The Urban Development Corporation (UDC) appeared before the Public Accounts Committee in Parliament (PAC) on Tuesday, March 19 to update on its progress with the implementation of recommendations from the Auditor General’s (AG) Performance audit dated November 2012. To date, more than sixty per cent of the recommendations have been implemented while work continues to complete the process.
One area of focus dealt with the matter of outstanding statutory deductions calculated at $242.16 million as at February 2013. It should be noted that both National Housing Trust (NHT) and National Insurance Scheme (NIS) payments have been kept up to date so that staff entitlements in these areas will not be impacted.
The UDC is currently in discussion with the Tax Administration Jamaica (TAJ) to pay the outstanding taxes for other statutory deductions. A payment plan which includes the offset of rental due from TAJ as well as the offset of withholding tax refunds is being negotiated. Since September 2012, $39 million has been offset against what the TAJ owes the UDC.
The Auditor General also noted the improvements made by the Corporation over the last three months with the board approving the proposed Enterprise Risk Management (ERM) policies and procedures, thus providing a framework for the formal, structured management of risk in the Corporation. The Corporation is also in the process of hiring a Risk Manager to oversee the ERM implementation process.
The AG’s report also pointed to the fact that the UDC has established& systems& to ensure proactive consultation with NEPA in the designation of developed areas and the preparation of the required plans. This is coupled with other key action items such as preparation of the audited financial statements for the 2010-11 financial year. The report further noted that the ‘UDC has developed a Business Turnaround Plan (code named Operation Phoenix) which aims, in the medium term, to plan to restore the Corporation to financial health and to be the premier development agency in Jamaica’.& In this regard, it is worth noting that, as a result of the collective effort of the board, staff and management, total revenues (fiscal year to date – February 2013) are 9% higher than those for the similar period last year while total expenses are 10% lower. Concomitantly, the AG notes that the ‘UDC continues to be challenged in the area of its financial intake with rent& and lease receivables, calculated; as at February 2013, at $184 million’. The UDC has re-established a Receivables Unit to ensure adherence to its collection policy. The unit will issue reminders to tenants and refer matters to the Legal Department as required.