Auditor General Leigh Trotman has chastised the Barbados Revenue Authority (BRA) for failing to do spot checks at its cash collection points across the island, as required by law, and identified discrepancies amounting to millions of dollars for which no explanations have yet been given.
In his latest report covering the year ended March 31, 2021, Trotman called for investigations and swift action to address the inconsistencies.
The Government’s auditor, whose position is legally protected from political interference, raised specific questions about a more than $6 million difference between what the cashier’s report at one BRA collection point stated and what the Central Bank indicated was collected.
According to that September 22, 2020 cashier report for the Treasury Office in Bridge Street Mall, Bridgetown, cheques totalling $10.19 million were collected. However, there was a massive $6.62 million difference between that report and what the Central Bank listed as the amount received.
Trotman said the agency’s reported cheque amount “did not agree to the Central Bank listing which recorded $3,536,006.77, resulting in a difference of $6,662,541.31”.
He, therefore, called for swift action, adding: “No explanation was presented for this significant difference which should be investigated as a matter of urgency.”
Addressing the specific issue of surprise cash inspections, the Office of the Auditor General said it was not provided with any evidence to suggest that cash points were inspected during the review period.
He said he was less than pleased with this state of affairs at a revenue collecting agency that raked in more than $1.5 billion on behalf of the country.
“No documentation was presented to verify that cash inspections were carried out for the financial year ended 31 March 2021 as required by Financial Rule 116. With revenue collections of over $1.5 billion, the Authority should ensure that this control procedure is carried out, thereby ensuring that the funds collected on behalf of the Government are safeguarded and accurately recorded,” Trotman said.
In response, the BRA blamed the situation on “restricted movement across locations as a result of COVID-19” which it said, “impacted this process”.
The Auditor General also lashed the agency for its failure to submit financial statements on time.
He said the Public Finance Management Act 2019-1 Section 88 mandated that financial statements be submitted by collectors of revenue, such as the BRA, to the Auditor General and the Accountant General within two months after the close of each financial year.
He said the BRA had not complied with the requirement to also include information on receipts, revenue, refunds, waivers, remittances and receivables.
Trotman said the financial statement was submitted some seven months after the specified period, and his office had not yet received statements on the waivers that BRA granted, or remittances for the period.
He went further to describe what his office regarded as “major discrepancies, errors, and omissions related to receivables”. These included contradicting Value Added tax (VAT) receivable balances, with an $84.86 million difference between what was stated as VAT receivable and the receivables schedule.
“As a result, the VAT receivable could not be verified,” Trotman stated in his Auditor General’s Report which was submitted to Parliament on July 1, 2022.
In response, the BRA wrote: “This matter will be investigated.” (IMC1)