Despite abandoning a contract for the construction of the Regional Administration Building in Region Ten for which $39M was collected, a contractor was advanced an additional $73.1M on another project, which to date is incomplete.
This is among the many findings contained in the 2017 Auditor General’s report which was presented to the National Assembly on Thursday. The Auditor General scrutinizes public accounts and the accounts for ministries, departments and regions for each fiscal year, beginning January 1 and ending December 31.
The 2017 report identifies dozens of capital projects which are incomplete although substantial amounts of money have been paid over to the contractors. The errant contractors have not been identified in the report.
In the highlights section located at the front of the report, states that as it relates to advance payments to contractors and the non-commencement of works, it was discovered that one contractor received an advance payment of $39M in 2017 from Region No. 10 and at the time of reporting, the site was “abandoned and no works had commenced”. Similarly, the report informed that the same contractor received $73.1M in an advanced payment from the Ministry of Public Health in 2017 and at the time of reporting, “no significant works” had commenced on site.
While this newspaper was unable to find the Ministry of Public Health project in the report, there were details pertaining to the regional contract which was awarded by the National Procurement and Tender Administration Board to the lowest of six bidders, in the sum of $265.588M against an Engineer’s Estimate of $249.262M.
That contract, the report said was signed on the 29 December 2017 and the works were expected to be completed two years after the commencement date. As at 31 December 2017, an advance payment in the sum of $39M was paid to the contractor but a physical verification in July 2018 revealed that the site was abandoned and aside from a quantity of white sand stockpiled on site with two material storage sheds/ bond, no personnel or equipment from the contractor was present, the full advance payment in the sum of $39M was prepared and processed in the name of the contractor in 2017 while at that time no advance payment bond by the contractor was in existence and at the time of audit in July 2018, the Regional Democratic Council (RDC) was now requesting permission to go to tender for supervisory consultancy services for the supervision of the works under this contract which was awarded since 29 December 2017 and for which the contractor was already in possession of $39M as an advance payment.
The advance bond was only issued on 2 February 2018 by Caricom General Insurance Company Inc, the report said.
In response to the Audit Office’s finding, the region indicated that the mobilisation advance of $39M was paid only on 29 December 2017 and the matter is “engaging the attention” of the Ministry of Communities and the Ministry of Finance with a view of engaging a Supervising Consultant.
To this, it was recommended that the Regional Administration ensure proper monitoring of all contracts awarded.
Meanwhile, the report stressed on the continuous overpayments on contracts and procurement breaches.
It was stated that overpayments amounting to $71.738M were made in respect of measured works on 79 contracts administered by Ministries, Departments and Regions in 2017, of which sums totalling $37.093M and $34.645M were in relation to Regions and Ministries/Departments, respectively. Included in the sum of $37.093M were overpayments amounting to $20.051M or approximately 54% in Regions 1, 4 and 8. Included in the sum of $34.645M overpaid on contracts in Ministries/Departments, were amounts totalling $20.117M and $9.336M or approximately 58% and 27% for the Guyana Defence Force and the Ministry of Public Security, respectively, it said.
The report added that at the time of reporting in September 2018, a total of $15.258M out of $37.093M or approximately 41% percent of the total overpayments discovered under the Regions had been repaid while 17% or $6.018M out of $34.645M discovered under the Ministries/Departments were recovered. Taking these repaid amounts into account, a balance of $50.461M in overpayments still remained outstanding, of which $28.626M is for Ministries/Departments and $21.835M is for the Regions, it was stated.
Regarding breaches of the Procurement Act, the report said that this was discovered in Regions No. 5 and 6, where contracts were incorrectly awarded using Restricted Tendering instead of National Competitive Bidding. Further, contracts were incorrectly awarded by the three-quote method in Region No. 2.
The report pointed out too that there was a continuation of the practice to “cut and hold” cheques at the end of the fiscal year for valuation of works, poor quality/sub-standard works, poorly prepared Bills of Quantities and contract documents, in breach of the Fiscal Management and Accountability Act (FMA).
