Financial Secretary, Mr. Neil Smith speaking with members of the media, March 20, 2017
Photo Credit: Melissa Edwards/BVI Platinum News
After a late night press release, Financial Secretary, Mr. Neil Smith met with members of the media today, March 20 to explain the processes of government payments.
This came hours after Smith apologized for Premier and Finance Minister, Hon. Dr. D. Orlando Smith being provided with inaccurate information about certain payments that were in progress on behalf of the Royal Virgin Islands Police Force (RVIPF).
However, speaking with members of the media today, Smith did not speak or entertain questions regarding the false information provided to the Premier. The FS sought to explain the processes and the issues surrounding payments at the Treasury Department.
He also said that Governor John Duncan did what he felt he had to do when exercising his constitutional powers for the force to be given an additional $800,000.
"I think that the Governor did what he felt he had to do. I wouldn’t get into it. I don’t know the specifics of what made him do that, but I believe that between the Members of the House of Assembly, all of them and the Governor, and the basic civil servants, everybody is trying to do what they think is best for the country," he told reporters.
He added, "They might have misunderstandings and sometimes depending on how long or what occurs in those misunderstandings, mistakes might be made. But I really as a civil servant I don’t have an opinion on things like that."
Smith said that there is a process which takes place before the Treasury Department receives the voucher for payments to be made, noting that the issue does not lie at Treasury.
"If someone in a Ministry, department wants to purchase a service or goods, they raise what we call a Purchase Order and that Purchase Order is basically to proceed with the process to purchase the goods or services. That Purchase Order is done within the budgetary allocation given for the year," he said.
"And because you don’t have the full budget amount at the beginning of the year, some sort of constraint has to be put on how much you can spend in January and how much you can spend in February."
He further explained that when the Purchase Order is presented to the vendor, and they provide the goods or services, they will present an invoice to the department or Ministry that presented them with the Purchase Order.
"That Purchase Order is processed by that Ministry and it is then sent. A voucher is raised with regards to that invoice, which is sent to the Treasury department for payment."
Smith said that since August of last year, they have adjusted the procedures in the Treasury Department, which provide that they constrain themselves to a 30-day turnaround cycle. He said that the $25M line of credit is helping a great deal with this.
"So if a voucher reaches in Treasury on day 1, by the 30th day it is supposed to be paid. They are extraneous circumstances where you have really big bills in the millions that we would ask for leniency from the department or agency...So instead of 30 days, it's now instead 35 days...Small bills are less than 30 days."
The FS stated that it is important to note that when a vendor sends their information to the department or Ministry that required their goods or services, it might take some time before it's processed.
"You have to wait until the Ministry or department processes that invoice and produces a voucher, and then that voucher is produced to Treasury where we are aware of the date and time it arrives there, and then we give ourselves a window of 30 days."
He added, "If you have an instance where it took a while to produce that voucher or an invoice, it is going to take you some time to get paid. Normally, if somebody does something that they were not supposed to do, that happens in a fair amount of time.."
Smith indicated that with regards to the police force, there is a very expeditious approval, "but the process behind of that would have been subjected to many of the issues that we normally get."
FS Smith also disclosed in detail the trouble where there are many instances where you try to raise a Purchase Order and it was not budgeted for. More on this in a subsequent article.