Govt. Orders External Forensic Audit of Finsac

The Government has ordered an external forensic audit into the operations of the Financial Sector Adjustment Company (FINSAC) and the Financial Institution Services (FIS) Limited.
This was disclosed by Minister of Finance and the Public Service, Audley Shaw, in the House of Representatives yesterday (February 19).
Mr. Shaw informed that the purpose of the audit is to examine and report on the “probity, and legality of sale agreements and management decisions made by the company and whether the Government of Jamaica suffered any loss that could have been avoided.”
“(It also seeks) to examine the internal control systems that led to fraud in the company. This audit was considered necessary because of reports of improper management and the manner in which sale agreements of FIS and FINSAC had been conducted,” said Mr. Shaw.
He pointed out that there was “fraud of some $28 million that is now before the courts, reports of internal control weaknesses, the absence of an internal auditor or an audit committee and the absence of financial statements to the end of March 2007, in accordance with the Public Bodies Management and Accountability Act.”
The Minister said that a report on the audit would be tabled in Parliament, once it is completed.
During the mid-1990s, a meltdown in the financial sector resulted in the closure of several banks and the bankruptcy of a large number of Jamaican entrepreneurs. FINSAC was formed by the then Government of the People’s National Party to manage the distressed assets held by the struggling financial institutions.
The FIS was incorporated on September 29, 1995 with the mandate to manage the operations of the Blaise financial institutions, comprised of Blaise Trust Company and Merchant Bank Limited, Blaise Building Society and Consolidated Holdings Limited.