Banks reject cheques as THA closes bank accounts

Returned cheques issued by the THA were the result of a transitional issue, says THA chief technical adviser in the Division of Finance, Trade and the Economy Anslem Richards.

A report on Tuesday indicated that several contractors and service providers on the island had been issued bounced cheques. The report said these providers were going to the banks to change the cheques, but were being turned away.

On Wednesday, during the Tobago Updates morning show, Richards said the cheques did not bounce, but rather were returned, as several of the THA’s bank accounts are currently being closed.

The cheques that were being returned, he said were drawn on the accounts that were being closed.

"In this fiscal (year), funds are not going into those accounts, they are going only into the four main accounts. So that is where the reconciliation issue is occurring, and we have a transitional issue with these cheques that are issued on the old accounts.

"So we are not putting fresh cash in these accounts because the decision is to close them down because they cannot fit into the framework of the IFMIS, which is the integrated financial management system that the government of TT – public accounts have to operate in short order.”

He said the THA is not in financial difficulties.

“It is a transitional issue where we are moving into this cash-management framework, new financial management system, and in order for that to happen, we have to close off these proliferations of accounts we have.”His explanation was echoed by THA’s chief management accountant in the Office of the Chief Secretary, Petal-Ann Roberts. Apologising for the inconvenience, Roberts said the situation was unexpected.

“This issue is not something that was planned – when you hear 'bounced cheques,' you think that you issued cheques from an account that has no money – it’s something that is fraudulent. But that is not the case.”

She said the THA had made some changes over the years and 2003, it established bank accounts for each division, when it was decentralised, as it previously had one account, under the Division of Finance.

“At the time the division thought it best to decentralise and give divisions autonomy to manage their own finances.

" In 2014, the government decided to digitise and modernise the public financial management system of the assembly. and the THA fell, as part of the pilot project for that project, under the national project.

"While we were undergoing all the change management and the developers came to Tobago and they saw the THA framework for bank accounts, they said this system requires fewer bank accounts.

"The THA had, in the last fiscal, 70 bank accounts.”

With the software the THA will soon be adopting, the bank accounts had to change. She said this was a direct cause of what happened with the cheques.

“For fiscal 2023, which started in October, we changed the way in which we do business and manage the assembly’s operations in a more efficient manner. So the Division of Finance has a strengthened unadvanced treasury function for the THA. So all these accounts were consolidated into four main accounts.”

She said the cheques that "bounced" had nothing to do with this fiscal year, but were issued before September. Only cheques drawn on three bank accounts were involved so far, and the THA was dealing with the matter.

“It is not that we are...sloppy or malicious, it has nothing to do with a malicious administration, or that we are just doing things anyhow: it is because we changed our cash management system.”

The issue of bounced cheques, she said is not new.

“Bank accounts have rolling balances; whatever happened in previous year would affect current year. When we did the investigation, some of these bank accounts had a few anomalies that caused this problem. However, in the past ,under every single administration, every single year, we have had situations whereby cheques...were not being returned, but they were drawn on the account and we had to put some remedial action in place to fix them."