GOVERNMENT'S EXPENDITURE for 1999/2000 was understated, says Auditor-General Adrian Strachan.In a section of his 1999/2000 report dealing with the Accountant-General's Department, tabled in Parliament on Tuesday, Mr. Strachan said that several practices breaching section 114 of the Constitution and section 3 of the Financial Administration and Audit during the year had led to this situation.
According to the Auditor General's report:
"The (Accountant General's) Department is required to pay interest and repay principal for local and external loans executed by the Government of Jamaica. An examination conducted on interest payments and principal repayments included verification of lodgements of the related loan proceeds to the Consolidated Fund.
"Section 114 of the Constitution of Jamaica and section 3 of the Financial Administration and Audit Act requires that all loan receipts be paid in full into the Consolidated Fund. Departures from this requirement were however observed.
"Loan receipts are held in an interim account at the Bank of Jamaica and later transferred to the Consolidated Fund bank account, not in full, but in a fragmented manner. Unpaid balances in the interim account were not reflected in the revenue account of the Accountant-General for the financial year in which the loans were raised, resulting in revenues being understated. Similarly expenses relating to loans raised were paid from the interim account at the Bank of Jamaica and was not reflected as expenditure in the accounts of the Accountant General.
"Government's expenditure was therefore understated by such amounts. It was recommended that the Bank of Jamaica be required to lodge all loan receipts promptly and intact to the Consolidated Fund and that appropriate records be maintained by the Accountant-General to adequately record and monitor each loan issue to ensure that the related receipts are lodged to the Consolidated Fund as required by law."
He said that the Accountant-General has undertaken to pursue corrective action.
