Labour Ministry awards $2M contract before tender board open the bids

Nov 16, 2022 News

Kaieteur News – The Ministry of Labour in 2021 awarded two contracts totalling $1.995 million to conduct vehicular repairs, before bids for the same project were opened at the National Procurement and Tender Administration Board (NPTAB).

This incident was flagged by the Auditor General (AG), Deodat Sharma in his 2021 report.

Minister of Labour Joseph Hamilton

He explained that upon examining the payment vouchers and other related documents for vehicle spares and services, it was revealed that the two contracts were awarded to a contractor for repairs to the Ministry’s vehicle. However, the documents presented for audit revealed that in both instances, the tender board opening and approval documents were dated after the Contract Agreements were signed and dated.

Additionally, the Audit Office said the bills attached to the two Payment Vouchers were dated between June to September 2021, while the contracts were dated 13 September and 12 October 2021 respectively.

In response to the AG’s finding, the Ministry explained that emergency repairs were required for the vehicles, since at the time, there was a shortage of vehicles. It also assured that the office has taken steps to prevent the recurrence of this situation.

The Audit Office therefore recommended that the Head of the Budget Agency ensure that there is strict adherence to the relevant tender board procedures, for the awarding of contracts.

On the other hand, the report outlined that the sum of $39.538 million was budgeted to conduct maintenance works for the year 2021, but an allotment transfer totalling $4M was made, taking the revised budgetary allocation to $43.538M.

According to the Appropriation Account, the sum of $33.460M was expended as at 31 December 2021, resulting in an unspent amount of $10.078M, the AG report noted.

In response, the Ministry indicated that it had planned to conduct some construction works to facilitate repairs but did not have sufficient funds under the line item; hence a virement was done for the $4M. It went on to explain that it was later discovered via “repeated assessments” that the extent of the project would have classified it as capital instead of maintenance/recurrent and this resulted in time delays and the funds not being spent.

The Audit Office recommended that the Head of the Budget Agency ensure that there is proper planning and execution of its budgeted programmes, so as to avoid huge balances remaining unexpended at the end of the financial year.