.
Confirming that the JCDC produced the events, Simpson, who served up to 2019, said there was nothing wrong with him being contracted.
“It was not the JCDC who was hiring the band,” he said, noting that the Office of the Prime Minister was the entity hosting the event.
“The JCDC is used as a vehicle in government circles to execute certain events. So, the fact that I’m a board member of the JCDC doesn’t mean that there could be any undue influence … . It is not the JCDC itself with approved events by the board of the JCDC that is now choosing to hire one of its board members.”
“I don’t see a problem,” Simpson added, noting that the board led then by Hugh Nash was aware of the engagement.
Bisasor took over as chairperson in 2019 and is expected to lead a new board of around 14 people, fewer than half the number which served up to the last election.
Regarding the album, Simpson said he was asked around July 25, 2017 to produce the two tracks because of “challenges” to get other producers to deliver within a two-week “short-run window”.
He said a 50 per cent deposit was paid at the start of the contract, but the balance was paid “some time in the following year”, long after he delivered the tracks.
The status of that album project is unknown.
The Government’s Handbook of Public Procurement Procedures governed contracting at the time as the 2015 Public Procurement rules did not take effect until 2019.
Both exclude goods, works and services relating to the staging of cultural productions from requirements for competitive bidding and the part of the procurement process that deals with things like advertising and unsealing of bids.
“There are good reasons for this accommodation. Event organisers are peculiar in their requirements and a competitive bid may not satisfy tastes. Small service providers can get a chance,” explained a senior government procurement specialist. “However, being mindful of potential for conflicts of interests and ensuring procurement principles of transparency and equity are still important.”
A similar concern about procurement was raised about $2.4 million worth of contracts given to three entities in 2018.
One entity received $900,000 for make-up services, another got a similar amount to produce three music videos, while $600,000 was paid to a company to do production work for two videos.
The auditor claimed that there was no evidence that the contracts went through the procurement process and that signatures were missing from the documents. In one instance, final payment was made 10 days before contracted.
In 2018, approximately $25,500 was reportedly spent to buy a bandana outfit for the high-ranking government official.
The auditor said even with a discount of $6,250, the full amount was still paid over, and at the time of the audit, there was no indication that the additional sum was recovered.
There were more revealing findings that raised serious questions about the JCDC’s accountability mechanisms.
Thirteen people were employed on contract at JCDC up to January 2018, the report said, noting that the posts were not on the approved establishment.
It said $2.5 million monthly due to full-time staff in increments, seniority, special allowance and pensions was used to pay the contract workers.
The government official’s close associate was said to be paid $100,000 per month for work that was already being done by a protocol and guest relations coordinator and a hospitality officer.
The contract was for the period December 1, 2018-May 31, 2019.
“Concerns are raised as to why this person was contracted to provide the same exact services … not value for money,” the report concluded.
The payment of at least $2.4 million to six JCDC workers in special allowances was also questioned.
In one instance, the auditor noted that $281,700 was paid to two persons between October 2016 and May 2017 for doing the same duty.
It was also not clear to the auditors how time worked was validated or the additional duties that resulted in payments of more than $2 million to four people between February 2011 and December 2018.
JCDC staff signing contracts on behalf of suppliers, contracting services without approval from human resource, performance evaluation reports not being done consistently, retired staff failing to get their correct pension as increments were not calculated and unauthorised alterations to personnel files were also flagged.
The Sunday Gleaner submitted questions to the JCDC last Wednesday seeking responses to each finding, but no response came until the brief statement from the chairperson.
Similar requests were made Thursday to Denzil Thorpe, permanent secretary in the ministry, but there’s been no response.
Grange declined to comment when contacted on Friday.
Bisasor said that the JCDC will respond “within the week” based on “the official 2019 audit report which was approved by the board”.
Still no appointed head
It has been a revolving door for interim heads since the death of former Executive Director Delroy Gordon in March 2017.
Chartered accountant Orville Hill, who was seconded from the Jamaica Social Investment Fund, served as interim executive director up to November 2018, when Daffodil Thompson took over, having been seconded from the Ministry of Education.
Thompson’s contract ended in October this year, paving the way for Marjorie Leyden-Kirton, a senior director at JCDC, to become the latest acting leader, effective November 1.
“Why is it taking so long for a permanent replacement? We are not short of competent and qualified people,” lamented a senior employee of the commission.
While Thompson was in the acting position, the commission advertised for a permanent replacement, but is yet to give precise reasons for that process not resulting in an appointment.
Based on “the limited number of applicants”, only two candidates, including Thompson, were interviewed, read a November 6 JCDC statement provided by Andrew Clunis, the entity’s marketing and public relations manager.
The statement did not go any further to explain the outcome of that process and nothing has been forthcoming despite multiple requests.
Further Sunday Gleaner questions to the commission seeking to verify reports that the human resource subcommittee of the board had recommended Thompson for full board consideration have not been answered.
The agency, which has been budgeted to spend over $200 million to promote local culture, has said it “anticipates” installing a permanent executive director within four months from a “larger cohort of suitably qualified applicants”.
The last major auditor general examination of the JCDC’s operations took place in 2010-2011, and at the time, it flagged “weaknesses in the areas of salary preparation, procurement of goods and services, management of fixed asset, cash management and the internal audit function”.