Stevian Simmonds

An Auditor General’s report into the Constituency Development Fund, CDF, has raised serious concerns over proper governance and fraud.

Tabled in the House of Representatives last evening the Auditor General’s report says funds from the CDF were on at least two occasions used to either benefit a relative of a Member of Parliament or an individual directly involved in the fund’s implementation.

The Auditor General’s report also revealed a lack of effective fraud prevention and risk management systems.

The Auditor General’s report into the CDF identified two instances of payments on behalf of connected parties.

In the first case, payments totalling $190,000 in fiscal years 2016/2017 and 2017/2018, was made to a University on behalf of an employee of the Ministry of Economic Growth and Job Creation, who was actively involved in the implementation of CDF projects.

The payments according to the Auditor General were used to offset the cost of a post-graduate degree.

The second case involved payments totalling just under $671,0000 in financial years 2016/2017 and 2017/2018, to another tertiary institution from the CDF of a Member of Parliament on behalf of the MP’s relative to offset the cost of a bachelor’s degree.

The report says this showed the absence of established objective criteria and documented guidelines to manage the implementation of Educational Development Projects.

This it says increased the risk that these projects were not administered in an equitable and transparent manner and may facilitate the exploitation and misuse of funds allocated for these projects.

The report also revealed that funds disbursed relating to 46 constituencies over the period 2015/2016 to 2019/2020 exceeded their approved budget by approximately $85 million.

The Auditor General says the CDF Project Management Unit did not have an effective risk management system or fraud prevention plan to prevent, detect and respond effectively to fraud risks as required by the Financial Management Regulations.

Furthermore, the CDFPMU’s Strategic Plans did not include the assessment of potential risks and the OPM’s Internal Audit Unit did not conduct frequent reviews of the CDF’s operations to identify areas for improving risk management.

It says consequently, the CDFPMU was more vulnerable to the occurrence and impact of potential risks including fraud risks.

However, The Auditor General says OPM which has responsibility for the fund has since taken steps to strengthen its risk management system by implementing a risk register and has included risk management in its 2020/2021 operational plan.

The report is recommending that given CDF projects are implemented by several separate autonomous implementing agencies, the CDFPMU should ensure that there is an effective risk management system in place.

It says the CDFPMU should strengthen its monitoring function to ensure that all CDF projects and activities are effectively implemented, and their objectives and targets are achieved within the planned time and budget.

It’s also recommending that steps be taken to establish objective criteria and clear guidelines for the implementation of Educational Development Projects to ensure that these projects are administered in a fair and transparent manner.