Seven entities appear before the FPAC in its first series of public hearings |04 May 2021
Altogether seven public entities appeared before the Finance and Public Accounts Committee (FPAC) of the National Assembly in its first series of public hearings that began yesterday morning.
The hearings are based on the audit findings of the Report of the Auditor General for the year of 2019. Other hearings during the second term will include the Auditor General’s preliminary findings on the payment under FA4JR and the Special Audit Report on Land Deals & Transaction between the Government and the United Seychelles Political Party.
Also present at the hearings yesterday was the auditor general himself Gamini Herath.
The aim of the committee, which is chaired by the leader of the opposition Sebastien Pillay, is to monitor the accounts and expenses of government. The FPAC also has the power under the National Assembly Standing Orders 2020 to look into the management of public funds by government and it also works closely with the office of the auditor general where it can call for special audits to be carried out on pertinent matters raised through the National Assembly.
FPAC is seen as one of the key mechanisms to ensure good governance, transparency and accountability in the way public funds are managed across ministries, departments and agencies.
Other members of the FPAC are the vice-chairperson, Hon. Terence Mondon, Hon. Churchill Gill, Hon. Richard Labrosse, Hon. Georges Romain, Hon. Conrad Gabriel and Hon. Sandy Arissol.
Seychelles Heritage Foundation (SHF)
The first public entity on whose report the auditor general raised questions to appear before the FPAC yesterday morning was the Seychelles Heritage Foundation (SHF) represented by its chief executive Benjamine Rose and accountant Michaella Henderson.
Among the questions that were raised include the absence of a cash book to record revenue collected in 2018.
Ms Rose said there was the understanding that there was an electronic back up in the possession of the then accountant but when the person left there was no proper handover to the new accountant and the backup hard drive was nowhere to be found in the system even though Ms Rose herself affirmed she knew that there was one. She went on to state that numerous attempts to reach the former accountant who now works in the private sector to come and clear the situation was in vain.
“But at the end of the day our financial statement did not show that there was any traces of fraud. But we have put in place a proper cashbook which is currently being maintained by the present accountant,” Ms Rose said.
The issue of overdue debts was another point raised. It was pointed out that in 2017 there was no policy in place for collecting debts until 2018 when this was put in place and it allowed for the entity to take legal actions against those people not respecting their financial obligations.
Ms Rose affirmed that to date, under the policy, there are four cases in which legal action is being processed as all other repayment options have been exhausted without any positive outcomes.
“There are also tenants who have been evicted for non-payment of rents and in these cases legal action is being pursued to ensure all their outstanding debts are cleared,” Ms Rose stated, noting that the rents amounted to R113,000 and date back to 2012.
Ms Rose went on to add that the largest part of the debt concerned properties being leased.
“In the past SHF did not honour its arrangements with the lease holders and when I took over I did the necessary to clear up all the misunderstandings,” Ms Rose explained.
The auditor general’s report also picked up the fact that the SHF asked that half a million rupees in debt be written off. Ms Rose explained that it was for this reason that the SHF called on the Ministry of Finance to consider writing off the debt as both parties were at fault. She said the response from Finance has been positive and this will reduce the SHF’s debt considerably while allowing the entity to reorganise itself moving forward.
Ms Rose further pointed out that in spite of the current difficult economic situation defaulters are honouring their obligations and at present a lot of improvement has been made compared to since the auditor general report has been published.
Meanwhile the FPAC has requested for a list of all SHF debtors, lease holders, any properties transferred for development among other related matters.
Department of Police
The department was represented by acting commissioner Ted Barbe, Deputy Romano Songor, Angele Lebon (DG for Administration), Danny Labonte (financial controller).
