(CNS): Exactly how much money government gives away in duty waivers is impossible to establish, the acting auditor general found in the latest report on the management of public cash, which reveals yet more weaknesses in the system. In his first report as the independent public auditor, Garnet Harrison said that he was “dismayed” by the poor record keeping relating to waivers that have been granted and that his office could not complete its work as there was no way to ascertain how much cash has been given away.
The report, “Collecting Government Revenues”, raises a number of issues and inefficiencies regarding the collection of taxes and fees due to government. But one of the main concerns identified was the complete lack of records around giveaways.
Harrison said he was particularly concerned about the lack of an effective management framework for the processing of revenue waivers.
“The lack of systems and documentation we found during the audit should be of great concern to legislators, who would expect that decisions made are based on clearly documented criteria applied in a fair and consistent manner,” the report states.
As a result of poor procedures, poor controls and poor record keeping, the auditors were unable to work out how much revenue government did not collect over at least the last five years. There has been no transparency or accountability for the decisions, the audit team found, even though the information is required for government to prepare its financial statements.
“Government officials have not been acting in accordance with the Public Management and Finance Law,” said the acting auditor general. “I am dismayed at the lack of proper record keeping for this important role in the Ministry of Finance. No one knows how much revenue has been lost to the public purse or whether government officials and politicians have acted improperly by forgiving certain revenues. No one will ever know.”
Although the report indicates that overall government is generally collecting revenue as it is supposed to in line with the law, there are several inefficiencies and the audit makes seven recommendations that government has generally agreed to implement.
Among the problems identified, it appears the lack of information and justification for waivers is the most serious as waivers do not appear to have been treated fairly, consistently or transparently.
“We did not find a defined or documented process, including the roles, responsibilities and accountabilities, for assessing the applications prior to approval,” Harrison said in the report. Because of the poor records the auditors could not quantify the value of revenue waivers or establish whether revenue waivers that were granted had been approved appropriately.
He said government should formalise policies and procedures to provide documented and consistent roles, responsibilities and accountabilities for all parts of the revenue waiver process, including a set of decision criteria on which to assess revenue waiver applications and a formalised records management process, which in its management response the government acknowledged and agreed.