Special Audit Report
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T
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Special Audit Report
R
O
L
E
S
&
F
U
N
C
T
I
O
N
S
O
F
T
A
X
A
D
M
I
N
I
S
T
R
A
T
I
O
N
J
A
M
A
I
C
A
(
T
A
J
)
These include:
•
A
dministration and collection of domestic taxes.
•
A
dministration and enforcement of laws relating to
domestic taxes.
•
R
egistration, audit and assessment of taxpayers.
•
Negotiation, administration and enforcement of
international agreements relating to taxation.
AUDIT RATIONALE & OBJECTIVE
3
This Special Audit was undertaken in response to
allegations of impropriety regarding TAJ’s leasing
arrangements.
The audit sought to determine
:
1)
If there was sufficient evidence to
substantiate the allegations received.
2)
If there were breaches in the TAJ’s policies
and procedures as well as the GOJ
guidelines
.
A
L
L
E
G
A
T
I
O
N
S
4
1)
Tax Administration Jamaica (TAJ) was seeking a property
to relocate its Tax Office in St. Mary.
The sitting member of parliament, through his private
company, bought a commercial building, a few
meters
from the existing Tax Office
,
that was
subsequently
rented to TAJ for approx. J$700,000.00
per month.
2)
The building is yet to be occupied by the TAJ, although
approximately 8 months’ rent has been paid.
To date, renovation/retrofitting works are yet to
commence.
TAJ
BEGAN
LEASING
A
PROPERTY
LOCATED
ON
M
AIN
S
TREET
, A
NNOTTO
B
AY
, S
T
. M
ARY
ON
J
ANUARY
25, 2022.
A
S
AT
A
UGUST
31,2023,
A
TOTAL
OF
J$15,000,000
WAS
SPENT
ON
LEASE
PAYMENTS
.
TAJ
PROJECTED
THAT
RETROFITTING
WORKS
SHOULD
COST
J$56,273,261.
Up to the time of this report, there was no evidence that TAJ
had relocated its operations to the property.
KEY FINDINGS 1
TAJ
DID
NOT
RECEIVE
WRITTEN
PERMISSION
FROM
THE
C
OMMISSIONER
OF
L
ANDS
PRIOR
TO
ENTERING
THE
LEASE
AGREEMENT
,
NOR
DID
IT
ENGAGE
THE
N
ATIONAL
L
AND
A
GENCY
(NLA)
TO
CONDUCT
A
VALUATION
OF
THE
SAID
PROPERTY
AS
STIPULATED
IN
SECTION
7.5.4
OF
THE
GOJ A
SSET
M
ANAGEMENT
P
OLICY
.
T
AJ’s management indicated that the requirement was
not adhered to in the interest of time
,
as another entity
was also interested in leasing the space.
KEY FINDINGS 2
T
HE
TAJ’
S
APPROVED
STANDARD
OPERATING
PROCEDURES
(SOP)
GIVES
THE
RESPONSIBILITY
FOR
THE
IDENTIFICATION
OF
SPACES
FOR
LEASING
,
SOLELY
TO
THE
D
IRECTOR
, P
ROPERTY
S
ERVICES
.
TAJ’S
SOP does not specify
an
approach to be used by the
Director, Property Services when identifying a property, nor is the
Director required to consider other possible locations suitable for
leasing. Additionally, no reference is made to a need for NLA’s
written permission or valuation, as required by GOJ’s Asset
Management Policy.
KEY FINDINGS 3
TAJ
ALSO
LEASED
A
BUILDING
IN
G
REENVALE
, M
ANDEVILLE
WHICH
IT
IS
YET
TO
OCCUPY
DESPITE
EXPENDING
A
TOTAL
OF
J$356,802,893
AS
AT
A
UGUST
31, 2023
.
Despite completing the proposal for renovation and furnishing in
June 2019, and the first lease payment in September 2020, the
necessary retrofitting works had not yet commenced as of August
2023.
TAJ also occupies 2 other locations in the Mandeville area
costing $51,173,341 per annum. TAJ indicated that relocation to
the 42,300 sq. feet location was to eliminate the challenges of
managing and delivering taxpayer services, at the other
two (2)
locations.
KEY FINDINGS 4
C
O
N
C
L
U
S
I
O
N
Whereas we found instances where TAJ was
not compliant with the GOJ Asset
Management Policy, we saw no evidence to
substantiate the allegation that the sitting
member of Parliament who is listed as the
Director of the private company that owns the
Annotto Bay location in question, interfered
with the TAJ’s procurement process, or
influenced TAJ’s decision to lease the
property.
10
W
H
A
T
S
H
O
U
L
D
B
E
D
O
N
E
I
NCREASE
TRANSPARENCY
AND
ACCOUNTABILITY
OF
THE
SELECTION
PROCESS
FOR
SUITABLE
PROPERTIES
FOR
LEASE
.
TAJ
should ensure the segregation of responsibilities
for identifying and selecting property for lease.
The Director of Property Services should identify
suitable properties for lease which would be shortlisted
for submission to an independent committee for final
selection.
