Last Monday, the annual report of the Public Procurement Commission (PPC) for the period ending July 2023 was tabled in the National Assembly. According to the report, of the 1,558 contracts that the National Procurement and Tender Administration Board (NPTAB) and the Cabinet approved, the PPC received ten complaints/requests for investigations, representing less than one percent of the number of contracts awarded. One must, however, be cautious in interpreting this percentage as a reflection of the extent of dissatisfaction among suppliers and contractors, many of whom would be reluctant to report their grievances for fear of being discriminated against in relation to future awards.
Last Tuesday, the Ministry of Parliamentary Affairs and Governance held a workshop for senior public servants on ethical behaviour in the public service, especially as regards corruption in government, conflicts of interest, and unethical practices in public procurement. In her address to the participants, the Minister spoke of the need for anti-corruption mechanisms to be in place to enable them to be held accountable in the management of the affairs of the entities for which they have responsibility.
The Kaieteur News reported the Minister as having stated:
When you are a politician [and] if you want to be elected, you have to be accountable to the people… that goes for Permanent Secretaries who hold power, as well as Regional Executive Officers, overseers at the local government level, Toshaos at the Amerindian village council level, and the treasurers of that level.
We are now looking at how we develop capacity, what are the kind of training we need to do to make sure that every public servant who is at the highest level knows very well what the rules are…and [these are ones] that does not condone corruption.
We have to now reach a point where, as a government, as a public service, that we are holding ourselves to high standards.
The Minister added that part of the discussion was aimed at identifying mechanisms to prevent the abuse of public funds and strengthen State institutions so they can function more effectively. She noted that individuals in these positions have a moral obligation to ensure that citizens receive value for the money.
A few brief comments are relevant to the above statements attributable to the Minister. In March 1996, Guyana was a party to the signing of the Inter American Convention Against Corruption (IACAC). It also ratified the Convention in December 2000, but with the reservation that it did not consider it bound under Article XV of the Convention concerning seizure as this would violate Article 142(1) of the Guyana Constitution. The reservation was removed eleven years later in March 2011. Additionally, Guyana acceded to the United Nations Convention Against Corruption (UNCAC) in April 2008, three years after it came into force.
One of the key anti-corruption mechanisms contained in UNCAC relates to asset recovery, especially as regards freezing, seizure and confiscation of property. According to the United Nations Office for Drugs and Crime (UNODC), asset recovery is:
The process by which the proceeds of corruption are recovered and, when they were transferred abroad, returned to the country from which they had been taken or to their rightful owners. It is a particularly important issue for many developing countries where high-level corruption has resulted in a plundering of national wealth, and where resources are essential for the reconstruction and rehabilitation of societies under new governments.
The State Asset Recovery Agency was established under the previous Administration in keeping with the provisions of UNCAC. Unfortunately, it was disbanded following the change in Administration in 2020.
On numerous occasions, we highlighted the need to have in place a politically neutral public service staffed with professionally and technically qualified persons appointed based on merit rather than on political affiliation or close association with any ruling party. We specially referred to the appointment of Permanent Secretaries and Regional Executive Officers (REOs) by the President and the Minister of Local Government, respectively, without the involvement of the Public Service Commission. Permanent Secretaries and REOs are heads of budget agencies, accountable to Parliament via the Public Accounts Committee (PAC) for the use of public resources under their management and control.
Regrettably, the work of this important oversight body on public financial management has been stymied since the change in quorum size that saw fewer meetings being held. The PAC is now six years in arrears in its examination of and reporting on the public accounts, its last report having been issued in respect of 2016. This is even though two of the most senior Ministers are sitting on the Committee. It should not be over-emphasised that public accountability does not end with the issuance of the Auditor General’s report on the public accounts. The PAC needs to scrutinize these accounts and to submit its report of its findings and recommendations to the National Assembly in a most timely manner to enable the Government to issue its Treasury Memorandum setting out what actions it has taken or proposes to take in relation to these findings and recommendations. Additionally, legislators need information regarding the proper accountability for the financial resources approved for the previous fiscal year before considering the national budget for the following year. For the longest while, budgets have been approved without any regard for how sums previously approved to meet public expenditure have been expended.
In today’s article, we begin a discussion of the key corruption-related issues highlighted in the Auditor General’s reports over the years.
