Port-of-Spain City Hall.

Lead Editor, Investigative Desk

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Four new investment First Citizens bank accounts were opened by the Port-of-Spain City Corporation more than fifteen years ago in which millions of dollars of unspent balances were transferred into these accounts.

These accounts according to the Ministry of Finance Central Audit draft report in May 2019 had never gotten the proper ministerial approval from the Rural Development and Local Government ministry nor were there any approvals granted by the corporation’s Finance Planning and Allocation Resources Committee (FPARC) or any authority letters to sanction these new bank accounts.

The report found that nothing to date had been done to correct this situation which they believed could potentially lead to ambiguity of banking transactions.

According to the report up to 2018, the main business chequing account was being utilised as the corporation’s operational bank account “whereby all deposits, receipts, and payments were made.”

The audit uncovered, “No bank reconciliations were performed for this account which raised a red flag on the adequacy of monitoring controls, accuracy, and completeness of transactions being processed for this account.”

Further concerns were raised as to what was being done with First Citizens Abercrombie Fund accounts dating back to 2005 in which an account #1429574 was opened using unutilised surpluses from another bank account totalling five million dollars under the direction of the former city treasurer and then acting CEO.

Again the report highlighted, “There were no approvals from the FPARC to justify such and no ministerial approval was seen to validate the transfer of unutilised surpluses as stated under the Municipal Corporation Act.”

An additional seven million dollars had also been placed into the said account #1429574, also without necessary approvals.

Concerns were also raised about a First Citizens fixed deposit account in which some $1.5m was placed in it after the corporation received a two million dollar cheque and the FPARC had recommended it be placed in a city improvement fund subject to ministerial approval.

A senior insider at the corporation alleged that the proper protocols were not observed by the present CEO Annette Stapleton-Seaforth and city treasurer in regards to financial matters inclusive of the bank accounts, and said they allegedly attempted to do things without seeking the necessary council and ministerial approval in this instance.

During our month-long investigation, GML questioned Port-of-Spain Mayor Joel Martinez about these bank accounts and financial matters at the corporation and the alleged behaviour of the CEO.

“I don’t know if I want to comment on that here as such. I have to familiar(sic) myself with the report. Some of it I would like to answer you fully on it. I would have to check with the CEO, to see what you asking me is correct.”

Pressed further he added, “We may have spoken about it, I do not know if it was a full caution, but I knew it came up at some stage in one of our meetings,” explained Mayor Martinez.

Guardian Media obtained a copy of the minutes of the meeting for September 25, 2019 in which then chairman of the FPARC, Akil Durham asked that the present CEO and city treasurer follow proper financial guidelines through the council. The member said, “Again, CEO, I am begging, please, your and your team abide by the financial

provisions and let us do what is right when no one is looking.”

CEO of the Port-of-Spain City Corporation, Stapleton-Seaforth did respond in a lengthy document to the Central audit report which GML obtained. In reference to the above matter about financial guidelines, she would only state the obvious, which was emphasising how important it was to seek council and ministerial approval before going forward with crucial financial matters.

The Rural Development and Local Government was sent questions about the bank accounts and they responded indicating that they had been aware of these bank accounts into which unutilised balances were transferred.

The ministry indicated that these accounts had been established some time ago.

But the ministry said, “they were now engaged with discussions with the corporation and Ministry of Finance with a view to ensuring compliance with the recommendations of the Central Audit to close or regularise these accounts and re-allocate the funds.”

The ministry added that they had never been informed that the CEO was cautioned by the Head of the FPARC as it relates to any financial matters (including the use of the bank accounts).

Another contentious issued the report brought to light dealt with the corporation giving car loans to employees who held travelling posts between 2015-2018. Employees accessed a staggering $3.2m in car loans over this three-year period.

Central Audit said they did not obtain council or ministerial approval as required under the Municipal Act.

The report stated, “Further these types of loans were not aligned to the unspent balances criteria set out in Section 112 of the Municipal Act and the act did not make provisions for motor vehicle loans to employees of corporations.”

Central Audit of the Ministry of Finance said the corporation maintained poor records related to the motor vehicle loans and a list of travel posts of employees was not available for audit examination.

They noted, “The employees advance ledger cards were not properly detailed with balances owing, vehicle details and loan details.”

The report recommended that applications for the purchase/repair/insurance loans be forwarded to the Ministry of Rural Development and Local Government for onward submissions to the Comptroller of Accounts for processing in accordance with section 49 of the Travelling Allowance Act.

The Rural Development and Local Government in response to the question of car loans being granted to employees said they had been aware for some time that car loans were being granted without council and ministerial approval in at least four statutory corporations. The ministry said it had since enacted firm controls on the granting of loans to employees of corporations. “The Corporation has not through the Ministry of Rural Development and Local Government sought and obtained approval from the Ministry of Finance for the grant of these loans to officers of the municipal corporations who have ‘scheduled travelling positions.’ These loans are to be disbursed in accordance with the Travelling Allowance Act.”

Tonight: Part 3 on CNC3 News- Questions are raised about the use of millions of dollars from government-generated revenue in the Port of Spain City Corporation. And part 3 also in your Guardian tomorrow.