BELIZE: AUDITOR GENERAL ISSUES SCATHING REPORT

UNCLAS BELMOPAN 000046

SIPDIS

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: PGOV ECON SOCI BH
SUBJECT: BELIZE: AUDITOR GENERAL ISSUES SCATHING REPORT


1. (SBU) SUMMARY: The most recent report of Belize's Auditor
General paints a bleak picture of "widespread" waste, fraud and
abuse in the public sector. Like many of the reports of scandals
and corruption in the current government, this one made a brief
sensation in the press and then faded from view. The government has
-- so far -- not been put on the defensive about its governance
record during the election campaign. END SUMMARY.


2. (U) Belize's Auditor General Edmund Zuniga recently released
his report for the financial year 2006/2007. It is blunt in its
assessment of the situation in Belize: "fraud and impropriety are
widespread throughout the public service." The report cites one
example after another of lax or non-existent internal controls in
areas ranging from revenue collection to records management, bank
accounts, use of government vehicles and property management and
paints quite a sad picture of what happens to public money and
property here.


3. (U) The Auditor General was unable to provide an opinion on
several key government statements of account due to lack of
supporting documentation. The statement of assets and liabilities
and balance in the consolidated revenue fund contained "material
discrepancies," incomplete source documents, and had no
reconciliation of millions of dollars transferred between government
accounts. The report notes that "there is no indication of any
effort having been made to collect outstanding loans." The analysis
of the government's statement of public debt concludes that "as many
as 40% of public debt transactions could not be audited because of
the absence of source documents."


4. (U) The report cites numerous examples of fraud or misuse of
office. In one case, a government official made multiple
withdrawals from fake accounts in the Government of Belize Savings
Bank. When the fraud was discovered the individual was fired but
not prosecuted and the government made no effort to recover the
money. A review of the Ministry of Natural Resources turned up
multiple examples of Ministry officials acquiring public land (in
one case 58 separate parcels) at concessionary "social rates." Land
was subsequently transferred to relatives or sold at market prices.


5. (SBU) In a meeting with Poloff, Zuniga attributed the problems
noted in the report to a combination of inadequate rules and
policies, inadequate training, willful disregard of the rules and no
penalties for violations. He said that he had taken the initiative
to submit this report to both the Prime Minister and the National
Assembly so that the document would be made public. The previous
year's report, given only to the Prime Minister, has never been
brought before the House or released publicly.


6. (SBU) The press seized upon the report when it came out (one
headline: "Gov't records a mess!") but, as usually happens, quickly
lost interest in the issue and did not follow the story very far.
The current government has shown little interest in pursuing
corruption investigations or prosecutions. Zuniga told Poloff that
the Public Accounts Committee of the National Assembly would be the
most likely body to follow up, but he was not optimistic that that
would happen.


7. (SBU) COMMENT: Like the many other scandals that have plagued
the government, the Auditor General's report seems to have made a
brief impression and then faded from view. The opposition and the
press have so far had little success, even with an election just a
few weeks away, in keeping the government on the defensive about its
governance record. END COMMENT.
DIETER