Petrojam – Board of Directors Ineffective in Oversight Role

Auditor General's Findings

The Auditor General’s Department (AuGD) in 2018 published a report which reviewed aspects of the Petroleum Corporation of Jamaica (PCJ) and a comprehensive audit of Petrojam Limited.

This audit of Petrojam found that there was a breakdown in the Board’s oversight role. One example of this is that Petrojam’s agreement specified that the Board should meet at least once every other month. Therefore, the AuGD expected the Board to hold at least six meetings each year, which meant that 30 would be held in the last five years of the review period (2013-14 to 2017-18).

However, the Board of Directors held only 11 meetings in five years, which represents a serious deficiency in the established oversight mechanism and may have contributed to the operational and financial issues facing Petrojam.

In addition, the AuGD found no evidence that critical sub-committees such as the Finance and Audit Committees met  consistently to identify strategies to improve the operational and financial performance of Petrojam. In that regard, the role of the sub-committees to pay detailed attention to specific issues and report to the Board was absent.

The AuGD also found that Petrojam was tardy in submitting the required minutes and reports to MSET, and therefore was not in compliance with the PBMA and the GOJ Corporate Governance Framework.