For several years now the Auditor Office of Guyana has been churning out reports pointing out several discrepancies on the part of Ministries and Regional Offices among others. The most recent report has now included the recent imbroglio surrounding the Colonial Life Insurance Company (CLICO) Guyana.
The report that was made public recently, pointed to a contract awarded by the National Procurement and Tender Administration Board (NPTAB) for the construction of the new capital dormitory at the Georgetown Prisons in the sum of $24.7M.
The Contract was subsequently terminated in November 2008 but some $21.4M was already paid to the contractor.
The Auditor General cited that the reason for termination of the works was extreme lack of diligence on the part of the contractor and an assessment of the completed works revealed that the contractor was overpaid $10.5M.
In this regard, the Ministry levied on a performance bond for $12.3M, which was held with the now embattled insurance firm, Colonial Life and General Insurance Company Limited (CLICO), now under Judicial Management. However, to date this claim has not been settled.
The Ministry responded that it is making attempts to recover the amount overpaid and intends to engage the Attorney General for advice.
The sore issue of the outstanding arms and ammunition based on a purchase since 2003 did make some progress as was highlighted in the Auditor General’s report.
The report noted that one supplier had not delivered the order valued at $8.824M, due to transhipment problems.
However, with the approval of NPTAB and a ‘no objection’ from the Cabinet, the order was converted and items were supplied in July 2008 and January 2009.
Nonetheless, the orders from two suppliers that were valued at $2.336M and were outstanding since the year 2005 are still to be delivered.
The supplier of the MTSL shells was acquired from the Ministry of National Security in India, and required arrangements from the Ministry of Home Affairs.
In this regard, the Ministry of Foreign Affairs was engaged and diplomatic arrangements are in process.
With respect to the stallions, the supplier was charged criminally for failing to fully refund the contract sum, when it became evident that he was unable to make good the order. Only $50,000 of the sum involved was recovered.
Record keeping for fuel stored was found to be lackadaisical as it relates to supplies for the Guyana Prison Services.
The report pointed out that contrary to the established cash based method of procurement, the Guyana Prisons Service obtained a credit facility to facilitate purchases of fuel from a local provider.
This situation was compounded by the fact that there was a failure to adhere to the requirements of the Procurement Act during the acquisition of this commodity and a review of the Ministry’s records revealed that the supplier was overpaid an amount of $511,668, as at 31 December 2007.
The Ministry’s response was, that in April this year “a letter was sent to GUYOIL, requesting that they transfer the remaining funds from the Bulk Station to the Pump Station.” The Auditor General recommended that the Guyana Prison Service, as directed by the Head of Budget Agency, take action to ensure that the practice of purchasing fuel on credit be discontinued and to introduce measures for strict control over acquisitions of fuel.
The Auditor General also recommended that systems are put in place to avoid future breaches of the Procurement Act 2003 and its regulations, specifically as it relates to the limits of authority with regard to the procurement of goods and services. Among the fuel and lubricants purchased in 2007, there were 21,177 litres of fuel with a value of $3.2M that had been uplifted in containers and not properly accounted for in the records.
As such, the utilisation of the fuel could not be traced to any record.
A similar situation had also occurred in 2006 where purchases of 9,453 litres of gasoline valued at $1.9M were uplifted in a similar manner.
The Ministry did point out that action to correct this situation was taken in 2008.
The sum of $48.7M was expended on fuel during 2007 and the Auditor General observed that the system required the presentation of authorisation slips to uplift fuel, but these were not seen in 562 instances valued at $5.723M. For the period under review, there were forty-one payment vouchers to the tune of some $7.1M that were not presented for audit scrutiny.
“In the circumstances, the propriety of these payments could not be determined and whether value was received for the sum expended.”
The Ministry responded that efforts were being made to locate the remaining vouchers.The Auditor General also pointed out that, attempts to verify the stock of fuel held at the Mazaruni Prisons revealed that a calibrated dipstick was not available to measure fuel held in the reservoir.
Hence, he noted that the fuel had to be painstakingly filled in empty 45-gallon drums. After all the available drums were filled, the reservoir still had a significant amount of fuel, but on conversion the drums filled equalled the balance of 10,074 litres required by the stock ledger.
“It is clear that the stock of fuel was not properly managed, since there was no method of realising the actual balances on hand.”
The Ministry explained that the tank was only put into use in 2008 and the Guyana National Bureau of Standards (GNBS) was approached to assist in obtaining calibrated measuring devices, so as to alleviate this situation.”
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