KINGSTON, Jamaica — An audit of the Firearm Licensing Authority (FLA) has revealed that millions in termination benefits were paid to former employees in breach of finance ministry guidelines.
The findings were published in a report presented during this morning’s Public Accounts Committee (PAC) briefing at Gordon House. The audit examined the accounting records and financial transactions of the FLA for the 2017/2018 financial year.
According to the report, the FLA paid five former employees approximately $8.4 million in termination benefits which were in excess of the amounts due under their employment contracts and in breach of a Ministry of Finance circular — Fixed Term Contract Officers Policy Guidelines.
The FLA terminated the employment of these individuals in 2017, the report said, and paid them notice pay ranging from three months to 20 months and gratuity without the requisite performance evaluations.
It said one officer was also paid three months’ travelling allowance as part of his termination package, while the termination agreements for four of the former employees did not indicate why the employees were terminated and management did not provide any evidence of the reasons for their termination.
The other employee was terminated with immediate effect after tendering his resignation and giving the FLA three months’ notice.
But the FLA has denied the finding, arguing that auditors ignored the explanation given.
“We have taken note of the findings in your report for the financial year ending March 31, 2018, and would like to use this opportunity to place on record our objection to item number three of your Key Findings ‘Excess Termination Payments in breach of Ministry of Finance Guidelines,’” the FLA said in response.
“Our objection is in light of the fact that the team of auditors made such findings based on a total rejection and/or lack of consideration for clause 9(i) of the Ministry of Finance and the Public Service Fixed Term Policy Guidelines. Clause 9(i), under the heading Contract Amendments, states that ‘Contracts may be amended by mutual agreement to facilitate changes in the terms and conditions of employment prior to the expiration date’.
“In accordance with clause 9(i) of the said policy, the Firearm Licensing Authority entered into mutual agreement (separation agreement) with four employees. The mutual agreement facilitated changes in the terms and conditions of the existing contracts of the individuals and was done prior to the expiration of their original contracts,” the FLA said.
The entity noted that it was on this basis that it made payments to these four employees.
“Therefore, contrary to what is stated in the auditor’s report, we did not breach or act in violation of the Ministry of Finance’s Fixed Term Contract Policy Guidelines. Instead, we acted and made payments within the confines of clause 9(i) of the policy. Furthermore, the payments made under mutual agreements were below the amounts due in the original contracts,” the FLA said.
It said the finding “is entirely erroneous and devoid of truth”.
The FLA said it saved approximately $5,081,908 compared to what was due under the contracts.
Meanwhile, the report also said that there was little control over the entity’s fixed assets and inventories.
Auditors were unable to determine the accuracy and completeness of the inventories balance of the FLA which totalled $2.5 million due to the absence of “appropriate” evidence to support the amounts in FLA’s accounts, the report said.
It also said management was unable to provide a record of the detailed movement of inventories as they reported that the relevant records could not be located.
