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27 July 2016

Senior Port Authority officers get multimillion-dollar payments to which they are not entitled

THE Port Authority of Jamaica (PAJ) has found itself in trouble with the Auditor General’s Department (AGD) for disregarding Government guidelines regarding emoluments after its board approved multimillion-dollar payments to senior officers to which they were not entitled.

According to the report of a special audit of the PAJ tabled in the House of Representatives yesterday, one of 14 senior officers employed on contract received three pensions – one valued at $56.2 million, another for US$554,164, and a third which offered a lump sum of $120,000 and monthly payments of $34,834.

The officer reportedly received the benefit while in receipt of gratuity amounting to $31.33 million for November 2004 to October 2013.

The auditor general said the board approved the retirement benefit payments as part of the contracts of the 14 officers without consultation with the finance ministry. The payments were in breach of the ministry’s guidelines.

However, the AGD said that on July 15, 2016 the PAJ wrote to the Ministry of Finance seeking approval for proposed settlements that were being negotiated with the senior officers. The new arrangements involved the redistribution of funds which were previously set aside, in accordance with an actuarial study. The employment contracts of the senior officers, if approved by the ministry, would be adjusted to remove the provision of the retirement benefits, the AGD explained.

At the same time, the AGD found that the 14 senior officers were overpaid gratuity amounting to $15.05 million between April 2011 and March 2015. The auditors noted that the employees’ contracts provided for gratuity of 25 per cent of gross taxable emoluments, which also runs counter to the finance ministry circular which stipulates that gratuity should only be paid on basic salaries.

In its recommendations, the AGD called on the PAJ to take steps to recover amounts overpaid for retirement benefit and gratuity payments, and that those who approved the benefits should be advised that they could be subject to administrative action.

The PAJ is responsible for the regulation and development of Jamaica’s port and shipping industry.

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