ST GEORGE‘S, Grenada: In general, the quality of the Grenadian government accounting records is extremely poor and the financial information they provide is unreliable says Director of Audit Anselm Joseph. He noted that balances from the previous year were brought forward on expenditure categories; there were credit totals for the year on expenditure categories and sub-categories; numerous transactions were classified incorrectly; many journal adjustments were incorrect; a few accounts were duplicated; account descriptions are vague and do not adequately describe the account; and proper reconciliations of bank statement balances and bank balances as per cash records were not done. The closing balance for 2001 in the accounts for cash in hand he says was incorrect. This was brought forward to 2002 without the proper adjustments being made. Additionally, there were a number of incorrect accounting entries in 2002, to the extent that the Treasury cashier’s balance, at the beginning of December 2002, had a credit of over three million dollars. Included in the asset is an amount of $1,585,172.57 which is described as “Advance Call Centre Inc.” The statutory authority for the issuance of advances from the Consolidated Fund is Section 5(3) of the Finance and Audit Act Cap. 102 of the Revised Laws of Grenada 1990. The issue of this advance to Call Centres Inc. did not meet all the relevant conditions set out in this section of the act. Joseph noted the statutory limit for advances, not including advances on behalf of and recoverable from other Governments; and advances for the purpose of expenditure authorized by a loan act, in anticipation of the raising of a loan is one million. The audit report indicated "Advances shown on the Statement of Assets and Liabilities exceeds this limit by over 13.5 million dollars. However, it should be noted that I am unable to verify the accuracy of the amount shown due to the poor record keeping." The report added "I have not been able to verify the accuracy or existence of the account described as Bail Deposit in the amount of $39,058.82 due to the poor and inadequate record keeping. However, it is very unusual for an account described as Bail Deposit to be disclosed as an advance." “Payments” the report continued totaling $6,688,410.33 to Cable & Wireless Grenada on behalf of Grenada Call Centres Inc. in 2002, was not incorporated in the accounts. In addition, I have not seen the authority for this payment. Also, I have not seen any agreement between the Government of Grenada and Grenada Call Centres Incorporated re these “payments.” According to Joseph, "I have seen a letter from Cable & Wireless which was addressed to the Accountant general, advising her that bills totaling $254,040.00 were offset against a discretionary credit issued by Cable & Wireless. However, I have not traced where this transaction is incorporated in the accounts. “Cabinet, through Conclusion #168 dated 4 February 2003, directed that the cost of airfares for official travel on LIAT be submitted to the Ministry of Finance to be offset against Ticket Tax owed by LIAT. I have not traced any expenditure incurred as a result of this directive, in the accounts for 2002. Proper procedures must be applied to ensure that all expenditure is accounted for. “Dividends totaling $7,835,287.05 was paid by Cable & Wireless to the Government of Grenada in December 2002. $1,146,876.72 was paid by cheque and the remainder, $6,688,410.33 was set off (apparently with the Ministry of Finance approval) against monies owed to Cable & Wireless by Grenada Call Centres Inc. It should be noted that only $1,146,876.72 was recorded in the accounts. As a result of this omission, revenue was understated by over 6.6 million dollars on this single transaction". The Grenada Constitution Order 1973 requires all revenue or other moneys raised or received by Grenada (not being revenues or other moneys that are payable, by or under any law for the time being in force in Grenada, into some other fund established for any specific purpose) shall be paid into and form a Consolidated Fund. Reprinted from Caribbean Net News caribbeannetnews.com