Real action needed on stone report
Editorial
The Auditor General's report on the investigation of the importation of stone by the Ministry of Public Works captures in depressing detail the muddle in a key state undertaking. There are three critical areas which have been brought into focus by the report. The first has to do with whether the incapacity of the local quarry industry was clearly established before a Cabinet decision was taken to procure stone abroad. The import decision seems to have been based on revelations contained in an April 22, 1997 memo by a senior officer of the Ministry of Finance. That memo argued that the road construction and rehabilitation programme was in serious jeopardy because of the short supply of bauxite capping and quarry materials. Twelve days later, Cabinet approved the importation of 121,000 tonnes of stone from Canada and St Vincent. The Auditor General's Office investigated whether there had been a robust effort by the state to ascertain that the local industry was unable to meet demands. It requested documentary evidence from the Ministry of Public Works and Ministry of Finance to buttress the claim that the "problem centres around the scarcity of crusher run, sifting and stones". The two ministry officials asked could provide no information. The audit office then canvassed the three main local suppliers: Mazaruni Granite Products Limited, Toolsie Persaud Limited and Baracara Quarries Inc. The three were unanimous in their view that given adequate notice they could have supplied the needs of the local programme. There was also collateral evidence that their desire to participate in the local programme met with a series of inexplicable hurdles including a lack of response from contractors on their needs for individual projects, secrecy surrounding the state's total stone needs, ad hoc changing in the specification of stone required and a dramatic escalation in demands on local quarries at short notice. The audit report concluded that there was "no documentary evidence to suggest that the Ministry of Public Works was in communication with the local stone producing companies". Neither was there evidence that meetings had been held with them in a bid to resolve supply difficulties either severally or together. The audit report added that this situation "might have given rise to the feeling in many quarters that the shortage of quarry material might have been deliberately created to justify the importation of stone". The local quarry industry may indeed not have been in a position to adequately supply the government's needs during this period. However, the evidence gathered is strongly tilted towards their view that they were and it raises the still unanswered question as to whether the state was lax in its analysis of the local industry or there was a malfeasant rationale behind the imports. Given the benefits to the economy of patronising local suppliers and the cost savings, it is incumbent upon the government to convince the industry and the public that it was not devaluing indigenous inputs. The second area of concern is the misuse of funds from the World Bank and the Inter-American Development Bank (IDB). Three instances of this were found; two for the World Bank and one for the IDB. These institutions can at no level brook this type of impropriety and while the money was reimbursed through shunting funds from one account to the next it is a practice that can only imperil this country's access to new financing. That this transpired under the noses of high government officials is nothing short of disastrous and it diminishes confidence in the state's ability to competently shepherd its financial flock. Thirdly, the financial gymnastics performed within the Project Execution Unit (PEU) of the ministry must rank high in the handbook of how-not-to-do financial accounting and management. It would have been laughable were it not so serious. Some of these included the misuse of international funds, the inappropriate engagement of the PEU in procurement of goods and services on behalf of contractors, poor record keeping, a lack of audit trails and a haphazard stone import programme that likely saw excessive prices, short-shipments and breach of specifications. One infamous example is an unsigned purchase order from the PEU to a contractor for the supply of stone at a value X and another dated the same day from the contractor to a supplier for the said shipment of stone at the value of X minus US$200,000. Both orders, the Auditor General's report said, appeared to be generated on the same computer facilities and contained the identical telltale grammatical error. It raised the troubling possibility that the value of the order had been inflated by US$200,000. Another stark example is the purchase of stone from an intermediary rather than directly from a quarry. The state, according to the audit report, could have saved US$300,000 in this transaction by direct purchase. The Auditor General's report is replete with numerous examples of injudicious actions which when collated sketch a picture of either intentional deceit or monumental bungling. Neither is acceptable. The government gets high marks for inviting the Auditor General to conduct his investigation but it has miserably failed the examination that he set. It now must hope to pass with flying colours at future attempts and the only way it can do this is to ensure that the practices of agencies like the PEU are beyond reproach and in concert with sound financial management. It must also pursue the Auditor General's recommendation that those culpable of wrongdoing be censured. If the government is serious about a broader and vital role for Parliament, this report should be forwarded to the Public Accounts Committee for an all-party review of its findings and implications.
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