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OT 287: Letter to the Chairman from Miller Simons O'Sullivan Attorneys at Law: TCI National Insurance Board
We have been asked by the National Insurance Board (the Board) of the TCI to bring the following matter to your attention. The recent Report of the Foreign Affairs Committee of the House of Commons, which you chair, states as follows in reference to the Board's 2005 audit:
"The auditors also expressed concerns that financial records presented for the audit had been deliberately adjusted to disguise the Board's true financial position."
The Board's auditors, PriceWaterHouseCoopers (PWC) have confirmed to us that they did not make that representation to your Committee. On behalf of the Board we have also reviewed the Report of the Chief Auditor dated March 2006 and the Submission made to your Committee by the Leader of the Opposition, the Hon Floyd Seymour. We have been unable to locate in either of the two Audit Reports or in Hon. Seymour's Submission any reference to financial records having been "deliberately adjusted to disguise the Board's true financial position", language connoting dishonesty as opposed to mere incompetence.
On behalf of the Board, we should be grateful if you could please point us to the section of either Report in which such concerns are expressed so that the Board may be in a position to take any necessary and appropriate action. Otherwise the Board requests that your Committee publish a correction so that the record reflects the true position.
Your Report also repeats an assertion by the Honourable Leader of the Opposition that the Board was breaching its investment policy in its investments in TCI Bank, The Board disputes this assertion Section 45 (5) of the National Insurance Ordinance (Cap. 137) provides that with the prior approval of the Minister any monies forming part of the reserves of the National Insurance Fund may from time to time be invested by the Board in accordance with the provisions of the Ordinance.
Section 47 of the Ordinance provides that the Board shall submit annually to the Minister an account of the securities in which the monies of the fund are for the time being investment. The Board has done this and the Minister has approved. In addition, section 47 (2) of the Ordinance requires the Minister to lay before the Legislative Council (House of Assembly) a copy of every account or report submitted to him under the section, no doubt for the purpose of legislative oversight.
These requirements have all been fulfilled and there has therefore been no breach of the investment policy of the Board by reason of its investments in TCI Bank.
We await hearing from you in relation to the point regarding the auditors.
22 August 2008 Letter to Miller Simons O'Sullivan from the Chairman
Thank you for your letter of 22 August on behalf of the Turks and Caicos Islands National Insurance Board about the Foreign Affairs Committee's Report into the Overseas Territories.
Your letter concerns two aspects of the section in the Report on the management of public finances in the Turks and Caicos Islands. First, you have asked me to point to the section of the Report in which the Committee received the following concerns: "that financial records for the audit had been deliberately adjusted to disguise the Board's true financial position" (paragraph 168). As footnoted at the end of the relevant paragraph in the Report, this allegation came from the Leader of the Opposition's evidence, which stated:
"The audit highlighted serious weaknesses with the accounting function. Basic Key controls were not properly prepared , nor in a timely manner:
'The financial records presented for the audit were inadequate, incomplete and misleading; in fact significant adjustments were made to reflect the true financial position of the national insurance board'.
The Audit Report also found that monthly financial statements presented by the NIB's financial controller to the Board of Trustees were MIS-STATED by several thousand dollars." (Ev 329)
While I accept that it might have been clearer that this statement originated from the Leader of the Opposition had we quoted directly from his evidence, I believe that this was a fair paraphrase of the evidence we received and I am therefore unwilling to publish any correction to the Report.
Your letter also disputes the assertion by Hon Floyd Seymour, highlighted in our Report, that the National Insurance Board was breaching its investment policy in its investments in TCI Bank. As you will be aware, in this section of our Report, the Committee simply set out allegations it had received; we did not make a judgement about the veracity of the claims. I thank you for placing your view on this point on the record.
Please be assured that your letter has been circulated to all Members of the Committee.
29 September 2008 |