Imbert: Full confidence in team to probe $2.6b revenue understatement

FINANCE Minister Colm Imbert says he has full confidence in the ability of a team appointed by the Cabinet to investigate the understatement of revenue for the last financial year and other related matters.

He made this statement during a virtual news conference on May 7.

Imbert began the briefing by announcing Cabinet's approval of a team recommended by him to investigate this matter.

The team will be chaired by retired High Court Justice David Harris.

Other members of the team include David C Benjamin, a former audit director at the Auditor General's department and information technology (IT) specialists.

The team is expected to report to Imbert within two months.

Imbert said great care was taken to select members of this team who are beyond reproach and eliminate any perception that the investigation into this matter is not independent.

He said during debate in the Senate on April 29 on a motion to extend the times for financial statements to be submitted and for the Auditor General to submit a report on such statements under the Exchequer and Audit Act, he underscored the need for an independent investigation into the understatement of revenue on the 2023 public financial statements.

"I said that because of the conflicting stories from both sides...you had the officials of the Central Bank saying one thing...in terms of providing the corrections to some of the errors made in the posting of revenue...and the officials in the ministry of finance saying they never received the corrections and things like that. I didn't want to go too deep into it."

Imbert said, "But what you had was a situation where a computer programme, software platform and introduced (at the Central Bank) to replace a manual system of reconciling tax refunds with a computer system which scanned the images of the e-cheques now being used for the reconciliation as opposed to the actual physical cheques which people look at the actual cheques themselves and do the reconciliation. They would now have to look at scanned images."

Officers at the Board of Inland Revenue, he continued, complained that this new software programme was locking them out of the system when they wanted to assess the e-cheques.

Imbert said Central Bank officials had a different story to this.

"Everything is okay, all of the errors are corrected. Credit and debit notices were sent and so on."

Against this background, Imbert said, "The best thing you can do is to have an independent investigation."

He explained the process he used to select the team which was approved by Cabinet.

To lead the team, Imbert said, "I decided that I wanted to have somebody beyond reproach to chair the committee or the investigation team."

He decided the best person to perform this role was a retired judge.

"Somebody at the highest possible level in terms of integrity and in terms of competence and ability."

Harris fit the bill.

"He retired (from the Judiciary) just a couple months ago, a very highly respected High Court judge to be the chairman. I don't think there is any question there is any question that this retired judge could not be independent, would not determine the true facts."

Imbert said it was important to have another member of the team who is not an employee of his ministry.

"There are many employees in the ministry of finance who have worked at the Auditor General's department and have been promoted out of that department to become permanent secretaries, deputy permanent secretaries (in the ministry)."

He disclosed one permanent secretary and a deputy permanent secretary were former senior officials in the Auditor General's department.

"I didn't want to use somebody like that because there would be allegations of lack of partiality and bias. We did a search for someone who had never worked in the ministry of finance but preferably would have experience at a senior level in the Auditor General's department."

This was how Benjamin was selected. Imbert said the process took a while because of the intensive search, conflicts of interest and health issues.

Imbert said there was no question about the integrity of the IT professionals on the team.

"The IT consultants are actually from Norway. They are in no way associated with Trinidad and Tobago. They are completely impartial consultants."

Asked about his relationship with Ramdass in light of everything that has transpired to date, Imbert said he has no interaction with the Auditor General in these matters.

He added that the Treasury and other officials interact with the Auditor General concerning the submission of public financial statements to her to use to compile her report for submission to Parliament.

"So there is no relationship issue between myself and the Auditor General. I certainly would not want to personalise this at all."

He said this matter has not affected the functioning of the government in any way.

"This is simply an audit of expenditure that has already occurred in fiscal 2023, which ended September 2023."

Imbert added there will be another audit of expenditure for this fiscal year.

The deadline for submission of these documents for the 2024 fiscal year is next January.

"So this is not in any way affect the ability of the ministry of finance to collect revenue."

Imbert slammed attempts by the opposition to make political mileage out of this matter and scandalise innocent public servants in his ministry for no reason.

The matter, he continued, has not cast government in a negative light with respect to interactions with entities such as the private sector, investors or external credit ratings agencies.

While the matter is not a nice situation, Imbert said, "We have never had any issues and the international agencies and I did go to Parliament to extend the time to resolve all of these issues."

He added, "The whole point of the motions that we debated and approved in the Parliament, in the House of Representatives (April 26) and the Senate (April 29), was to give everyone more time to resolve all of these issues."

As a result of these motions being passed, Imbert continued, his ministry and its divisions now have until the end of May to send any documents which the Auditor General could claim her department did not receive.

"I spoke to some of the public servants (in the ministry) just before I came here and they said with respect to some of these items, they know that they have the file. They have the file in front of them and when they look in the file, they know that all the documents were there."

He said the passage of the motions also gives the Auditor General until August to address additional information that is provided to her.

"So it's not a nice situation to be in and I mean, it is really reprehensible of the opposition to try to scandalise this whole thing and to create problems for the country. But we will sort it out."

He reiterated that Government is very reasonable and has excellent ratings with all international ratings agencies.

"I am pretty confident that we will be able to rally through all of this confusion generated by the opposition and move on."

Asked if the situation could have been resolved without the engagement of lawyers, Imbert said, "This is an unprecedented situation. I've spoken to a number of former permanent secretaries. I have spoken with people who have worked in the Auditor General's department over the years. I've spoken to people who have been intimately involved in audits of the public accounts over the 20, 30 years and so on."

He added that the information provided to him by these people indicates that "it is standard practice during an audit process that after the first set of documents is submitted that clarification is entertained."

Imbert said it is an unusual situation where there appears to be a reluctance to accept additional information.

"It's a real unusual situation. It is not normal from my research."

Pre-action protocol letters have been exchanged between Freedom Law Chambers, which is representing Ramdass, Imbert and Attorney General Reginald Armour, SC.

In these letters, Ramdass has defended her conduct in the submission of her report on the 2023 public financial statements to Parliament and in respect of information provided by the finance ministry on the $2.6 billion understatement.

Terms of reference of investigation

The terms of reference of the investigation, the Ministry of Finance said, will include:

What circumstances led to the understatement of revenue in the public accounts for the financial year 2023 and what should be done to avoid a recurrence of this?

The efficacy of the new electronic cheque-clearing system introduced by the Central Bank in February 2023.

The efforts made by the officials at the Ministry of Finance and its various divisions to correct the understatement of revenue, and to advise the Auditor General of the understatement and provide her with an explanation, clarification and further information on it.

What was the response of the Auditor General to the efforts of the public officials described above and what action did the Auditor General take in relation to the understatement of revenue in the audit of the public accounts for financial year 2023?

What are the facts in relation to the allegations and statements made by the Auditor General in her report on the public accounts of TT for the financial year 2023, including the addendum and appendices, with specific reference to the understatement of revenue in the public accounts for the financial year 2023?

Any other related matters.

Findings and recommendations going forward.