Imbert: No law broken over Auditor General's report

Finance Minister Colm Imbert has challenged the opposition to find grounds for its lawsuit against him for not laying the completed Auditor General's report in Parliament on Friday.

Speaking in the Senate on Monday, Imbert said he had not broken any law.

"The Exchequer and Audit Act, section 25, something that many commentators have avoided, states categorically that the Minister of Finance is required to lay the auditor general's report within 30 days of receipt.

"The Auditor General's report was received by the Minister of Finance on or around the 24th of April and therefore by my calculations 30 days from that day is the 23rd of May. We are still in April.

"So I will challenge those opposite to show under which law the Minister of Finance is statutorily required to lay this report today."

He later added that he would be laying the current Auditor General report in the Parliament and Senate.

Apart from the Finance Minister, the Auditor General is required to submit the report to the Senate President and the House Speaker.

While Imbert quoted from the Exchequer and Audit Act, Opposition Senator Wade Mark referred to section 116 subsection five of the Constitution which, he said, overrides the provisions in the act.

"The constitution, under section two, is the supreme law of the land and any law that is inconsistent with the constitution is void," Mark argued.

The section says: "The President of the Senate and the Speaker shall cause the report to be laid before the Senate and the House of Representatives, respectively, at the next sitting of the Senate and the House of Representatives after the receipt thereof, respectively."

Speaking at the UNC's 35th-anniversary celebrations in Chaguanas on Sunday, Opposition Leader Kamla Persad-Bissessar said the party intended to take Imbert to court for failing to lay the report in Parliament.

She said while the completed report was on the table in the Parliament, the Finance Minister did not lay them when prompted by the Speaker at the start of the sitting but waited until the end of the private members' sitting to move a motion to extend the timeframe.

"So first, they violated our Constitution by refusing to lay the document which is prepared. It has also violated the Constitution by extending the time," she said.

"I serve notice today, Mr Imbert and the Government of TT we will take you to the courthouse to get that report laid in the Parliament."

Introducing the motion for debate in the Senate on Monday, Imbert said the government was hoping to extend the deadline for its submissions to the Auditor General to May 31 to allow for the new data and all supporting documents to be handed over.

Similarly, he said the government was also seeking to extend the time for the Auditor General to complete her report to August 31 to allow her the same time frame to analyse the updated accounts and include it in her report.

"If we had been foolish enough to say we are extending the time for the treasury to submit the accounts to the auditor general to the end of May, by four months, and we're only extending the time for the auditor general to look at the amended accounts by one month, allegations of unfairness and victimisation and so on would have ensued.

"So we are giving the auditor general the same amount of time. It's a maximum time. The Auditor General could take a week, could take a month, could take two months, could take three months, could take four months. The Auditor General is not compelled to use the entire time of the extension."

The motion was later passed in the Senate.

Imbert: New tax-refund system caused error

Imbert told the Senate an error in the Ministry of Finance's initial submission of data to the Auditor General in January would have caused Government's 2023 revenue to be underrepresented by $2.6 billion.

He said the error occurred while processing tax refund cheques with a new electronic system that replaced the manual system.

"When revenue is reported, and we're talking tax revenue – individual tax, income tax, corporation tax, value added tax etc – when it is reported in the national accounts, it's a net figure because there would be a gross figure of VAT collected, but you have to subtract from that gross figure tax refunds to get the net figure. So when revenue is reported in the Auditor General's report, it is the net figure that is reported."

Imbert said the manual system of doing this required commercial banks to return the physical cheques that were cashed to the Central Bank. The cheques are then reviewed and batched by type before sending them to the Board of Inland Revenue (BIR).

He said, at the BIR, staff reconciled the cheques and produced a net figure for tax revenue.

He said the system was converted to an electronic one in 2023 which forwent a physical return of cheques to the Central Bank and BIR for a digital return.

"That is where the problem began."

He said the digital cheques were submitted by commercial banks unbatched, complicating the reconciliation process.

"They sent the files in a bundle. So corporation tax mixed up with individual income tax, mixed up with VAT and so on, and it proved to be very difficult for the officials at the BIR to properly reconcile tax refunds."

Additionally, he said the software that ran the digital system was malfunctioning, even locking staff out at times.

"The end result of all of this is that on one day, the Central Bank posted a VAT refund amount in the amount of $2.6 billion. Clearly, a mistake because there's no way you're going to have VAT refund cheques of that magnitude...received by the Central Bank and processed in one day. It is impossible.

"It was assumed there was an error in the decimal point.

"So when the information was sent from the Central Bank to the BIR, there was this huge VAT refund of $2.6 billion and it was actually double counted."

He said the BIR submitted the error to the Treasury and it was included in the accounts.

He said the error was detected during an examination of the accounts submitted to the Auditor General, as per protocol, by the Finance Ministry's budget division in February.

He said that was when the process began to approach the Auditor General who refused to accept the updated accounts.

"The reports I have from my permanent secretary is the Auditor General would not take her calls, would not meet with her, would not receive anything. That's what I was told."

Imbert hoped an independent investigation launched into the matter would help provide clarity on the conflicting information emanating from the Ministry of Finance and the Auditor General's office.