Fiscal performance of some state-owned enterprises significantly worse than budgeted
/ Our Today
administratorFinances have deterioration by as much as $7.93 billion
The Pamela Monroe Ellis-led Auditor General’s Department (AuGD) is raising the red flag regarding the finances of some self-financing public bodies (SFPBs), which are significantly worse than budgeted.
The AuGD, which carried out an examination of the Government of Jamaica’s Interim Fiscal Policy Paper (FPP) for the First Supplementary Budget for 2021-2022, highlighted that “the performance of these SFPBs was significantly worse than budgeted. The records show that, as of June 2021, there was an overall balance deficit of $367.4 million compared with a budget surplus of $7.56 billion, representing a deterioration of $7.93 billion”.
Emphasising the threat being imposed on Jamaica’s finances by these SFPBs, the AuGD has concluded that this overall balance deficit figure is projected to continue for the remainder of the current fiscal year.
Seven large public bodies have been identified as being among these SFPBS.
“The impact of COVID-19 continues to be a contributing factor noted for the performance of some of the entities. The unfavourable results underscore the fiscal risks to the Government and, although continued monitoring was noted, no specific risk mitigating strategy was mentioned.”
Auditor General’s Department
They are Clarendon Alumina Production Limited, National Water Commission, Housing Agency of Jamaica Limited, Jamaica Urban Transit Company, National Health Fund, National Road Operating and Constructing Company and Urban Development Corporation.
The AuGD reported that “the impact of COVID-19 continues to be a contributing factor noted for the performance of some of the entities. The unfavourable results underscore the fiscal risks to the Government and, although continued monitoring was noted, no specific risk mitigating strategy was mentioned”.
The Andrew Holness administration has established a ceiling of $6.4 billion in support of selected public bodies for the purpose of arrears and liabilities but the AuGD cautioned that, “given that the total domestic arrears were already $5.48 billion as of June 2021, the established ceiling for these public bodies is in jeopardy of being exceeded by the end of fiscal year 2021-2022”.
The AuGD commented that, “besides closely monitoring these public bodies, the Interim FPP did not indicated what actions would be taken should the ceiling be exceeded, suggesting that operations and activities will continue along the same path in the face of the growing uncertainty for the entities, and fiscal risk to the Government”.
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