The Accountant General’s Department (AcGD) has come under the microscope of the country’s chief guardian of public expenditure for paying out millions to pensioners up to seven months after they have died.
Auditor General Pamela Monroe Ellis stated in her annual report, tabled in Parliament yesterday, that her department found instances in which the AcGD paid a total of $1.8 million to 25 pensioners, seven months after the expiration of their life certificates and acknowledgement of their deaths.
“The loss exposure, stemming from this deficiency, could be more, considering that we conducted our assessment on a sample basis,’ Monroe Ellis noted.
The policy of the AcGD stipulates that pensioners should submit life certificates on a quarterly basis to verify that they are alive before the disbursement of payments.
But the untimely verification of pensioners appears to be a recurring decimal for the AcGD. Monroe Ellis reported that this issue had been highlighted in previous audits.
She said that this has demonstrated that the AcGD had failed to reduce its risk exposure to the acceptable level of making payments to deceased pensioners for no more than three months, considering that life certificates are valid for three months.
“Although there are cases where pensioners’ life certificates had expired, or death acknowledged, the AcGD was slow in discontinuing pension payments, resulting in the loss of public funds,” Monroe Ellis said.
In another startling revelation, the auditor general found that the AcGD made pension payments of more than $609 million to pensioners living overseas between 2012 and 2018, without verifying that the pensioners were alive.
“We found seven instances in which pensioners did not submit any life certificate for periods up to 17 years,” she added.
The Jamaican Missions made payments to pensioners living overseas and AcGD reimbursed these payments monthly. However, the auditor general found that the AcGD routinely reimbursed the Missions without any verification to confirm the legitimacy of the payments.
According to Monroe Ellis, the matter was further exacerbated by the absence of formal procedural policies between the AcGD and the Missions to ensure the necessary verification that pensioners are alive.
The auditor general contended that the timely verification that pensioners are alive is a critical component in the pension administration process. She said that it safeguards the integrity of pension payments, reduced the risks of disbursing pension payments after the death of pensioners and ensured that payments were not being collected by ineligible individuals.
Monroe Ellis also highlighted that pension files and payroll system were not updated to ensure accuracy in the pension administration process. She said in some instances, it took up to 33 months to remove pensioners from the payroll.
“The failure to update the files and payroll system may result in irregularities and loss of public funds.”
This risk manifested when AcGD overpaid 23 dependents a total of $4.1 million because it failed to identify dependents over 18 years, or where extensions granted by the Ministry of Finance and the Public Service had expired for those in school. To date, the overpaid amounts have not been recovered.
Monroe Ellis recommended that the AcGD should act with urgency to review the pension system and implement strong and targeted internal controls to ensure the protection and integrity of the system. She said that this should include continuous and routine monitoring and clear policy guidelines, particularly over the overseas pension process.
She urged the AcGD to investigate and take steps to prevent and correct all breaches, including recovery of all overpayments.