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Sole sourcing prevailed at MMA-ADA

Jun 08, 2016 News

– audit shows

A Forensic Audit into the Mahaica Mahaicony Abary – Agricultural Development Authority (MMA-ADA), during the period – January 1, 2012 to May 31, 2015, has revealed several irregularities that transpired within the agency including contracts for the procurement of goods and services over $1M not being placed for tender.
According to the auditor – Ramesh Lal, the Managing Partner (TSD Lal & Co.), contracts for the procurement of goods and services over one million dollars were not being approved by the Board of Directors, neither were they sent to the Ministry of Finance for tender board approval. Further, contracts under $1M were not being awarded based on a three quote system of goods and services.
The auditor pointed out that there was no system for public tendering or requesting quotes from suppliers for works carried out for the Authority. These works were awarded on sole sourcing basis, whereby a few suppliers were awarded large contracts.
The auditor stated that instances were noted where sole sourcing occurred and it is possible that better quality at cheaper prices could have been obtained if contracts were advertised for tender.
Under the heading “implication”, the auditor stated, “This revealed the possibility of collusion and/or misappropriation of the Authority’s funds. Additionally, it affects the Authority’s ability to achieve value for money”
The auditor recommended that the guidelines for the procurement of goods and services should be followed.
Management, did not justify the means by which sole sourcing was implemented. In fact, they stated, “We accept the findings and recommendations were put in place effective July 2015.”
The auditor also found that many payments were based on amounts requested by departmental heads and no invoices or quotations in support of such payments. Also, purchases were made at the discretion of departmental heads and may not have been based on value for money principle – the three quote system.
Under the heading “implication” the auditor stated that this action may lead to items not being purchased in an economic manner and hence, at the expense of the Authority.
The auditor recommended that the Authority should request quotations from various suppliers in order to ensure that supplies are procured in an economical way. Also, all payments should be supported by invoices.
He also noted that a list of approved suppliers was not in place and the absence of these controls would increase the probability of purchases not being made in the best interest of MMA-ADA.
In this regard, the Authority should establish an approved list of suppliers to procure items, the auditor stated.
Management has agreed to set the implement the recommendations put forth by the auditor.

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