“A significant amount of overpayments” to private contractors recruited to undertake works on behalf of state agencies, breaches of Stores Regulations, failure by Ministerial Tender Boards to comply with the requirements of the Procurement Act (2003) and a preponderance of “bogus” receipts and vouchers documented in the Auditor General’s 2009 Report point to “possible collusion between private contractors and people in government agencies” to defraud the public treasury, according to an Audit Office source.
“Of course the evidence points in the direction of rackets being run. It really is nothing new, you know,” the source told Stabroek Business.
The recently released 2009 Report states that during last year amounts in excess of $99m were overpaid to private contractors on measured works for contracts undertaken by Ministries, Departments and Regions. Accord-ing to the Report, amounts of $17.997m, $16.920m and $14.445m made by the Ministry of Education were noticeable among the overpayments. The Auditor General’s Report says that setting aside the fact that that the delinquent state entities were facing challenges in seeking to recover these amounts, “even more troubling is the perceived managerial inaction in relation to this trend, since there was no evidence to suggest that disciplinary action of any kind had been meted out to engineering and other staff involved in the assessment of works in progress and the certification-of-progress payments.
But according to the Audit Office source failure to take disciplinary action “or even to investigate the people involved” may well have to do with “not knowing where to start.” He said that an examination of previous Reports of the Auditor General would point to a pattern of irregularities in transactions involving state agencies and private contractors. “In some cases it really is a matter of who you know and whether or not you are prepared to become involved in collaborative ventures,” the Audit Office source said.
And according to the Auditor General’s 2009 Report there were several breaches of tender procedures “especially in Region No. 4, Demerara/Mahaica and the Guyana Elections Commission where contracts were subdivided in order to avoid adjudication at certain Tender Board levels”. There was also the falsification of quotations “to facilitate the awarding of contracts to specific persons”, resulting in fraudulent practices to the value of $11.2m being perpetuated on the Regional Adminis-tration.
The Audit source told Stabroek Business that the avoidance of tender board procedures and fraudulent documents were “among the more common cases of corrupt transactions involving government departments and private operators. A lot of money goes into the wrong pockets that way,” the source added. The 2009 Report also alluded to breaches of Stores Regulations as they relate to stores accounting, inventory maintenance and the marking of government property which the Audit official also identified as “another source of corrupt practices.”
Charges of apparent irregularities involving state agencies and private contractors outlined in the Auditor General’s 2009 Report include an advance of more than $2m by the Ministry of Education to an unnamed private contractor in 2002 for the completion of two 1-minute television features. According to the report the cost of the 10 year-old project which has now been “put on hold” included “accommodation and five air fares to an unspecified location together with shooting and agency costs.” According to the Report while the contract has been placed on hold “the contractor was not required to repay the advance.” The Report also cites a 2008 case in which it says the Ministry of Education entered into a contract for the supply of equipment for Technical/Vocational projects in the sum of $18.470m but the contractor has failed to honour the terms of the agreement even though the Ministry has paid over the full contract sum.”
Additionally, the Auditor General’s Report cites a slew of irregularities on the operations of the Education’s Tender Board including the award of contracts based on recommendations made by its own internal evaluation committee in contravention of Section 22 of the Procurement Act; approval of fifty-one tender awards by a Board Member in circumstances where the dates of those awards preceded the appointment of that Board Member. “The fact that this officer had comprised the quorum in the months preceding the appointment effectively invalidated sixteen awards, valued at $10.678m,” the Report said.
Meanwhile the Auditor General’s Report raises a number of discrepancies in the administration of grants for security services by the Ministry of Education. The Report cites a 2009 case in which the security grant was used to provide loan funding to a former Head Teacher and another in which two cheques for the security account were missing “and the related stubs were devoid of any transactions undertaken.” Additionally, according to the Report, ten payments totalling $778,377 could not be properly authenticated because of the absence of supporting documentation. “In the circumstances, the completeness and accuracy of the expenditure was not determined,” the Report said.
Meanwhile, the Auditor General’s Report cites numerous cases of irregularities in management and accounting procedures in the country’s regional administrative system and more particularly in Region Four. Particularly, the Report points to fictitious quotations, relating to the hire of transportation and patent irregularities in the payment to private contractors for security services in the region. Fictitious quotations were also cited on vouchers prepared to cover a $3.8m amount expended by the Ministry on the extermination of termites.
The Auditor General’s Report also alludes to the 2009 creation of a supplier specifically to supply items to the region in an arrangement that featured fictitious quotations, breaches of procurement procedures, conflict of interest, deficiencies in monitoring and purchasing procedures, the absence of bills/invoices from payment vouchers and the sub-division of purchases in order to evade adjudication by the Regional Tender Board. The Report also alludes to the fabrication of the minutes of the Regional Tender Board Meeting for December 2009 since no official meeting of the Board was held.