Petrojam Caution

Petrojam Caution

Warmington, Opposition members of PAC question oil refinery’s role in forensic audit

Senior staff reporter

Wednesday, January 30, 2019

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Government junior minister Everald Warmington yesterday strongly cautioned against putting Petrojam in charge of the process for a forensic audit of the circumstances surrounding the $5.2 billion worth of oil loss at the refinery between 2013 and 2018.

Warmington joined Opposition members of the Public Accounts Committee (PAC) in rejecting the decision to have Petrojam, which has been mired in a corruption scandal over the past several months, integrally involved in the auditing project.

He said the move was illogical and should not have been conceived in the first place.

“How can Petrojam prepare a terms of reference to investigate themselves?” he asked. “We need to have a system that is totally transparent. Even if Petrojam puts together a good document for terms of reference there are people outside who would have doubts or question the process. So, I believe, for total transparency and confidence in the work to be done, it ought to be taken out of the hands of Petrojam,” he stated.

The audit was ordered by Prime Minister Andrew Holness after Auditor General Pamela Monroe Ellis, in her report from an investigation into the State oil refinery and aspects of its parent company, Petroleum Corporation of Jamaica (PCJ), highlighted that over 600,000 barrels of oil were unaccounted for during the six-year period.

Yesterday, permanent secretary in the Office of the Prime Minister, Sancia Bennett Templer reported to the PAC that the terms of reference for the audit had been completed by Petrojam and is to be put to public tender. She said the procurement process should take between three and four months. The PAC was reviewing the findings in the report.

Warmington also questioned the rationale for conducting a forensic audit specific to the oil loss, instead of a comprehensive forensic investigation.

“What prevents that firm from employing the technical staff necessary to do a complete forensic audit?” he asked. All they need to do is employ the technical team that has the knowledge of the area, do a complete [review] and give the country reason to be satisfied that you did a complete investigation of every aspect.”

Meanwhile, Bennett Templer accepted a suggestion from PAC Chairman Mark Golding that the Major Organised Crime and Anti-Corruption Agency and the Integrity Commission, which are both currently conducting separate probes into Petrojam’s operations, should have an input in the process.

“The scoping of the terms of reference for the forensic audit is vital because it will determine exactly what the forensic auditors are looking for, or not looking for, and to have this decided internally with the input of Petrojam itself and (for) them to handle the procurement is not acceptable in the circumstances,” he argued.

Golding further asserted that the process should be handled by the auditor general, given that it was that agency which had carried out the initial probe.

The auditor general made it clear that her office would only want to be involved if it has full control of the audit process. “If the AG is not completely in charge of the process I would not want to be involved at all, because what it is going to introduce is a moral hazard,” she said. “Once I am involved and have no control over the project, I have no control over the outcome, and so at the end of the process if I seek to question it, I may implicate myself by having reviewed it from the very outset, so I’d rather remain independent of the process or [have full control].”

Officials of the Office of the Prime Minister, Petrojam, and PCJ are slated to again appear before the committee next week, to continue the discussions. Among the additional information which the PAC has requested are details of the settlement packages given to the former Human Resources Manager Yolande Ramharrack, and former General Manager Floyd Grindley, both of whom resigned in the wake of the scandal. Ramharrack was the most recent of senior Petrojam staff to quit, just days prior to the publication of the auditor general’s report.

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