NASSAU, BAHAMAS — Bahamian digital payment solutions provider Kanoo yesterday clarified that it didn’t open a checking account for the Ministry of Tourism as indicated in an Auditor General’s report into The Bahamas Travel Health Visa program.
The corporate said in an announcement yesterday that because it pertains to having a contract with the Ministry of Tourism, it received written confirmation from the Ministry of Tourism on October 31, 2020. The corporate said it established a Merchant Account consistent with its regulatory requirements for account opening standards.
“The monthly subscription cost of the Merchant Account with Kanoo is $69, which was our standard published rate for a Platinum subscriber on the Kanoo platform,” the corporate stated.
It continued: “Kanoo didn’t open a checking account for the Ministry of Tourism. We’re licensed to supply “digital currency” accounts as a licensed Payment Service Provider (PSP) in accordance with the Payments Act, 2012 and the Payment Instruments (Oversight) Regulations, 2017.
“As a PSP, Kanoo is remitted by law and the Central Bank of The Bahamas to have a custodial non-interest-bearing checking account with a licensed industrial bank in The Bahamas for the needs of settlement. All withdrawals from a customer’s Kanoo account are client-driven. Just like online banking, our clients have password-protected access to their digital currency accounts.”
Auditor General’s report found that contracts for this system weren’t executed in accordance with the country’s financial regulations. The report tabled in Parliament on Wednesday noted that just over $34 million in gross revenue has been collected from the health visa program, which launched in November 2020.
The report stated: “We noted that the contracts for the BTHV program weren’t executed in accordance with the financial regulations 1975 Section 21(58), which stated that ‘all awards of contracts for supplies, works and services required by the federal government in excess of $250,000 shall be made by Cabinet’.”
Based on the report, services relative to this system commenced initially with only a verbal agreement, with contractual agreements executed weeks or months later. The auditor general’s report noted that while the Ministry of Tourism did ultimately submit fully executed contracts with the businesses involved, there was no contract officially executed with Kanoo.
Based on the Ministry of Tourism, the corporate was brought on attributable to the urgent need to offer an electronic payment solution for the travel health visa.
The corporate was paid $456,992.83 between November 2020 and August 2021, in response to the report.
The report read: “The opening of the checking account with Kanoo on the Bank of the Bahama is in violation of the Financial Administration and Audit Act, Section 24, which states ‘no one shall open an account with respect to public money with any bank without the written approval of the minster and no bank shall permit an overdraft of any such account unless such overdraft has been authorized in writing by the minister’.”
While the auditor general has asserted that only the minister of finance has the authority to open a checking account on behalf of the federal government, the Ministry of Tourism contended that Kanoo received written authorization from the management of the ministry to open the checking account on its behalf.
Based on the Ministry of Tourism, the Promotion of Tourism Act empowers the minister of tourism to enter into contracts “because the minister may deem mandatory”.
The ministry also said it “has at all times operated accounts into which receipts were disposed and from which disbursements were made using its long-established system of internal controls for paying vendors”.
