AG recommends police probe, charges for over $170 M spent on lawyers by APNU+AFC Govt.-Special audit report

Jan 04, 2021 News

Kaieteur News- Auditor General, (AG) Deodat Sharma has recommended a police probe and charges where necessary for breach of the procurement procedures by officers attached to the Attorney General‘s Chambers for over $170 M in retainer (legal fee) agreements signed under the previous A Partnership for National Unity +Alliance For Change (APNU+AFC) government.

The recommendations follow a special audit of the retainer agreements which was requested by Attorney General and Minister of Legal Affairs, Anil Nandlall.

Attorney General and Minister of Legal Affairs, Anil Nandlall.

According to the report by the Audit Office, the inspection covered the period May 2015 to 31 August 2020 and focused on all transactions related to legal fees paid to 26 local and foreign attorneys-at-law/law firms/agency under the APNU+AFC administration.

The auditors examined records pertinent to the audit, which included Tender Board minutes and approvals, payment vouchers, contracts, and its supporting documents for retaining lawyers for a number of cases including the No Confidence Vote cases brought by the previous government and the matters filed to challenge the outcome of the March 2020 elections.

In a detailed compilation of the matters, the auditors noted that the Ministry of Legal Affairs (MOLA) in its contract registers for the period May 2015 to August 2020 had 71 contracts which were awarded to 26 attorneys-at-law/law firms/agency totaling $170.828M.

According to the report, the MOLA’s current appropriation accounts for the years 2015 to August 2020, amounts totalling $112.200M which was expended on employment cost under the State Solicitor, whilst amounts totalling $166.474M were expended as retainer agreement for 22 attorneys-at-law/law firms.

The document specified that State Solicitor is responsible for filing all pleadings in action instituted by the State and against the State.

Auditor General: Deodat Sharma.

Additionally, it was pointed out that based on the documents examined, there was no evidence to conclude that these contracts were publicly advertised, which is in breach of Sections 25. (1) And 10(1) of the Procurement Act of 2003.
The Procurement Act 2003 states that “Subject to subsection (2), public tendering is mandatory. For such tendering an invitation to tender or to prequalify, as applicable, is mandatory” and “the procuring entity shall maintain a record of the procurement proceedings including the means used to solicit suppliers or contractors and a record of any such advertisements”.
Further, the audit report stated that direct contracting/single source method was used to award these contracts.

“…The guide to the Public Procurement Procedures, states that where contracts are to be awarded regularly, or are to be renewed within a specified period of time, the contract value is established on the basis of the actual aggregate cost of similar contracts or services awarded over the previous twelve months or financial year, adjusted where possible for anticipated changes in the value or quantity,” the report added.

It was also observed that cases where the attorney/firm would have represented the MOLA at more than one Court hearings, approval was sought from Ministerial Tender Board (MTB) and later on National Procurement and Tender Administration Board NPTAB for the additional hearing and vice versa.

Added to this, during the period under review, it was observed by the auditors that withholding tax was deducted for contracts exceeding $500,000. The rate for withholding tax was charged at two percent for companies who are housed locally and 15 percent for companies who operated out of the Country. Audit scrutiny revealed amounts totalling only $10.536M were paid to GRA in respect of the 71 contracts that were awarded.

As a result, the Audit Office recommended that the MOLA appropriate disciplinary action for any culpable Officer(s); an in depth probe by the Guyana Police Force followed by the charges where necessary; and full compliance with the Procurement Act 2003 with respect of awarding of contracts.