$200M overpaid for government contracts- AG report

Details from the Auditor General’s 2019 Report show that some $199.381M was overpaid by the A Partnership for National Unity + Alliance For Change (APNU+AFC) for four major governmental projects.
According to the report, these overpayments had occurred under four ministries, namely the Ministry of Finance (MoF), Ministry of Public Telecommunications (MoPT), Guyana Defence Force (GDF) and Transport and Harbours Department (T&HD) in 2019. Against this, the report said, “Included in the $199.381M are amounts totalling $145M and $25.529M, which were overpaid on the rehabilitation of the Leguan Stelling, and expansion of offices at the Civil Defence Commission (CDC) Headquarters, respectively.”

Advance payments

With respect to the construction of St. Rose’s High School, two advance payments totalling $81.869M were paid to the contractor, Courtney Benn Contracting Services Limited, despite no significant works being completed. When the People’s Progressive Party/Civic (PPP/C) assumed office, the Attorney General terminated this contract on the basis of the contractor failing to comply with their contractual obligations.
Further, in the report it was recalled that a contract was awarded on 31 December 2019 by National Procurement and Tender Administration Board (NPTAB) for the construction of a Secondary School at Yarrowkabra, Linden Highway in the sum of $827.756M. It was indicated that a request to the Finance Secretary for multi-year approval was seen dated December 31, 2019, the same date the contract was awarded. A mobilization advance in the sum of $26.041M was paid to the contractor on January 7, 2020. But this contract has since been terminated.

Meanwhile, the report stated that the Ministry of Public Telecommunications had approved an advance payment of $17.171M and an interim payment of $31.829M, on the same date, for renovations and functional enhancements to a Call Centre Building at Linden, Region 10. Concerningly, the contract between the Ministry and the contractor was signed one day after the advance and interim payments were approved.

Capital works charged to current expenditure

According to the report, payments totalling $67.473M were made for capital works but charged to current expenditure, thereby breaching the Fiscal Management Accountability Act. It added that seven such payments totalling $54.358M representing approximately 81 percent had been made under Ministry of Public Infrastructure.

Negligent supervising consultants

The report said that several instances were noted whereby Supervising Consultants failed to administer contracts in the best interests of the Ministries/Departments. In particular: The MoPT made full payment on a contract to an engineering firm for design and supervision services for the renovations and functional enhancements to a Call Centre Building at Linden, Region 10. However, the audit office’s physical verification on September 4, 2020 revealed that there was no representative from the consultant on site to supervise the works.

“Further, the roof sheeting installed did not meet the specifications in the contract, while materials valuing $16.249M, already paid for, were not on the site,” it said.
The report continued, “With respect to the construction of Ministry of Finance New Annex Building, an advance payment of $64.55M was made to the contractor in 2017. As at 31 December, 2019, $26.506M out of the $64.55M was still not recovered. Further, the Bond provided for this remaining balance expired since 30 December 2019.”

Further, the AG Office stated that “the Ministry of Public Health had engaged a consultant to provide supervision services for the construction of its Head Office Building Phase One. It indicated that all valuations for payment were prepared without any breakdown of the works being paid for at the time. “Instead, only a summary sheet with the sums being paid for was prepared and submitted by the consultant recommending payment to the contractor. In addition, it was noted that payments totalling $26.408M were made as lump sums for variation works which, as a consequence, could not be measured and quantified.”

Finally, the AG office noted that the supervising consultants engaged by the GDF and the MoF for supervision services for the expansion of offices at CDC, and the construction of MoF New Annex Building, respectively, prepared and recommended full payments in several instances for works which were not completed by the contractors at the time.