The storm of controversy over the use of the US$20 million Venezuelan grant has still not fizzled out, and in fact, the 106-page report of Auditor General Edmund Zuniga has unearthed a series of irregularities and bizarre findings—including documentation that claims that several housing grants were issued in the names of minors, in one case a child as young as 13 from Orange Walk.
Amandala had a chance to review the extensive special audit report on Wednesday night, and the report summarizes what happened to the Venezuelan grant. Off the top, US$10 million of the grant never made it to the public purse when the monies were disbursed to Belize on December 28, 2007, under the Musa administration.
Venezuela paid US$1 million (BZ$2 million) into the government’s account in the Federal Reserve Bank of New York for the reconstruction of an athletic track at the Marion Jones Stadium—which has still not been built, even though the monies were paid towards a BZ$2.5 million mobilization fee to contractors a week before the February 2008 general elections. Another US$9 million was sent to government’s account in the same New York bank for housing.
The audit report details nothing on the other half of the Venezuelan grant, which we know was diverted into the Belize Bank’s London account, but recouped from the Belize Bank last August by the Barrow administration.
The Auditor General’s report made it clear that the government had signed two non-refundable economic assistance agreements with Venezuela, stipulating how the grant was supposed to have been used. The agreements were for a total of US$20 million – US$1 million for the track, US$10 million for construction of homes for low-income persons, and US$9 million for repairs of low- income housing.
The audit suggests that the third portion of US$9 million was mobilized for home repairs, but nearly half was streamed into ministries other than housing to pay for, among other things, old bills that had nothing to do with housing.
Meanwhile, it appeared that no low-income homes were constructed from the Venezuelan grant, as all the photos in the audit report were for home improvement projects and not new construction. The auditors received documentation for 6,386 payments issued for home improvement loans and grants totaling $7.4 million; all of the departmental warrants specified home improvements.
(It appears from the audit report that the US$10 million diverted to the Belize Bank was the portion for new housing construction for the poor.)
What was clear to the auditors was that the government had no criteria in place to determine whether an applicant qualified to be in the “low-income” category.
(Then Minister of Housing Ralph Fonseca had said publicly that the funds were earmarked for the poor, but he did not stipulate an income threshold for applicants.)
Zuniga revealed in his report that in 88 instances, senior public officers—obviously well-known to their colleagues—had gotten loans or grants, and in some instances they, as well as hundreds of others not in the public service, double-dipped.
“Audit was able to conduct verification of salaries for those applicants who were public officers on the SmartStream system, and such verification proved that in most cases, the grant/loan receipts were for the most part senior public officers who, in our opinion, did not fall within the ‘low income’ category,” the report sated.
A perusal of the appendices in the report revealed that persons with salaries ranging from $20,000 to over $50,000 annually (and over $4,000 monthly), some of them holding head positions in their departments, were among the recipients of housing aid—concessionary loans of thousands of dollars.
“Cheques were made payable to some three hundred and thirty-one (331) persons for either multiple housing grants or housing grants and loans,” said the Auditor General, adding that, “This could be viewed as an indicator of the unfairness in the distribution of housing assistance under the Venezuelan Housing Programme.”
For instance, an applicant would get an $8,000 loan and a $1,200 grant; one person got two modest-sized grants of $150 and $300; another got three grants totaling nearly $5,000.
The Auditor General commented in his report that both the Financial Orders and the Finance and Audit Reform Act of 2005 had been contravened in the handling of the Venezuelan grant.
First, for the government to have spent the funds legally, it had to have gotten the approval of the National Assembly. Instead, the government issued a special warrant well in excess of the $500,000 limit inscribed in law—and the condition, even so, would have been “urgent and unforeseen need.” No such need was detailed in the report for the special warrant.
(Former Financial Secretary, Dr. Carla Barnett, had written a letter in January 2008, published in Amandala, warning of this very same breach and indicating that the amount the government was intending to spend without approval was 900% above the limit.)
Second, roughly $1.5 million was paid into commercial bank accounts of various ministries without the knowledge or approval of the Accountant General, Anita Eck. This, said Zuniga, contravened Financial Orders #301.
Furthermore, $8 million of the Venezuelan grant was earmarked for purposes that Zuniga feels contravened the loan agreements with Venezuela, specifically $2 million to pay for arrears to suppliers who had provided textbooks for the free textbook program through the Ministry of Education, $2 million for health sector reform, $2 million for infrastructure, streets and drains, and a further $2 million for the Blue Creek Road in Orange Walk.
Financial Secretary, Joe Waight, had issued the directive via email to the respective finance officers, said the report. The Auditor General explained that when they discussed the issue with Waight, he indicated that the commercial bank accounts were opened to facilitate payments to constituencies because of congestion on the government’s SmartStream Accounting System. Waight had said in his email that the allocation had been approved by then Prime Minister Said Musa.
The special report indicates that the Office of the Auditor General was presented with records for $10.57 million, with an additional $1.585 million paid out of the commercial bank accounts at the Belize Bank in all instances except for the Albert and Lake I constituencies, which were done through First Caribbean International Bank.
The total accounted for was $12.2 million, but total expenditures reported by the Finance Officer in the Housing and Planning Department were $19.5 million – a difference of $7.3 million.
“There is an urgent need to reconcile these differences,” the report said.
Zuniga’s special audit report closes with the recommendation for “...consideration to be given to provide for appropriate penalties for breaches of the Finance and Audit Reform Act 2005 and other Financial Regulations in respect of Government’s financial operations.” Amandala

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