Mar 25, 2013 News
– PUC faced with several cases of overpaid contractors
By Abena Rockcliffe
The Public Accounts Committee (PAC), an arm of parliament mandated to scrutinize the Auditor General’s report, is faced almost every week with several matters relating to overpayments being made to contractors in most of the ten administrative regions.
The issue of contractors being overpaid is one that has been ongoing for years and members of the committee, especially those who are longstanding, have voiced frustration of having to deal with the same issues each year.
In most cases, contractors are overpaid when payments were made in full for works that either haven’t been completed or were done at a substandard level.
These issues are pointed out in most cases when an engineer attached to the Auditor General’s office inspects the building or project and to analyze whether the state got its money’s worth.
When such situations arise where it is recognized that a contractor has been overpaid, the government entity that made the payment is supposed to retrieve the excess payments. However, refunds from contractors have been proving to be quite a task for these organizations as it hardly ever happens.
Over the last two weeks, the PAC met in Regions Two and Three respectively. Those two regions were no different from the others in relation to the overpayment of contractors.
Region Three had numerous cases of overpayment.
Over-payments totaling $5.454M made to contractors for the years 2005-2008 were still not recovered. The $5.4M was overpaid in respect to twelve projects.
In the midst of the several cases of overpayment that couldn’t be recovered, was a classic one of a contractor being overpaid on three occasions.
The contractor was allegedly over paid $44,000 for repairs to a sluice at Bagotville, and then he was overpaid $228,000 for the construction of a Road at Hague.
Even though he didn’t refund the monies mentioned above, the same contractor was then granted a contract for the construction of a Satellite Clinic at Tuschen and was overpaid a further $848,000.
Asked to repay the monies, the contractor in 2006 wrote the PAC asking permission to appear before the committee to explain why he shouldn’t have to repay the money.
The committee reportedly felt that the matter was one to be dealt with by the Region and forwarded the letter to the regional authority.
He then allegedly disappeared; then a rumor circulated that the man had passed away.
However, the Auditor General told the committee that the man was still alive and now the Region is saying that he migrated and “efforts to contact him proved futile.”
In 2011, Region Three had four cases of overpayments being made to contractors, which amounted to $510,480.
Region two, however, had the most cases of contractors being overpaid.
Overpayments totaling 415,300 were made to a contractor in respect of repairs to the Regional mechanical workshop.
Then $132,180 was overpaid for repairs to a boathouse in Charity.
Some $209,612 was overpaid for construction of a Timber Bridge and $240,740 for another timber bridge at Martindale Primary School.
A contractor was also overpaid $114,500 for the extension of Oscar Joseph District Hospital, Charity, and$395,200 was overpaid for rehabilitation of Hackney Primary School. There were at least five other instances of overpayments being made; all over $200,000. However, Kaieteur News was made to understand that some of these monies were repaid but in minimal amounts.
For previous years, 2008 -2010, $1.868M was overpaid to contractors but $28,000 was recovered.
It is systematic for contractors to produce a certificate of completion upon executing the full contractual agreement in order for payments to be made. Whether the contract was awarded for supplies or construction, at the end, there must be a document to show that the terms of contract have been fulfilled by the contractor.
After, the Contractor/Supplier would have formulated the document, an official from the respective agency has to inspect and sign off.
Situations have arrived where officers signed for works which may not have been of good quality or similarly signed off on stocks that may have been undersupplied.
In situations like these, the auditors may find that that contractor or supplier has been overpaid. In those cases the monies need to be recovered. As of now the existing system is for the contractors to refund the money.
Region Six had a case where over $10M was noted as needed to be recovered from contractors for works as far back as 2005.
A Partnership for National Unity (APNU) committee representative Keith Scott’s position was that a contractor’s refusal to refund monies under the circumstances at hand should be deemed a criminal act.
Gail Teixeira, government’s representative on the PAC, has noted firmly that signing officers should be penalized for signing off on works that aren’t completed or not done satisfactorily.
AUBREY NORTON FRIGHTEN RENEGOTIATION AND RING-FENCING
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