Questions relating to long delays in banking collected revenues – 43 from 54 banking transactions – were not done on time, problems relating to revenue and debt collection from 2015 and 2016, no proper/clear price list as prices being charged on invoices could not be traced to a proper price list, from a budget of R153 million the auditor’s report picked a sample of 253 payments under goods and services relating to car rental operators. A payment of over R12.7 million for 13 operators from which only one operator has been paid over R6.7 million and approval for this particular operator was granted since 2015 but it was without going through proper procurement process. Furthermore the said approval was not made available to the auditor general.
With regard to the long delays in revenue collection, financial controller Labonte explained that the department of Police has worked hard to address these shortcomings and has at present managed to move away from the practice which was causing the delay. He said an additional staff member has been recruited and the department had now achieved 80% of its target in debt recovery and the department is also working closely with its clients to ensure timely payments.
Mr Labonte said at present the department’s total debt is R1 million as at April 30, 2021 from which around R700,000 are government debts while the remaining sum privately owned debts. As for the price list Mr Labonte said a proposal has been lodged with the Ministry of Finance and a memo has been submitted to the Cabinet to amend and standardise the invoicing system which is not consistent with the government pricing system. He said they are still waiting for an outcome.
In relation to the car hire operators Ms Lebon explained that it was in 2015 that the police launched an open tender for car hirer operators to provide transport for the police to boost its fleet to use in the community.
Ms Lebon explained that contract was awarded to the lowest bidder and the particular car hire operator and the documents are still there and it is wrong to say that there was no proper procurement process. She went on to detail all the other related information relating to the contract.
Mr Herath for his part asked if Ms Lebon herself has seen the approval in the contract documents. Ms Lebon insisted that it has been a long time since she looked through the file and she will go through it again to find the document in question to submit to the FPAC.
Furthermore she went on to add that in 2016 the police received a fleet of vehicles through an Indian grant worth R5.8 million to boost its operations and service to the community but she insisted that for the police to function efficiently the force needs around 100 vehicles to serve its different units and stations on Praslin and La Digue.
She went on to explain and give details on the department’s vehicle use, gave the number and types of vehicle in its fleet before stating that at present the Police department has in its fleet only two rented vehicles. Other questions were related to private debts owed to the police, police vehicles involved in speeding and accidents, vehicle use by certain officers, the number of vehicles no longer in service, right off among many others.
For his part Mr Pillay said the FPAC is aware that a special audit was carried out to highlight how the police use rented vehicles which the committee will continue to follow to ensure that if there was any misuse and abuse and any wrongful/excess payments going to any particular hirer will be uncovered and the money refunded.
He has requested that the FPAC gets copies of all the related documents in question.
Seychelles Energy Commission
Seychelles Energy Commission’s chief executive Tony Imaduwa, accompanied by Christine Auguste responsible for human resource and budget management, answered questions related to lack of supporting documents for different payments, no approval from higher authority for refund for consultancies, training fees, overseas subsistence allowances, and the use of fuel coupons by two vehicles under the commission which were not being properly recorded,
Mr Imaduwa explained that the audit report shows that a sum of a little over R118,000 was paid for consultancies and overseas subsistence allowances and he went on to give committee members details of how the transactions were being endorsed and he noted that since the notification of wrong practice from audit he has stopped and all authorisations since last year were being given through the chairperson but as the commission presently does not have a chairperson he is waiting for instructions as to how he would go about.
With regard to fuel coupons, he admitted that these were not being recorded as they were not informed and was not aware that these details were necessary but they have since 2020 adjusted and are now adhering to the required practice.
Other questions were related to petty cash, over spending on budget for office expenses from the allocated R15,000 to reach R41,000, transport allowances among others.
Mr Pillay has called for Mr Imaduwa’s commitment to ensure that the commission at all times complies with all existing policies for more efficient and effective running of the organisation and to ask for additional assistance and support where necessary.
Seychelles Tourism Board (STB)
The STB was represented by its CEO Sherin Francis and other key officials namely Jenifer Sinon and Don Julie as accountants.
