Methods of Payment to Pensioners to be changed

KINGSTON — Minister of Labour and Social Security, Hon. Pearnel Charles says there will be changes in the methods of  payment to pensioners.

He pointed out that some of the options currently being considered include: direct deposits to pensioners’ bank accounts; monthly payments instead of fortnightly payments; and payments with cheques, instead of pension vouchers.

Addressing  the House of Representatives on  June 22,  the Minister  said he welcomed  the recommendations of the Auditor General mentioned above, “which seek to assist us to strengthen our risk assessment and mitigation strategies, as we endeavour to  ensure that the intended beneficiaries receive their rightful entitlements under the government’s social protection programme.”

The Auditor General recently conducted a Performance Audit risk assessment of the benefit programmes administered  by the Ministry,  and made reference to seven incidents of losses or fraud amounting to $8.7 million since 2006.  The report was tabled in the House on  June 14.

Another  recommendation of the Auditor General is the establishment of  a Risk Management Committee to stem social benefit fraud, which the Ministry has  set up.

“The Committee brings together the officers who have been carrying out risk assessment for their own areas as well as the internal auditors into one formal unit. Three meetings have already been held; two of these meetings were held with officers from the Auditor General’s Department, with the first being chaired by the Ministry’s Permanent Secretary,” Mr. Charles said.

However, the Minister expressed concern about some of the conclusions drawn in the report by the  Auditor General.

“The impression may be formed that all these losses accrued to the government. This is not so. Of the $8.7 million, a total of $6.8 million was recovered. This was not highlighted in the report,” Mr. Charles said.

“One of the examples highlighted in the report relates to the re-encashment of $5.7 million of  PATH cheques, which were previously negotiated. This matter was jointly investigated by the Ministry and the bank concerned. The bank accepted full liability for the losses and the Ministry was reimbursed the full amount of $5.7 million,” he added.

The other major item of fraud in the report relates to the misappropriation of $2.1 million in National Insurance Scheme (NIS) pension payments over five years. This matter was detected through the Ministry’s bank reconciliation system in October 2006.           

The required procedures and investigations were carried out in accordance with the Financial Administration and Audit Act and the individual involved was convicted and restitution in the amount of $1.02 million was made.

Reconciliation of encashed pension vouchers, which have been returned by the Postal Corporation, was also cited in the report.

“The Ministry readily admits that the current system of pension payments is onerous and laborious. This system involves the fortnightly payment of pension vouchers to NIS pensioners through the Postal Corporation and the National Commercial Bank, resulting in over two million vouchers being printed each year,” Mr. Charles said.

By LATONYA LINTON, JIS Reporter