Through the dark fog that is the THA's finances

NOW that this year’s THA election is over, I’d like to go back to one of the major issues of the campaign: the accounting practices of the THA. I’ve written about these many times before, always in a fog of unhappiness. That fog has thickened.

Two recent documents are relevant: (i) a management letter of November 12, 2020 from a member of the staff of the Auditor General to the THA Chief Administrator on the audit of the THA’s Financial Statement for the year ended September 30, 2016, and; (ii) a final report of December 10, 2020 from the Auditor General to Parliament and the Minister of Finance.

The management letter is in fact a detailed analysis of the THA’s accounting and financial procedures and processes. It cautions that this examination “would not necessarily disclose all the weaknesses which may exist.”

All the same, a plethora of weaknesses was found. The letter’s dispassionate language cannot conceal a searing criticism of the THA’s accounting and financial mismanagement in the period under review, and more generally, of its cavalier treatment of taxpayers’ money. Here are some examples.

Salary and per diem overpayments but no evidence of refund. No valid agreements for properties rented by the THA. Missing or unsigned contracts (but money being paid out). No evidence of how an unspent balance of nearly $101 million was computed.

The Contingencies Fund (which exists specifically to meet “urgent or unforeseen expenditure”) was utilised to fund the URP and, as noted in the Auditor General’s December report, to construct a mall. A mall! No policy “to indicate the period for which a purchase order should be valid.” And so on. But it was what the letter said about tourism that caused the fog to engulf me more rapidly.

Over the years we have been told ad nauseam that tourism is the economic lifeblood of Tobago. It would therefore be logical to expect that clear, forward-looking policies and plans are in place for the sector, and being constantly revised and updated to meet changing conditions.

But then I read this: “The Cabinet Minute which showed that approval was granted for expenditure to be incurred under the Rolling Three Year Tourism Plan was not presented for audit.”

What Plan is this? I recall such a Plan for the period 2002/5, but that was nearly 20 years ago, and it applied to Trinidad and Tobago, not Tobago only. Is it still rolling along, like Ol’ Man River? Or is there now a separate Tobago Plan?

So, no Cabinet decision available for inspection – where did it go? – and then we read further: “A policy which guides the operation of the…Plan was not produced.” Which prompts me to ask: is there a policy at all? And there is more unsettling stuff.

We are told that the THA made payments to foreign airlines but that no evidence was provided to indicate that “systems were implemented to monitor the adherence of (the) airlines to established service agreements.”

We are told that the THA entered into a three-year contract “with a foreign airline” for services to be provided between London (Gatwick) and Tobago “at an annual cost of 1.9 million pounds sterling.” But, among other things, there was – again – no evidence of THA monitoring.

There wasn’t even “a cross section of the Tobago hotel product in the company’s brochure.” And bank account numbers to which funds were to be paid were “not included in the service agreements.”

We are told that a joint marketing plan between the THA and (another?) foreign airline for direct air services between Manchester (UK) and Tobago costing 250,000 pounds sterling was not presented for audit and, amazingly, the relevant service agreement gave the airline “the right to terminate the contract should the operation not be profitable.” What unilateral rights did the THA have, I wonder?

And to yet another foreign airline the THA paid almost $12 million – but no contract was made available for audit.

The zipline issue received much attention on the hustings recently, and I shall come back to it. Meanwhile, let’s not forget the $32 million spent in the previous financial year (2014/5) to acquire two hotels, neither of which have since been used, and which are now both “in a serious state of disrepair.”

The Auditor General wrote her report of December 10 on the basis of the above information and, I assume, of the reply from the THA Chief Administrator to the letter of November 12. What does her report say? What indeed have Auditors General, throughout the years, been saying about THA's accounts?

I shall look at that next.