The Auditor General has highlighted in his most recent report several regional economic projects which were so poorly managed that in one case it cost the Regional Administration $92 million.
As a result of the situation, Minister of Local Government and Regional Development Nigel Dharamlall has announced that his ministry is working on the modalities for a forensic investigation to recover money invested on some projects undertaken by the three regions.
According to the Auditor General, regions Two, Five, and Six operated economic projects on a cost recovery basis with the objective of making a profit, yet because of poor management, Region 2 had three advances totalling $194,000 still outstanding, while Region Six incurred a loss of $7.510 million and did not present payment records to substantiate an expenditure of $3.396 million.
The most significant loss was however recorded in Region 5, which operated a farm to provide agro-supplies to schools and hospitals and offer employment for persons in the region.
“Records to substantiate the operations of this venture revealed that amounts totaling $92.480 million were invested for the years 2016-2019, whilst only $165,000 were realized as profit for the year 2019,” the report revealed.
It was also noted that the project, which was budgeted for as part of the Region’s capital expenditure in 2019, had already received significant funds from the current expenditure in 2016, 2017, and 2018. Capital sums were also expended on this project in 2018.
The report explains that in the 2019 budget, $15 million was allocated for the project under the Capital Expenditure program of “Agriculture Development”. The allocation was specifically targeted to the provision of crops and land utilisation with the expectation of fostering agricultural development and education within the region.
“The aim is to promote crop rotation techniques, proper land utilisation, processing of products, providing agro supplies to schools and hospitals and providing employment for persons in the Region,” it notes, while adding that the National Estimates sets the project cost at $150 million with a planned duration from January 1, 2018 to 31 December, 2020.
The project, however, had already started with the utilisation of current budgetary allocations in 2016.
“In this regard, amounts totalling $8.341 million and $1.286 million were expended from the Current Appropriations during 2016 and 2017, respectively. In addition; during 2018, amounts totalling $6.571 million and $34.980 million were expended from the Current and Capital Appropriations, respectively,” the report highlights.
In 2019, amounts totalling $14.998 million were expended from the Capital Appropriation, while $24.507 million was expended from the Current Appropriations, bringing the total expenditure on the project to $90.683 million as at 31 December, 2019.
Despite making this significant investment on such items as the constructing of a building, the purchase and installation of solar panels, and the purchase of specialised farming equipment, there was very little to show.
The Auditor General reports that ten batteries with a cost of $1.006 million and two solar panels with a cost of $80,000 were stolen and that a Regional Administration cash book accounting for the venture revealed that the sum of $1.782 million was received during 2019 from the sale of farm produce and the sum of $1.617 million was expended on fertilisers, seedling and other items.
“It was noted that the Cash Book was not properly maintained to reflect monthly totals of income and expenditure and there was no evidence of checks being carried out by a supervisory officer,” the Auditor General highlights.
Also examined was a Receipts and Payment Cash Book, which was maintained by the farm. This book was not properly written up, in fact, the information recorded was not easily comprehensible. “We could not determine whether all the proceeds from sales were accounted for [and] there was no entry of supervisory checks. It should also be noted there was no evidence of reconciliation between the records kept by the Farm and the records maintained by the Administration,” the report concludes.
The Regional Executive Officer is recorded as having “acknowledged the audit findings” and explained that the land occupied by the farm was an issue that was addressed by the courts and the Region is awaiting the formal documentation so that action can be taken with respect to this venture.
Speaking with the Department of Public Information (DPI) on Thursday, Dharamlall said the Ministry will soon write to the Auditor General to request an investigation as soon as possible based on the findings thus far. “There are some projects which we believe were mishandled and mismanaged, for want of a better description.
There was massive corruption in some of these projects. One that comes very quickly to mind is the land utilisation project in Region Five between the period of 2016 to 2019; over $90 million was spent on it, but less than $1.8 million in return,” he was quoted as saying.
He added that it is unclear how the administration operated the farm at a loss, when it also employed 28 persons. “There has to be an investigation to find out what exactly happened to the monies given. So, wherever the chips fall, I think we will pursue those culpable,” he said.