Procurement of goods and services, and the execution of works
The Auditor General’s report on evaluation of the operations of the then Central Tender Board in 1995 revealed that it was not functioning in a manner to facilitate an independent review. The recordkeeping and filing were completely neglected, and the minutes of the various meetings held to adjudicate on the award of major contracts were not available. It was indeed inconceivable that the Cabinet would have approved of the award of major contracts, and documentation of the logical sequence of events leading up to the awards was not available for audit scrutiny and evaluation.
The report had recommended a complete re-organisation of the operations of the Central Tender Board, the most significant being a change in its composition to reflect membership from outside the Public Service e.g., the professional engineering bodies, trade unions, the Consumers’ Association, and the University of Guyana. This recommendation was repeated in subsequent years. It, however, took eight years for legislation to be promulgated in the form of the Procurement Act 2003.
The Central Tender Board was replaced by the National Procurement and Tender Administration Board (NPTAB) with reporting relationship to the Minister of Finance. The NPTAB consists of seven members, appointed by the Minister from among persons of ‘unquestioned integrity who have shown capacity in business, the professions, law, audit, finance and administration’, as follows: (i) not more than five persons from the Public Service; and (ii) not more than three persons from the private sector after consultation with their representative organizations. The composition of the Board, it is to be noted, is not in keeping with the above recommendation, which was meant to avoid government control of, and influence over, this all-important body on public procurement. Representatives of civil society organisations, especially from the engineering profession, have also been excluded from membership of the NPTAB.
The Act provides for the appointment of Board members to be made for two years. It is, however, silent as to whether such appointments can be renewed. Two members serve on a full-time basis while the remainder, on a part-time basis. The Minister appoints the Chairperson from one of the full-time members. Four members, including the Chairperson, constitute a quorum, with the Chairperson having a casting vote. This means that to approve the award of a contract, the presence of only three other members is needed. The Board meets at least once every week, depending on the number of contracts it is required to adjudicate.
Following the change in Administration in 2020, the following persons were appointed to the Board: Tarachand Balgobin (Chairperson), Bernard Lord, Desmond Mohamed, Omar Narine, Steve Ninvalle, Mark Conway and Gloria Beharry. During the presentation of the 2020 budget, the Minister of Public Works had stated that the Chairperson’s appointment was a temporary one, no doubt in recognition of the fact that: (i) he is one of the most senior Finance Ministry officials who is responsible for the monitoring of the Government’s infrastructure development programme; (ii) there is a potential conflict of interest; and (iii) the Act provides for the Chairperson to hold a full-time position.
The life of the Board came to an end in October 2022, but there has been no announcement of the appointment of new members. In fact, the above persons continue to serve on the NPTAB, which suggests that they were reappointed, with the Finance Ministry official continuing as the Chairperson. The tenure of appointment of these members will again come to an end in October, and it would be of interest to learn of any changes that will be made.
Considering the above, the appointment of members of the NPTAB, its composition and reporting relationship need to be urgently reviewed. In particular, the Chairpersonship should not be held by a government official. In other jurisdictions, the services of the current members of the NPTAB would have been dispensed with swiftly in view of the recent criticisms and public dissatisfaction over the functioning of the Board in the award of major contracts.
Breaches in the financial, stores and tender board regulations
The Auditor General’s 1995 report also highlighted significant breaches in the financial, stores and tender board regulations several Ministries, Departments and Regions, the most notable being the Guyana Defence Force (GDF), the Ministry of Health, Region 3, Region 5 and Region 9. A particular breach relates to “contract splitting” to avoid adjudication by higher levels, such as the Departmental, Ministerial and Central Tender boards. Because of these breaches, the Auditor General could not satisfactorily determine whether full value was obtained for the goods purchased or services rendered. He strongly recommended that appropriate sanctions be enforced against officers who were involved in a deliberate manipulation of these Regulations.
The Auditor General continued to highlight these irregularities year after year without evidence of any actions being taken to remedy the situation. For example, in his 2003 report, the Auditor General stated that significant breaches in the Tender Board Regulations at the GDF were again drawn to the attention of the Accounting Officer. These include the absence of a system of competitive bidding and numerous instances of contract splitting to avoid adjudication by the Central Tender Board. There were also numerous breaches in the Tender Board Regulations at the Ministry of Home Affairs (Police), especially contract splitting to avoid adjudication by the Central Tender Board. This practice has resulted in irregularities in excess of $50M in the purchase of items of uniform.
To be continued –
