The Regional Tender Board of Region Six (East Berbice–Corentyne) breached several sections of the Procurement Act of 2003 when it awarded $615.34 million in contracts in the absence of public tendering, according to Auditor General Deodat Sharma.
The findings were contained in the Auditor General’s report for the fiscal year ending December 31, 2020.
The AG said that the Regional Administration prequalified 183 contractors for civil works in January of 2019 and they were retained in 2020 since no prequalification was conducted then. According to the AG’s report, 206 contracts totalling $615.34 million were awarded for capital and current expenditure. However, those contracts were not publicly advertised rather the Region utilized the restricted tendering process.
Section 25 (2) of the Procurement Act of 2003 states “A procuring entity may use a method of procurement other than tendering proceedings in accordance with sections 26 through 29, in which case the procuring entity shall include in the record required under section 10 a statement of the grounds and circumstances on which it relied to justify the use of that particular method of procurement.”
In keeping with the provisions of the Act, the Auditor General requested but was not provided with the documentation to justify the engagement of the restrictive tendering process.
“It was further stated in the Procurement Act 26 (1) (a) when the procurement method of restricted tendering is used, the procuring entity shall invite all Suppliers and Contractors to submit tenders for whichever category they were qualified. However, audit perusal of the Regional Tender Board minutes revealed that for twenty-nine contracts to the value of $232.029M, the Regional Tender Board had invited a maximum of five Contractors and in some instances less than five, to submit tenders,” the AG said in his report while recommending that the Regional Administration ensure full compliance with the procurement laws.
While the Region’s Budget Head did not provide an answer for the breaches, they did commit to undertake full compliance with the procurement laws.
Almost expired drugs
The Regional Administration had a budget of $646.4 million for the procurement of drugs and medical supplies and issued two inter-departmental warrants, totalling $450 million, to the Ministry of Health for the procurement of drugs and medical supplies on its behalf. The AG said that the requisite documentation, that is the list of drugs that should accompany the warrants to the Health Ministry were not presented for audit. Subsequently, the Regional Administration provided a list for audit scrutiny but it bore no evidence of a signature/stamp to indicate that it was a document prepared by the Materials Management Unit (MMU) of the Ministry. As result, it could not be determined whether value was received for the sum warranted to the MoH.
Inspection
An inspection of the New Amsterdam drugs bond in March of 2021 found that there were 693 items in respect of drugs and medical supplies that were expired and stored at the bond. Some of the items were expired in 2018 but the majority expired in 2019 and 2020.
According to the AG, the Pharmacy Bond Assistant explained that the expired items were received from various Health Facilities across the Region. However, they failed to provide documentation to support the claim and as such the AG recommended that the Region dispose of the expired drugs at the soonest, put systems in place to have a balance of items for drugs and medical supplies received against utilisation, so as to avoid the items becoming expired and ensure that the Stores Regulations are complied with at all times.
The AG also found that expired drugs and medical supplies were being stored with unexpired items along with inconsistent record keeping.
“Audit perusal of accounting records at the Drugs Bond revealed that eight items of Drugs and Medical Supplies received from the Materials Management Unit (MMU) were received with very short shelf life. The shelf life in some instances were less than two months and in one instance merely eighteen days. It could not have been determined on what basis the Health Officials of Region №. 6 would have accepted Drugs and Medical Supplies with such short shelf life. These items should have been rejected at the issuing stage at MMU,” the AG report stated.
Additionally, the Region procured items that it had large quantities of on hand and as of September 2021, all the items received were expired and packed away for disposal.
The table shown below gives details of the following:
Over at the Port Mourant Hospital, the Auditor General found that large quantities of 21 items were received from MMU with short shelf life. Verification of the items revealed that they were all received in November 2020 and expired in January 2021 with the exception of one item that expired in December 2020.
“Further checks revealed that for seven of the items, the entire quantity received from MMU had expired. It should be noted that this wastage could have been avoided had the Health Services Department done a more detailed assessment of the quantity of drugs and medical supplies needed from MMU and not requisition for excessive items and avoid accepting items with short shelf life,” AG Sharma said.
The AG also found discrepancies between the stocks on hand and the records.
As a result of the findings, the Auditor General recommended that the Regional Administration refuse drugs with short shelf life and implement better record-keeping practices.
Overpriced
The Regional Administration, through the Regional Tender Board, expended $196.4 million in the procurement of drugs that were not available from the MMU. It utilized $29.870 million for procurement of oxygen from a local supplier while $166.531 million was spent on other drugs.
That sum required a ‘nil’ list from the MMU but the Region was unable to present that to the auditors.
“Further, a comparison of the prices paid for drugs and medical supplies procured by the Regional Administration from local suppliers with that of the prices paid by MMU as indicated on the price listing submitted, revealed that for thirteen items the Regional Administration paid significantly higher prices when compared with MMU’s prices. Furthermore, the Region paid in excess of 200% more than MMU’s prices for eight of the thirteen drugs and medical supplies purchased.
The table below shows the drugs and the overpayment percentage
