JUTC provides terse response to damning AuGD report
Six months after a number of concerns were raised in an Auditor General’s Department (AuGD) report last July, the Jamaica Urban Transit Company (JUTC) has provided a spare response to the findings, dismissing some of the issues raised.
In one instance, the AuGD had flagged the JUTC for making car-rental payments of US$2,400 monthly for its acting managing director for 114 calendar days, totalling $1.2 million, without approval from the finance ministry.
The AuGD pointed out that “except in the case of emergency, no ministry, department, or individual shall enter into a contract for the hireage of a motor vehicle, whether through the hire fund scheme, private rental agency, or private individual without the specific permission of the Ministry of Finance and [the Public Service]”. It pointed out that officers in breach were liable to be asked to repay the amount.
But in its response, the JUTC said that it had reviewed all government policies regarding motor vehicles “and found nothing applying to public bodies such as the JUTC”.
It added that in approving the transaction, the board “acted in good faith as it was not aware of any GOJ policy that prohibits such a decision”.
Human resource issues
The AuGD had also raised several concerns over human resource practices at the state-owned bus company, including filling posts without advertising vacancies to ensure transparency in the recruitment and promotion process.
In one case, auditors found that although the post of security manager was advertised in December 2018 and four candidates interviewed, the “JUTC engaged another officer who was not a part of the official recruitment process, on a one-year contract”, saying that the process did not yield a suitable candidate.
Additionally, there was no evidence that the minimum qualifications as outlined in the job descriptions for some senior managers were met.
In a short response to these and other issues, the bus company simply said: “The Human Resources Department has since strengthened the recruitment procedures in place and is now compliant.”
As its managers appear before Parliament’s Public Accounts Committee today, they will be pressed to provide more comprehensive responses to the alleged breaches.
Among the matters that could also be placed on the table is the increase in maintenance outsourcing costs between 2014-15 and 2018-19 despite the bus company hiring an excess of mechanics.
The AuGD had noted that over the period, the company outsourced approximately $419 million in maintenance and repairs services to the local dealers of its main bus manufacturers, an increase in cost of almost 364 per cent between 2014-15, when it was $26.1 million, to $120.9 million in 2018-19.
“At the same time, we saw no structured mechanism for JUTC to assess value for money for the work done by these external entities,” the AuGD noted, adding that when requested, the company did not furnish it with the framework that guided its decisions to outsource repairs and service work.
“From our review of the purchase orders, we noted that outsourced maintenance activities often included basic servicing of JUTC buses,” the AuGD said. “ ... The increasing trend in outsourcing ran counter to the achievement of value for money in the context of JUTC’s maintenance improvement initiative introduced in FY2015-16, which assigned responsibility for all aspects of maintenance to each supervisor.”
The JUTC said the outsourcing of maintenance work on its Golden Dragon buses were partly due to an increase in unscheduled repairs from other buses, some as a result of accidents, so it decided to have the dealer “continue with the maintenance of the fleet to preserve the life of the buses”.
It added that since last August, it has assumed the full maintenance of these buses.
Other areas of contention include the unapproved staffing capacity, which ran to $1.15 billion for the five-year period under review, and the fact that its overtime budget ran to $728.6 million.