According to preliminary findings, $6.931 million had been expended in violation of the established procurement principles. Investigations revealed that during 2008, amounts totaling $6.931M were expended on the procurement of various items from a supplier who commenced business with the regional administration from March 2008. Items such as janitorial supplies, dietary supplies, curtains, and refreshments, were supplied to Diamond Hospital, the REO’s office, and other departments in the region.
While this Expeditor was dismissed in January 2009, and the Revenue Runner for the Region was assigned duties as Expeditor in June 2009, the Auditor General noted that a similar pattern continued during 2009. It was observed that a particular supplier was again created to supply the Region from July, and a total amount of $21.346 million was paid to the supplier from July to December of last year. The supplier started out supplying janitorial items initially, then long boots, stationery, gas stoves, fridges, fans, office furniture, tyres, beverages, electrical items and paint for various departments in the region.
According to the Auditor General, an examination of the stores record, revealed that prior to July 2009, several business establishments supplied items/ goods to the Region. However, after July 2009, this individual was the main supplier, especially towards November-December of last year.
The supplier admitted knowing this new Expeditor and that he asked him to help with securing a business opportunity for the supply of janitorial supplies. According to the supplier, an agreement was reached and the supply of janitorial items commenced on July 4, 2009, the report said. The cost of the total janitorial supplies supplied amounted to $10,870, 332. The supplier further said that she was asked by the Expeditor to provide quotations for all other items in order to assist the Region in completing their work programme, hence the supply of a range of items by this one supplier. Other significant expenditures to this supplier were some $1,974,000 that was spent on appliances and $2,315,370 spent to acquire stationery.
Investigations showed that the supplier was registered to carry out wholesale and retail business, and according to its business registration, it commenced business on September, 7 2005 and was renewed every year until 2009. Checks by the Auditor General’s Office revealed that the business was operated at a Liquour Restaurant and a Wash Bay. The supplier explained that the business did not stock any of the items that were supplied to the Region, but that after uplifting the cheques and encashment, the items would be bought from various stores in Georgetown and transported to the Regional Stores.
The Auditor General noted too that every instance where purchases were made from this supplier, the prices quoted were always the lowest for every item. “Further, initially, quotations from a business located on Lombard Street were attached to the payment vouchers, while for the other two quotations attached to the payment vouchers were always from the same suppliers. It was later discovered that these quotations had a number of irregularities. “Both suppliers purportedly submitted over a hundred quotations during the period July to December 2009, but no purchase was made from either one of them.”
Examinations of these business registrations revealed that these were located in Enmore on the East Coast of Demerara and had the same names, addresses and telephone numbers. According to the Auditor General, the owners of the two businesses were then contacted and inquiries revealed that one supplier provided items to the Region early in 2009, which was confirmed in the Region’s books. However, the supplier never provided any quotations for other items, the report stated. Meanwhile, the other supplier stated that he never provided quotations for any supplies to the Region.
Further investigations revealed that from July to December, purchases were deliberately prepared below $250,000 in order to avoid adjudication by the Regional Tender Board. This constituted “spilt purchasing” the Auditor General noted, which is in contravention of Section 14 of the Procurement Act.
Meanwhile, the report said that during 2008, 15 officers, who terminated their services or had their services terminated were overpaid amounts totaling $1.923 million, which was made up of net salaries totaling $ 1.261 million and deductions amounting to $661,918. “In this regard, the Regional Administration is still to recover the overpaid amounts,” the report stated. Further, there were similar overpayments for the years 2006 and 2007. During 2006, $722,408 was overpaid and in 2007 some $1.391 million. According to the report, overpayments to date amounted to $4.036 million and this was reduced to $3.763 million with the recovery of $273, 374 from four officers during the current reporting period.
In response, the Head of the Budget Agency has indicated that advertisements would be placed in the National media for the officers overpaid to contact the Regional Administration on matters of mutual interest. Further systems are now in place whereby pay changes are submitted in a timely manner to the Regional Accounting Unit, the Head of the Budget Agency said.
The Auditor General noted that the findings of the special investigation would be issued in a separate report.
