$$M in overpayments to contractors in Region One – AG’s Report

Nov 09, 2012 News

The Auditor General’s Report 2011 revealed that a number of contractors executing roads, bridges and revetment projects in Region One were overpaid, even though the projects remain incomplete or in some cases, never began.
In several instances, no effort was made by the Regional Administration to recover the monies and no sanctions made against the contractors.
According to the Auditor General, the sum of $72M was allocated for Public Works in Region One. A Contingencies Fund Advance Warrant of $8M was received, bringing the total revised allocation to $80M. And, as at December 31, 2011, amounts totaling $75.029M were expended.
The Auditor General’s Report highlighted millions of dollars in overpayments to contractors, poor monitoring of projects and inadequate records-keeping in the Region.
A contract totaling $18.949M was awarded for the construction of a bridge and revetment from Oronoque Community to Port Kaituma Water Front. The report said that physical verification of the project revealed that works were incomplete and overpayments totaling $8.317M were made to the contractor.
Apparently, the contract ended on August 31, 2011, but no action was taken by the Region against the contractor in relation to liquidated damages that would have accrued to $1.895M as of December 9, 2011.
In response to this project, the Head of the Budget Agency said that works were still ongoing under the contract, and measures will be taken to improve documentation. Nonetheless, the Budget Agency Head was unable to provide similar responses for the other projects.
Another project executed that saw overpayment was the construction of gravel surface road from CoCo to Hymaracabra. A total of $12.997M was expended on the project. Though works were completed under this project, the contractor, according to the Auditor General, received $1.018M in overpayment.
The report also disclosed that a contractor was awarded a contract totaling $9.363M to construct a gravel surface road at 11 Miles Manawarin. A 40 percent advance, instead of the contract-stipulated 30 percent, was given to the contractor. Of the $3.745M advance to the contractor, works completed by the contractor were valued at $1.062M, hence an overpayment of $2.683M.
Meanwhile, a contract for the empoldering of 250 acres of farmland at Waini was awarded in the sum of $7.878M. The report stated that as at December 31, 2011, an advance payment of $2.757M was made to the contractor, but a physical verification showed that no work was done.
The advance payment represents 35 percent of the contract sum, while the contract had stipulated that the advance payment should have been 10 percent.
In fact, the contractual completion date for the works expired since October 19, 2011, and no approved extension of time was noted. The report further stated that based on the completion date, the maximum liquidated damages totaling $787,800 would have accrued since January 27 this year. But, no action has been taken against the contractor.

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$$M in overpayments to contractors in Region One – AG’s Report

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