DBJ provided funding to financial institutions, without ensuring the sectoral targets received those loans

Auditor General's Findings

DBJ provides financing for Small to Medium Enterprises through various financial institutions. However, DBJ did not monitor the financial institutions to satisfy itself that the loans disbursed met the stipulated criteria. The AuGD noted that DBJ was required to monitor these institutions based on the signed general agreements with Approved Financial Institutions. DBJ did not enforce this requirement.

Permanent Secretary (current): Audrey Sewell

Breach Category: Project Management

Permanent Secretary (at breach):

Breach Type: Inadequate Project Monitoring

Status: Partial Compliance

Last Assessed: May 4, 2018

Year Reported: 2015

Year Resolved:

Recommendation

DBJ should also ensure that Approved Financial Institutions and Micro-Financing Institutions are properly monitored to provide greater assurance that loans provided to these institutions are on-lent to borrowers in the respective sectors of the economy for the intended purpose. For example, over the six-year period (2009-10 to 2014-15), DBJ provided $2.42 billion in loans to a Cooperative for on-lending to finance projects in the agricultural sector. However, DBJ did not monitor the Cooperative’s loan disbursement to ensure that the loans provided to the Cooperative were only on-lent to borrowers for agricultural activities.

JAMP Update

DBJ’s Response: In 2015, we amended our letters to require submission of evidence of disbursement and reporting to track receipt by the targeted beneficiaries.
New Access to Information sent on August 10, 2020 for update