It has been established as this island’s umbrella revenue policing agency, with primary responsibility for enforcement of the tax collection system.
However, based on the latest Auditor General Report for 2016, Government may well need to guard its revenue guard.
Following a detailed audit of the operations of the Barbados Revenue Authority (BRA), Auditor General Leigh Trotman has reported several infelicities, including a shortage of vital financial accounting information, understated tax revenues and unverifiable refunds balances.
And even though no shares have been issued by the central revenue collection agency, it is laughable that a figure for share capital was reported in BRA’s statement of changes of equity for the 2015/2016 financial year.
“This is misleading and should be corrected to reflect a more accurate assessment of the activities of the Fund,” the Auditor General has warned.
In his just-released 152-page report for last year, Trotman also reported that even though BRA reported assets of $3.7 million and liabilities of $392,000, there were no schedules or other forms of documentation presented to support these balances.
At the same time, grant income from the Ministry of Finance in the amount of $28 million was understated by $4.3 million, while the Authority’s expenditure was said to be overstated by $309,000.
The Auditor General has also raised alarm over the actions of the Margaret Sivers-led management team, which has been accused of acting without approval of the board on several matters,
“Based on the Authority’s Act, the Board of the Barbados Revenue Authority should approve the annual estimates of expenditure and other expenditure not included in the estimates,” the Auditor General pointed out, adding that “the Board should approve all policies established by the Barbados Revenue Authority (for example the issuance of cellular phones and payment plans)”.
The audit report for the financial year ended March 31, 2016 highlighted several instances in which insurance premiums for assets held by the Authority were not renewed in a timely manner, resulting in periods in which there was no insurance coverage for vehicles.
“This situation poses risk if the assets were to be damaged and stolen. For example, insurance renewals were $10,099.48 for computers, and $1,677.12 for two vehicles.”
These payments were due on April 2, 2015 and January15, 2016 respectively, but payments were made on December 31, 2015 and January 29, 2016 respectively.
“Insurance policies should be renewed on their respective anniversary dates to ensure the vehicles are covered for accident and injury at all times. The purpose of insurance is to reduce the risk to the entity,” the Auditor General warned.
Issues of payroll were also raised after it was discovered that audited seniors were being paid fixed salaries even though there was no documentation to support the authorization of this practice.
“It is recommended that the necessary action should be taken to have an approved Board policy indicating salary bands that are fixed and the movements between the bands.
“Employment letters should be amended to reflect the positions that are entitled to annual increments,” the Auditor General said.
He also recommended that “audit issues, once presented, should be addressed in a timely manner, to ensure that such issues do not recur in subsequent years”.
As for its revenue collection activities, the BRA audit came up short on information to support a brought-forward balance of $19.6 million related to refunds from the bank accounts of some legacy agencies as at April 1, 2014; net receivables amounting to $995 million; a difference in highway revenue receivables of $9.5 million and other receivables of $234 million.
There were also no financial schedules in support of $1.2 billion in total liabilities, including tax refunds payable.
As for the figure of $37 million which was given for income tax refunds and $105 million for corporate tax refunds, these could not be verified, neither could the Authority’s Statement of Administered Revenue, which was recorded at $2.1 million.
The Auditor General’s review of BRA’s accounting records also revealed an unexplained difference of $749,000 between unreconciled cash and unpresented cheques as at March, 31, 2016. There was a further difference of $1.2 million between what was presented in the schedules and the statement of administered revenues.
More alarmingly, property taxes came up short by $57 million after a comparison was made by the Auditor General of the expected revenue and actual taxes collected. (Barbados TODAY)