Questions raised were related to direct bidding without approval, payment threshold which were not properly adhered to, payment without reconciliation invoices…
Mrs Francis went on to explain the complex technicalities of these procurement issues in relation to numerous projects. Other questions concerned outstanding debts and timely payments for services relating to publicity and marketing, debt recovery, late receipt of invoices, management of consumables, high internet cost among many others. FPAC requested a list of all STB’s outstanding liabilities.
National Sports Council
CEO Jean Larue and two senior accounting officers Lisette Nolin and Christine Hoareau answered members’ questions related to excess leave and overtime claims and payments, absence of a formal contract for a regular service.
Mr Larue explained the situation relating to the excess leave and overtime and the measures taken to deal with the situation. In relation to the contract Mr Larue went on to explain the circumstances surrounding the contract which has now been regularised.
Mr Larue said when he took over as CEO he inherited a lot of malpractices which are the result of many of the problems the council is presently facing. He said the NSC is spending a lot of time to restructure and reorganise its operations and functions and put in place oversight mechanisms to meet and comply with the auditor general’s recommendations for more effectiveness.
Other questions were related to lack of complete payment supporting documents for a sum of R60,000 to a basketball team for a training camp which to date the document remains unaccounted for, a sum of R120,000 paid in cash to Qatar Airways of which to date the related documents are untraceable.
Mr Larue said such ways of doing things have unfortunately long been going on. He said the NSC has its procedure manual but this has not been followed.
To ensure these bad practices are addressed Mr Larue reiterated that the NSC has set up a compliance section, strengthened the accounts section among other measures. Mr Larue also answered questions related to the SNC’s assets, human resource capacity among many others.
Seychelles National Youth Council (SNYC)
The council was represented by its CEO Penny Belmont and Ghislaine Belmont its deputy CEO. Ms Belmont answered questions that came up in the auditor general’s report relating to namely procurement, non approval for an overseas mission for a former CEO who nevertheless proceeded on the mission and was even accorded a refund on return, among different questions.
Ms Belmont affirmed than when she took over in 2019, she set up an in-house procurement policy to put some order in the way things were being done. She said the aim is to correct all malpractices so that they do not reappear in future auditor’s reports. With regard to the overseas mission she said everything was in order based on emails copies but approval from the President’s Office was not found.
Asked if she had the power to conduct a follow-up on the matter Ms Belmont stated that the answers which she received stated that he received directives to go ahead by making his own payments which would later be refunded by the SNYC which is still being questioned.
Questions were also raised in relation to other overseas missions to Mauritius by the former CEO with a group of 17 youth which also did not receive approval. A sum of R58,000 was transferred to his personal account for use among the group of young people. There again there are no supporting documents, receipts and no proof that the group received the money even though they confirmed that they received the money albeit they did not sign for it. Ms Belmont affirmed that with regard to stipends each individual receives the money and sign for it personally. She added that SNYC cleared all the payments adding that each person has their own way of doing things. Ms Belmont also answered numerous other questions relating to the council . Meanwhile the FPAC has called for records of all the payments and will be in touch with the former CEO in relation to matters raised in the auditor’s report.
Lenstiti Kreol Enternasyonal
CEO Flora Ben David, Ghiliana Anacoura, senior research officer for literature and tradition and Huguette Adeline, assistant admin officer, were present to answer questions raised which were related to such matters like receipts cancellation that were not recorded in the cash book, non adherence to procurement regulations, questions related to the institute’s functions and operations, lack of resources and capacity building of its workforce, non financial assets of the institute, late banking where between November 2016 until December 2017 banking was carried out only once for a sum of R31,000 and for 2018 for seven months money collected remained at the institute before being banked. Reasons given were that the accountant was too busy to do banking. There were many other questions. The team from the institute after explaining their different challenges confirmed that the situation is gradually being addressed and is gradually improving.
Ms Ben David took the opportunity to highlight all of the different challenges the institute is facing to carry out its operations and functions.
The FPAC will continue its public hearing sessions today.
The accompanying photos show the meetings with some of the entities.