Archive for June 19th, 2009

Missing revenue questioned

Missing revenue questioned

| 19/06/2009 | 21 Comments

(CNS): The dramatic difference in the predictions made with regard to government earnings by the Financial Secretary’s Office given to the Legislative Assembly Finance Committee in March compared to those revealed last week have raised a number of questions about how those figures could have changed so quickly. CNS has also learned that Financial Secretary Kenneth Jefferson had confirmed as recently as 5 May at a Cabinet meeting that the predictions that government would have earned over $507 million at year end were accurate.

However, in an explanation for the increase in the budget deficit from the March prediction of CI$28.9 million by year to CI$74 million, Jefferson said that the projected earnings were now CI$17 million less than he had predicted based on the information, and the CI government was now expected to have a year end revenue of only CI$490 million. Despite the fact that on 5 May the earnings were still expected to be CI$507 million, the missing revenue in a few short weeks has yet to be explained.

The information for the new forecast was based on data from the same portfolios and ministries which now leaves the question as to what happened in those few weeks to offer such a different picture. Former minister and member of the previous administration, Charles Clifford, says he finds it very difficult to understand how the financial secretary could confirm the predictions in the LA on 23 March and then again at a Cabinet briefing in May only to offer such widely different figures last week.

“The financial secretary himself confirmed those figures were accurate up to 5 May,” said Clifford “He says that he now has new information but something very significant has changed. So how do we know what to believe?”

Clifford said that with such a wide difference in the forecast in such a short period it was clear something mischievous was happening somewhere and that an outside and independent audit should now be undertaken to find out why. “I think perhaps the auditor general might want to put a hand to this and organise an independent audit,” Clifford added.

Auditor General Dan Duguay told CNS that there was an obvious and significant difference that did require some explanation. “I think that the financial secretary should be given the chance to make a statement to explain the differences and reconcile the two different numbers for government’s revenue,” Duguay noted, but said it was probably premature to talk about independent audits.

During the last meeting of Finance Committee before the House was prorogued for the General Election, Members of the Legislative Assembly heard Jefferson explain that projected government revenue had declined form an estimate at the beginning of the financial year by around CI$21.1 million. It is now clear that the original revenue prediction of over CI$528 million was out by almost CI$40 million and represents a significant decline in government earnings.

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