$$ paid for work never started

Mar 07, 2010 News

---

More frauds at Region Four RDC…

– Region 4 Chairman

Almost half a million dollars was paid to clean the septic tank and weed the Diamond Regional Hospital early last year but officials there denied that any work was ever done.

Additionally monies were paid to repair the bucket of a Region Four excavator—the cost, $900,000. The problem was that the same bucket could have been ordered for $400,000 cheaper from an East Coast Demerara dealer.

These were just two incidences among several complaints listed in a letter sent by Regional Four’s Chairman, Clement Corlette, to the Auditor General on December 31, as increasing evidence of irregularities at the offices there surfaced.

The letter was also copied to Cabinet Secretary, Dr Roger Luncheon, Finance Secretary, Nirmal Rekha and the Director of Budget, Ministry of Finance.

All the incidences occurred under the watch of the Regional Executive Officer (REO), Shafdar Ali, who is under investigations for irregularities there.

Police, two Fridays ago, issued a wanted bulletin for Ali for questioning in what was described as “multi-million dollars fraud against the state. Accompanied by his lawyer, Khemraj Ramjattan, the official turned himself in Tuesday to investigators at the Eve Leary police headquarters.

On Thursday, Ali was released on $100,000 station bail after being grilled.

According to the letter sent by Corlette to the Auditor General, Ali, over a period of 33 months refused and failed to carry out the decisions of the Region Four’s RDC. Despite several correspondences, the REO also refused to allow for the oversight of the regional expenditure by the Finance Committee of the Council.

Between January and September 2009, almost $13M in works were carried out without being certified by the Works Committee of Region Four. Despite a letter in October to Ali to explain why large payments were made without verification of the works, the official refused to provide any answers, Corlette said.

In one instance, the REO performing the duties as Chairman of the Tender Board was suspected of fabricating a meeting of December 17, 2008, when no meeting happened. Contracts to the tune of $10.7M were awarded during this supposed meeting, the Regional Chairman wrote.

Corlette, in the letter, also told the Auditor General that in April last year, a complaint was sent to the Minister of Finance through the Minister of Local Government, Kellawan Lall, but there was no reply.

The RDC during a special meeting, approved works for $12M for specific bridges and $32.5M for roads in 2009. However, Ali allegedly refused to carry out orders to execute works on the bridges. Rather, he chose other projects and completed these, unknown to the RDC.

Regarding roads, the REO spent over $23M which was not authorised by the Council last year, the letter said.

In one instance, $4M allocated for furniture and equipment was largely spent on Ali’s personal office, at the expense of disregarding the needs of other key offices within the RDC.

Corlette also claimed that Ali breached procedures when following a complaint made to the Ministry of Finance over his handling of the Tender Board, he stopped inviting Region Four representatives to meetings of that body.

“As such, the meetings of the Region Four Tender Board were presided over by an exclusive panel of government-appointed members to the absence of the Regional Democratic Council.”

Two contractors, Eron Lall and Ravendra Latchman, as a result received 60 per cent of the Tender Board contracts in areas of road construction and repairs, building construction and repairs, and even weeding and cleaning of canals, drains and government compounds.

Corlette said that the office of the RDC Chairman was left without stationery supplies for seven months while some selected Councillors were denied payments of their stipends.

“No unpaid account for the year ended as at 2008 was made in 2009 notwithstanding a sum of $10M being earmarked. These funds are believed to have been otherwise used. Transparency seems to be a serious issue with the handling and management of Region Four funds under Shafdar Ali as Clerk/Regional executive Officer.”

The Chairman urged that based on the instances that were highlighted in the letter, the Auditor General should undertake an investigation of all aspects of the financial management and administration of Region Four with immediate effect.

The Auditor General, in his preliminary report into the accounts of Region Four for last year, made damning revelations that confirmed some of Corlette’s concerns.

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.

More than $160M in contracts were said to be involved, the findings of the preliminary investigations by the Auditor General revealed.

According to Minister Lall, during a press conference Thursday to discuss the issue, said that the irregularities were 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.

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.

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.

---

---