Public Infrastructure Ministry overpaid millions for asphalt due to poor record keeping

Public Infrastructure Ministry overpaid millions for asphalt due to poor record keeping – audit report

Jan 04, 2021 News

Kaieteur News- A lack of proper internal controls within the then Public Infrastructure Ministry resulted in millions being overpaid to the state-run Garden of Eden Asphalt Plant.
Findings from the special audit conducted at the facility following allegations of an ongoing racket there revealed that the Public Infrastructure Ministry under the purview of then minister David Patterson purchased asphalt through a prepayment system arrangement.

Audit team leader, Chartered Accountant Chateram Ramdihal.

The report stated that the sums of G$305,170,110 and G$526,180,840 were paid for 2018 and 2019 respectively.
The audit team, led by Chartered Accountant, Chateram Ramdihal pointed out that they were not provided with the relevant information to determine the utilisation and balance of the asphalt paid for in advance.

“We were not provided with any reconciliation to indicate tracking of the amount paid for and the amount collected,” the team noted in the report.
Further on, the team noted too that they were unable to determine whether the Public Infrastructure Ministry received all the asphalt paid for. Also unclear was whether asphalt being sold to other customers was charged to the Ministry’s account. Moreover, examinations conducted on a sample of payments made against asphalt deliver for a string of projects revealed “an adverse variance” of 30.64 tonnes.
“The Ministry overpaid for asphalt to the approximate value of One Million and Forty-One Thousand, Seven Hundred and Sixty Guyana Dollars (G$1,041,760),” the report outlined.
It was due to a lack of reconciliation,` or any other pertinent information for that matter, the team was unable to determine whether additional amounts paid for was utilised by the Ministry or whether asphalt supplied to customers were being billed to the Ministry’s account.
It was alleged that contractors handed government projects were required to source their asphalt from the Garden of Eden Plant in order to facilitate an alleged scam where huge discounts were said to be given to contractors.
“What happened is that there is a special department in the ministry that conducts road repairs and other maintenance works. They would order a certain amount from the plant to be billed to the ministry. They, however, collect less. The difference is what is sold at discount to contractors,” one contractor disclosed to this paper.
While the team leader recommended that the Ministry must put systems in place to reconcile payment request with delivery notes, he outlined too, that the agency’s management be reprimanded for their inability to properly control and effectively manage the facility.
“We must determine culpability and appropriate penalty to be meted out to those involved. As mentioned, due to lack of internal controls, we were unable to determine whether the allegation is accurate. However, based on observations and lack of internal controls the allegation is possible,” Ramdihal stated.
The aforementioned racket allegations came to the fore after contractors broke their silence on it.