Elaborate scheme led to swindled millions

Mar 05, 2010 News

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By Leonard Gildarie

A preliminary report by the Auditor General into the accounts of Region Four for last year has made damning revelations that spoke of an elaborate scheme of complicity involving regional officials, and saw minutes of meetings being altered to defraud millions of dollars from government coffers.
Not only were prices inflated, but supplies were paid for but never delivered and suppliers with no business history with the regional government were given advances to buy goods and provide services.
Over $160M in contracts were said to be involved, the findings of the preliminary investigations by the Auditor General revealed.
And according to Minister of Local Government, Kellawan Lall, this was made possible by the collusion of Region Four’s Regional Executive Officer (REO), Shafdar Ali, Expediter Bharrat Persaud, an official of the region’s Tender Board and contactors.
Minister Lall made these disclosures yesterday during a press conference at his Kingston office. Along with the Minister were the Ministry’s Permanent Secretary (ag) Seewchan and former Minister, Clinton Collymore.
Lall explained that the Auditor General’s office was called in after a number of transactions done by Region Four’s Regional Democratic Council (RDC) were red-flagged.
FORGED MINUTES
Over $100M in contracts perused by the Auditor General found several glaring discrepancies that spelt what the Minister described yesterday as a “total breakdown in internal control.”
There were clear indications of collusion between suppliers, contractors and RDC officials, the preliminary findings of the report said.
Not only were there questionable and forged quotations attached to payment vouchers, but also there were several breaches in the procurement procedures.
These included payment for supplies that were never delivered, inflated prices for goods and services and payments illegally made to exhaust monies that remained in the region’s accounts at the year-end.
According to Minister Lall, the indications are that the REO was involved since he signed all the requisitions for the purchases – over $100M worth in contracts. “It is inconceivable that the REO did not notice that one supplier was supplying every item to the region when he signed over $100M in requisitions to purchase supplies.”
In addition, Lall stressed, the REO was present at RDC meetings, which approved purchases of items even though objections were raised.
There is reportedly evidence to suggest that minutes of the meetings, including details of dates, were altered, not circulated in accordance to procedure and were not signed by RDC members.
The Auditor General, in his recommendations, called for Ali to be disciplined accordingly along with the Expediter, who is in charge of purchasing for the region.
The report also asked for disciplinary proceedings to be carried out against the Secretary of the Tender Board for filing altered minutes of meetings of the RDC.
According to Minister Lall, the Auditor General also advised that the police be called in to investigate. This was done and the REO, the Secretary of the Tender Board and Persaud are presently assisting the police with their investigations.
Last Friday, the police issued a wanted bulletin for Ali who turned himself in on Tuesday. He was released
yesterday on $100,000 station bail.
INFLATED PRICE
Minister Lall also disclosed yesterday that from the initial findings, a business by the name of Nanda’s Parlour, Grocery and Hardware Store was awarded several lucrative contracts even though there was no evidence that it was reputable as a supplier to government – one of the requirements of the RDC.
There was evidence that quotations were “concocted” by the business and this was clear from the “writings and signatures” of documents which clearly indicated three required quotations came from one source, Lall noted.
The Minister explained that Nanda’s Parlour, Grocery and Hardware Store was awarded contracts in excess of $24M for supplying items for schools and hospitals in the region. These included items like refrigerators, stoves and fans. There were indications that this particular business was even advanced monies to purchase the items even though it did not stock them. Prices were inflated for the items also.
Lall further revealed that a contractor, Narindra Latchman, who was awarded $74M in contracts by the Tender Board and from the three-quote system, also fell under the radar of the Auditor General, as did Enran Lall, who won $67M in contracts.
The three individuals were consistently being awarded contracts and monopolised the supplies of goods and services to the region, the Minister disclosed.
Lall opined that the current system to deal with the regions is working but acknowledged yesterday that the persons placed there to monitor it, have to do so more aggressively.
With the system there to detect anomalies, the procurement procedures, if followed, should stop any deviations, he stressed.
However, the Minister acknowledged, it was clear that procedures like sealed envelopes for bids and tender boxes, were not adhered to.
There was also evidence of contract splitting, an illegal act, where RDC officials divided contracts to avoid having to go to the region’s Tender Board.
The REO has authority to spend up to a certain amount and there were cases where the contracts were split to facilitate his having to approve it.
Many persons, in various regions, have over time been dismissed for contract-splitting and government would be taking a stern stance on this, Lall said.
BLAME
Meanwhile, responding to questions, the Minister did not rule out the possibility of the Guyana Revenue Authority being called in to examine the books of the contractors in question.
With over 81 councils under the Ministry, Lall acknowledged that monitoring would be a challenge and the councils will have to play a more integral role in ensuring that the regions’ works are being carried out in an efficient and transparent manner.
Regarding allegations that the Ministry would intervene in a number of contracts and order payments when work is not fully completed or inspected, the Minister was clear that there are systems and procedures as well as checks and balances, in place.
If there are instances of payment requested, it was in the interest of the contractors being paid since there are cases of payments being tardy due to delay in inspections, among other things.
The Permanent Secretary, Seewchan, when questioned by the media yesterday, also echoed this.
According to Minister Lall, when the discrepancies were noted, the REO was called in, and in the presence of the PS and the Public Service Commission, had denied everything.

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