Region Four audit reveals massive fraud, corruption

Apr 11, 2010 News

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…minutes forged to facilitate purchases, greens stall listed as goods supplier

The 2008 Auditor General’s Report of the country’s accounts has cited numerous glaring cases of overpayments, deliberate procurement, conflict of interests, and accounting lapses under the watch of suspended Regional Executive Officer, Shafdar Ali.
The report, which promised a separate report into a special investigation into Region Four’s accounts, listed several cases which spoke of widespread breaches in the system during 2008.
Ali, for whom an arrest warrant was issued, had turned himself in to police, was detained and then placed on bail.
While to date he has not been charged for breaches, which overtime cost the country millions, the report was replete with instances of breaches.
In 2008, $53.5M in fuel and lubricants were purchased but in August last year, checks revealed over $300,000 in gasoline were short. Stock ledgers were not up-to-date and state auditors were unable to verify same.
During the special investigation, purchase records revealed breaches in procurement procedures, creation of a supplier to provide goods to the Regional Administration, conflict of interest, failure of an experienced person to be appointed to the position of Expediter, lack of monitoring of purchases and store keeping.
One supplier
Almost $7M was paid to one supplier who had no history of doing business with the Administration and who sold from janitorial supplies, dietary supplements, curtains and refreshments to Diamond Hospital, the REO’s office, and other health departments of the region.
That supplier, it was discovered, was the spouse of the Driver/Expediter who confirmed this when he was dismissed.
The business was only registered in January 2008 to supply janitorial supplies with the address at Non Pareil, being the same place where the Expediter lives.
Quotations provided gave an address as a Stabroek Market stall which sells greens and fruits.
There were no evidence that the supplier had a history of supplying anything anywhere, the report said. Almost $5M was paid for janitorial supplies in 2008.
Quotations, done to satisfy a three-quote procurement method, were found to be falsified.
There was even more to come. According to the Auditor General, there was no evidence that the Store Keeper actually received any of the items and the quotations and not the goods were used to record receipts.
While the Expediter was dismissed in January 2009, the situation continued for the Region even when the “Revenue Runner” was assigned duties in June 2008. A particular supplier was paid $21M between July and December 2009.
This supplier started off providing janitorial items, then raincoats, fridges, office furniture, stationery, electrical items and paint, among other things.
Prior to July 2009, other suppliers were used. After that point, this person became the main supplier.
While the supplier was registered to carry out wholesale and retail business, a check at the business address revealed it operated as a liquor restaurant and wash bay.
Cheques payable to the supplier were not crossed as is the custom and the supplier used a letter from GECOM to encash the cheques.
Again, quotations from one place at Enmore, were discovered to be forged.
Forged minutes
Between July and December 2009, the Auditor General said that there were almost 30 cases of purchases amounting to $5M, which clearly pointed to contract splitting. These were for the fridges, freezers, beverages, CD players, dietary items and a range of other items. Any purchases above $250,000 have to be approved by the Regional Tender Board.
The report said that despite requests, several payment vouchers were not provided for at the time of investigation, despite several requests. For vouchers provided, $2.7M was not posted by the Store Keeper as being received. These included purchases of 30 wheelbarrows, three water dispensers, tyres and electrical items.
Another glaring case was the forgery of the minutes of a supposed meeting of the Regional Tender Board where a contract for 44 tyres to the tune of $1.7M was awarded. That meeting never happened and the minutes were fabricated to necessitate the purchases.
Examinations of documents also found the contract was split into 10 different purchases to avoid having to go the Regional Tender Board.
There were other instances of payments being made to a supplier for four CD players totaling $380,000 and furniture valuing $231,000 but the said supplier never delivered.
According to the report, the supplier claimed that the Expediter requested quotations, paid the cheques then took the cash.
A physical inspection revealed that the CD players were installed in vehicles but three of them had no speakers. The said CD players were being sold at an average of $30,000 but the region ended up paying $95,000 each.
Overpayments
Meanwhile, in the capital expenditure section, more than $3.9M was overpaid for works and as provisional sums on the Kuru Kururu Primary School, Administration Buildings in Friendship, Cove and John, and South Lancaster have not been recovered although the Head of Budget Agency of the Region said that the contractors were written to.
In the Drainage and Irrigation sector, Region Four, during 2008, could not explain why contractors with the lowest and most competitive bids were not awarded contracts to the tune of $30M.
These included rehabilitation of main canals at Clonbrook, Two Friends, Buxton and Beterverwagting and revetment works at Hope and Cane Grove.
Monies were paid over at the end of the year but there were no reasons given by the region why some of the bids which were lower or appeared to have met the requirements were not given the contracts.
Six intercom communication sets for health facilities along the Linden Highway were also purchased in 2008 to the tune of $3M but had not at the time of the inspections been installed.

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