WHAT SHOULD BE DONE
C
AREFUL
PLANNING
AND
EFFECTIVE
PROJECT
MANAGEMENT
Tax Administration Jamaica must urgently put in place
the necessary arrangements for the timely completion of
its renovation projects to reduce the level of nugatory
expenditure, especially at the Annotto Bay location
given the safety concerns at the current
‘A BETTER COUNTRY THROUGH EFFECTIVE AUDIT SCRUTINY’
This report highlights the findings of a special audit conducted in response to allegations of impropriety regarding the leasing arrangements of Tax Administration Jamaica (TAJ). It covers key findings, allegations, audit rationale, and the roles and functions of TAJ.
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Presentation Transcript
Tax Administration Jamaica (TAJ) Leasing Arrangements Special Audit Report
ROLES & FUNCTIONS OF TAX ADMINISTRATION JAMAICA (TAJ) These include: Administration and collection of domestic taxes. Administration and enforcement of laws relating to domestic taxes. Registration, audit and assessment of taxpayers. Negotiation, administration and enforcement of international agreements relating to taxation.
3 AUDIT RATIONALE & OBJECTIVE This Special Audit was undertaken in response to allegations of impropriety regarding TAJ s leasing arrangements. The audit sought to determine: If there was sufficient evidence to substantiate the allegations received. 1) If there were breaches in the TAJ s policies and procedures as well as the GOJ guidelines. 2)
ALLEGATIONS ALLEGATIONS 4 1) Tax Administration Jamaica (TAJ) was seeking a property to relocate its Tax Office in St. Mary. The sitting member of parliament, through his private company, bought a commercial building, a few from the existing Tax Office, that was subsequently rented to TAJ for approx. J$700,000.00 meters per month. 2) The building is yet to be occupied by the TAJ, although approximately 8 months rent has been paid. To date, renovation/retrofitting works are yet to commence.
KEY FINDINGS 1 TAJ BEGANLEASINGAPROPERTYLOCATEDON MAIN STREET, ANNOTTO BAY, ST. MARYON JANUARY 25, 2022. ASAT AUGUST 31,2023, ATOTALOF J$15,000,000 WASSPENT ONLEASEPAYMENTS. TAJ PROJECTEDTHATRETROFITTING WORKSSHOULDCOST J$56,273,261. Up to the time of this report, there was no evidence that TAJ had relocated its operations to the property.
KEY FINDINGS 2 TAJ DIDNOTRECEIVEWRITTENPERMISSIONFROMTHE COMMISSIONEROF LANDSPRIORTOENTERINGTHELEASE AGREEMENT, NORDIDITENGAGETHE NATIONAL LAND AGENCY (NLA) TOCONDUCTAVALUATIONOFTHESAID PROPERTYASSTIPULATEDINSECTION 7.5.4 OFTHE GOJ ASSET MANAGEMENT POLICY. TAJ s management indicated that the requirement was not adhered to in the interest of time, as another entity was also interested in leasing the space.
KEY FINDINGS 3 THETAJ SAPPROVEDSTANDARDOPERATINGPROCEDURES (SOP) GIVESTHERESPONSIBILITYFORTHEIDENTIFICATIONOFSPACESFOR LEASING, SOLELYTOTHE DIRECTOR, PROPERTY SERVICES. TAJ S SOP does not specify an approach to be used by the Director, Property Services when identifying a property, nor is the Director required to consider other possible locations suitable for leasing. Additionally, no reference is made to a need for NLA s written permission or valuation, as required by GOJ s Asset Management Policy.
KEY FINDINGS 4 TAJ ALSOLEASEDABUILDINGIN GREENVALE, MANDEVILLE WHICHITISYETTOOCCUPYDESPITEEXPENDINGATOTALOF J$356,802,893 ASAT AUGUST 31, 2023. Despite completing the proposal for renovation and furnishing in June 2019, and the first lease payment in September 2020, the necessary retrofitting works had not yet commenced as of August 2023. TAJ also occupies 2 other locations in the Mandeville area costing $51,173,341 per annum. TAJ indicated that relocation to the 42,300 sq. feet location was to eliminate the challenges of managing and delivering taxpayer services, at the other two (2) locations.
CONCLUSION CONCLUSION Whereas we found instances where TAJ was not compliant with the GOJ Asset Management Policy, we saw no evidence to substantiate the allegation that the sitting member of Parliament who is listed as the Director of the private company that owns the Annotto Bay location in question, interfered with the TAJ s procurement process, or influenced TAJ s decision to lease the property.
WHAT SHOULD BE DONE WHAT SHOULD BE DONE 10 INCREASETRANSPARENCYANDACCOUNTABILITYOF THESELECTIONPROCESSFORSUITABLEPROPERTIES FORLEASE. TAJ should ensure the segregation of responsibilities for identifying and selecting property for lease. The Director of Property Services should identify suitable properties for lease which would be shortlisted for submission to an independent committee for final selection.
WHAT SHOULD BE DONE CAREFUL MANAGEMENT PLANNING AND EFFECTIVE PROJECT Tax Administration Jamaica must urgently put in place the necessary arrangements for the timely completion of its renovation projects to reduce the level of nugatory expenditure, especially at the Annotto Bay location given the safety concerns at the current
