GuySuCo’s system designed to encourage malpractice

Mar 19, 2010 News

---

– says sacked official

A procurement manager who was summarily dismissed by the Guyana Sugar Corporation (GuySuCo) on Monday has signaled his intentions to take the matter to court.
According to Aasrodeen Shaw, who was manager of the company’s Materials Management Department (MMD), he was not allowed to formally respond, and his sacking may have been as a result of recommendations he made in a report on the weaknesses of the department which had systems designed to encourage malpractice.
Shaw appeared before the Board of Directors at a special hearing last Monday.
He was asked to explain “the inefficient manner” in which tender documents for the purchase of 40,000 pounds of #8 electrodes were processed.
Kaieteur News was told that Shaw’s failure to present the evaluations of said tender documents to the GuySuCo’s Head Office Tender Committee and thereafter the Central Tender Committee was an issue he was questioned on.
These documents were said to have been in his possession since two months ago.
The procurement head was also accused of splitting the electrodes contract by buying smaller quantities at a higher price and at the same time failing to ask the Central Tender Committee to adjudicate on the purchase of this item.
A senior GuySuCo official said that it is as a result of these infractions that the decision was taken to summarily dismiss Shaw.
Critical Report
According to a statement to this newspaper by Shaw yesterday, the report he did on the MMD was acknowledged as being “beneficial” but because it criticized the current system of procurement at GuySuCo, the implementation of the recommendations was halted.
“Recently it was brought to my attention that the structural and operational recommendations conflicted with the current structure that was created to seamlessly encourage malpractice and efforts to defraud the corporation.”
Shaw, in the statement, stressed that the report was not meant to praise nor defame anyone but to identify the bottlenecks in the system and to put procedures in place to further protect the procurement practices from possible wrongdoing.
The report also pointed out that since 1998, GuySuCo had not conducted a physical inventory of items stored across the country. An attempt to do so last year was “impossible” and inaccurate because of an IT change.
“The book value of the inventory is approximately $4.3B of which more than half of the items are obsolete, which highlighted a weak financial control system on part of the Finance Director.”
According to Shaw, shortly after the report was discussed, a number of procedures were put in place which effectively created delays in the purchasing.
This included the countersigning of all purchase orders by the Finance Director.
Shaw said that a July 2009 audit revealed breaches in procurement but no action was taken against the guilty employees.
Shaw accused the Finance Director of deliberately trying to create an inefficient MMD through late delivery in an attempt to have him dismissed.
“The current process is inefficient, ineffective and reduces productivity tremendously. The real inside view of the process will reflect a lengthy procurement process, poor storage of spares, wastage, theft and obsolete items valuing over $2B being overlooked.”
Shaw claimed that he saved GuySuCo $20M during the last few months in contract negotiations.
Dismissal
Shaw claimed that the meeting with the board on Monday highlighted clearly that there was no clear understanding of the report.
“Prior to the meeting, I received neither notice nor briefing regarding the alleged accusations.”
He claims that he requested a day to answer the charges but was given 15 minutes.
“Clearly, this reinforces my point that certain board members already entered the meeting with a ‘made’ decision.”
Addressing particular accusations that he split contracts for a tender of 40,000 pounds of #8 electrodes, Shaw claimed he refused to process it since the amount was unusually high and GuySuCo was cash-strapped. He noted that GuySuCo had never bought more than 15,000 pounds at any one point in time, given issues with storage and theft, and these were factors that helped him reach his decision.
“It seems obvious to me that of the Corporation was having financial cash flow problems, the Board would be grateful in learning that the savings would result in 50% expenditure on the purchase regarding this particular item and at the same time not breaching the tender procedure as claimed by the Board.”
Additionally, Shaw pointed out, the Head Office Tender Committee approved a lower quantity of electrodes to the tune of $3.5M on March 8.
“However, I was accused of splitting the order to prevent going to tender committee which in fact was approved by the tender committee.”
With regards to accusations that he breached procurement guidelines by purchasing small quantities, Shaw explained that small quantities were indeed purchased as an emergency, to meet estates’ needs. The buying of small quantities is a “norm” at GuySuCo, he stated.
Shaw said that his dismissal was not in accordance to procedures which requires him to show cause and allowed him five days to respond.
“None of these procedures were followed, yet despite this, I was still dismissed. It is obvious now that not being able to taint my professionalism, the Board’s only recourse was to get rid of me in this manner.”
The dismissed official also believed that his sacking may have been linked to his opposition to a $200M order which cost more than $9M than it should have, and which was “being advocated” by senior officials.

---

---