Works Ministry understaffed - auditor general
Building contracts irregularities found
June 22, 2002
The Ministry of Public Works operated with 55% of its authorised staff complement in 2000, a reduction of two per cent compared with 1999 and Auditor General Anand Goolsarran said this would have impacted adversely on the level of internal control in that ministry.
He said the staff level of 293 persons against a complement of 536 would have resulted in the ministry contracting out, at considerable cost, many of the areas of responsibility that it would have undertaken in the past.
He again recommended that the staffing problem of the ministry be urgently addressed, especially in view of the fact that the ministry was the largest in terms of expenditure and undertook an enormous amount of capital work.
Goolsarran uncovered a number of irregularities at the Ministry of Public Works mainly in relation to building contracts. A project supervisor in the ministry was found to be in collusion with certain contractors and a number of overpayments were made on contracts. This matter was referred to the police for investigation and an arrest warrant was issued for the project supervisor, who has since skipped the country.
Like in the other government departments, Goolsarran found no evidence of the involvement of the various tender boards when limits were breached, or evidence of works being publicly advertised.
In some cases he found the Central Tender Board ignored the recommendation of the evaluation committee in the case of capital projects and awarded contracts contrary to their recommendation without stating reasons in the minutes of the meeting.
In the case of six road contracts with values exceeding $600,000, Goolsarran found that adjudication was by the ministerial tender board instead of the central tender board. In some of these cases, there was no documentary evidence attesting to the receipt and utilisation of the actual quantities of the various items acquired. Goolsarran's report said that transportation contracts did indicate the various locations these items might have been delivered to but could not determine whether the full value was received in respect of the amount expended.
The auditor general found evidence of apparent overpayment in several cases including in repairs to the DeWinkle building where $1.947 million was overpaid. The paid cheque was endorsed in favour of another person and the contractor in question disclaimed any knowledge of the contract and endorsement of the cheque. This matter was referred to the police for investigation. A similar situation occurred in the contract for the renovation of Fairlie House where overpayment of $524,425 was uncovered. In addition to this, $369,869 was paid to the project supervisor for consultancy services for repairs and renovation to Fairlie House and Goolsarran said this was improper as supervising the works was already part of his duties. This matter was referred to the police for investigation.
It was also found that cheques paid for consultancy services related to the renovation of the DeWinkle Building, the Prime Minister's and Permanent Secretary's office and for construction at the Appellate Tribunal building and the Environmental Protection Agency were endorsed and deposited in another contractor's bank account. The consultant denied any knowledge of the services rendered and of the endorsement of the cheques. Again the police were called in. The sum of $1.6 million was involved.
Overpayment was also made in relation to the rehabilitation of Colgrain House by a sum of $2.645 million and by a sum of $2.633 million to a contractor for rehabilitating four buildings at Timehri. In the case of the latter project, again payments were made to the project supervisor to the tune of $4.4 million for consultancy services when the officer is a full-time employee of the ministry being paid US$1,100 tax-free per month.
Among the various discrepancies unearthed in his report on capital works in 2000 by the ministry was that the consultant advised the termination of two successive contracts for the rehabilitation of 53 miles of road between New Amsterdam and Corriverton. The first contract was awarded for $5.9 million and by December 2000, $2.892 million was paid to the contractor and a further $837,450. But the consultant advised Goolsarran that the contractor had not completed the project and he advised the ministry to terminate the contract. Goolsarran could not determine if this was done. That contract had a clause for liquidated damages of $15,000 per day but there was no evidence that the ministry invoked that clause.
The ministry awarded a second contract in September 2002 in the sum of $3.58 million for the same project but at the end of December, only $2.649 million worth of work was completed. The consultant again recommended termination of the contract but it is not clear if this was done.
In the case of recurrent expenditure, the ministry spent $15.39 million on fuel and lubricants in 2000 but the logbooks were not presented for 13 vehicles and nine pieces of equipment while there were partial submissions in respect of ten vehicles. Goolsarran found evidence of unauthorised journeys among other things and could not determine whether effective control was exercised over the use of the ministry's fleet of vehicles and equipment.
The ministry spent $9.73 million on vehicle spares and maintenance and $4.24 million was expended in respect of 20 contracts awarded to an individual for the repair of 16 vehicles. Goolsarran noted that the individual operated from the ministry's compound and that the ministry had two mechanical workshops staffed with nine mechanics. He recommended that the present system be reviewed to have all the ministry's vehicles repaired at the workshop since there may be cost savings in this.
Advance payments were also made on a monthly basis for the purchase of fuel but except for the Civil Aviation Department, unnumbered requisitions were used to uplift fuel from the supplier and a number of irregularities incurred which were referred to the police for investigation. Goolsarran recommends that pre-numbered and pre-printed forms be used to requisition fuel from the supplier.
There was double payment to a supplier for the servicing of a vehicle and up to the time of reporting Goolsarran said there was no evidence that the amount of $49,989 was recovered.
Additionally, the ministry paid $4.5 million in telephone charges of which $1.6 million was on overseas calls in respect of 21 phones. Details of these calls were not entered into a telephone register and recoveries were not made for private calls made.
Again, Goolsarran highlighted the need to have the salaries bank account reconciled in a timely manner to avoid any irregularities being perpetrated without detection.
Goolsarran also noted that four senior officers in the accounting unit were working to reconcile bank accounts on a continuous basis since 1996 and at the end of 2000, the exercise cost $1.89 million in terms of actual overtime, payment of subsistence, travelling and the cost of meals. The accounting officer in the ministry said that the unsatisfactory state of affairs had ceased from June 2001.
He also found evidence of manipulations of voted provisions, which he cautioned against, and of the cashbook for the main account of the ministry being kept open until February 15, 2001, a violation of the law. The law requires that all unspent balances be surrendered to the Consolidated Fund but it was on May 31, 2001 that a cheque valued at $108.6 million was drawn in favour of the consolidated fund. Actual payment to the fund was not effected until October 2001 and Goolsarran said no satisfactory explanation was given.
A total of 745 cheques were drawn on the account during January 2nd 2001 and February 15, 2001 valued at $374.621 million and backdated to December 29, 2000. This, Goolsarran said, was manipulation of the voted provisions and should not be allowed to occur.
In the case of the Demerara Harbour Bridge, Goolsarran noted that it was not a separate legal entity and could not retain revenue to meet its cost of operation. The department collected $192.8 million in 2000 and retained it in violation of the FAA. A host of projects executed by the ministry were verified as having been done and the money accounted for.