Yesterday we reported on the leaked financial documents relating to the Public Utilities Commission (PUC). The documents include audited financial statements and minutes of meetings of the commissioners of the PUC. Certified Public Accountant Cedric Flowers was contracted to audit financial statements of the PUC for the year ended March 31, 2017. While Flowers complained that some documents were missing, limiting the scope of the audit, he discovered what can be interpreted as questionable financial transactions. These include credit card spending up to seventy thousand dollars and up to fifty thousand dollars in donations which according to the auditors, were not supported by any documents showing approval. Yesterday when we questioned the Chairman of the PUC, John Avery on the matter he repeatedly told us that he cannot comment on documents he has not seen. Today Hipolito Novelo reviewed correspondences between the PUC and Flowers.
HIPOLITO NOVELO REPORTING
A letter dated August 11, 2017 reportedly sent by the office of Certified Public Accountant Cedric Flowers is addressed to the Chairman of the Public Utilities Commission (PUC) John Avery. The letter addresses audited financial statements of the PUC for the year ended March 31, 2017. In the letter, Accountant Flowers points out to Avery specific issues which could have ‘material impact on the financial statements’ and questionable financial transactions.
Flowers first addresses minutes of meetings of the Commissioners. According to Flowers, minutes presented to his audit team were incomplete even though the full set had been requested.
In a response, the PUC stated that some of the minutes which were not made available to Flowers QUOTE ‘do not contain matters which would require adjustments to/or disclosures in the financial statements.’ END OF QUOTE
According to a document, the number of board meetings does not correspond to the number of checks issued to Commissioners after attending those meeting. For example, 29 minutes of meetings were produced between April 2016 and March 2017. The report alleges that there were about 34 payments made during that same period. The report concludes that a commissioner was allegedly paid an additional $7, 500.
According to the documents, the PUC says that the minutes which were not made available are not accessible at the PUC and acknowledges that their failure to provide audit evidence in a timely manner could constitute a limitation on the scope of the audit…’
Flowers then speaks about ‘unapproved donations’. According to the letter, his auditors did not find any evidence of approval by the Commission for donations totaling $50, 000.
The PUC says that quote ‘there are no material transactions that have not been properly recorded in the accounting records …’ end of quote
Flowers, in his letter, alleges that the PUC quote ‘has not withheld and paid income taxes, as required by law, in respect of bonuses and gratuities.’ Un-quote.
Flowers speaks of the Raspberry Pi Program. In the letter he says that auditors have quote ‘observed cases of substantial modification of previously approved expenditures, payment of unbudgeted expenses (for example, reimbursement of personal expenses of the principal), lack of proper support for expenditures, and financing of its operations without an approved budget.’ End of quote.
To this, the PUC responded, that ‘all expenditures in relation the Raspberry PI Program have been made with the knowledge and consent of the Board of Commissioners, including reimbursement of personal expenses of the principal of that program.’
The Certified Accountant then addresses credit card expenditures. The leaked letter states that over $70,000 in expenditures for credit card purchases were either unsupported or lacked appropriate support. The letter says that the auditors saw no request or authorization for those expenditures before the transactions were initiated.
Additionally, the letter asserts that several of the expenditures were of a nature which did not appear to have any direct relationship to the activities of the PUC.
In response, the PUC stated, that ‘expenditures made with the use of the Commission’s credit card(s) have been authorized and were confined to expenditures of the Commission. It said quote, “In the event that expenditures were made for purchases other than for approved activities of the Commission, those amounts have been properly reimbursed to the Commission (or alternatively, arrangements have been made for reimbursement), of which a full accounting will be disclosed” end of quote
Flowers urge that the PUC review its credit card usage policy.
And lastly, Flowers speaks of ‘related third party transactions’. In his letter, he highlights two companies, Belize Cloud Services, and International Environments Limited. According to the letter, auditors did not see any evidence of a transparent selection process involving these entities; neither was there any indication of disclosure of relationship by/or recusal of the related Commissioners from the decision-making processes. Flowers urged the PUC to reconsider its policy in respect of potential conflicts of interest.
In its response letter, the PUC asserts that financial statements regarding related party transactions have been properly recorded or disclosed.
In the letter, the PUC states that it does not have any knowledge of any allegations of fraud or suspected fraud affecting the Commission. Reporting for Love News, I am Hipolito Novelo.
In a response to a request for a comment, Flowers told Love News that, “for the record that client-related documents originating in our office are intended solely for private, confidential usage. Since we do not propose to breach our duty of confidentiality to any of our clients, will not comment on the authenticity of any document held by an unintended recipient.”