Latest update November 5th, 2024 1:00 AM
Public Works Ministry requests audit into MARAD following discovery of irregularities
Kaieteur News – The Minister of Public Works Juan Edghill has requested the Auditor General (AG) Deodat Sharma, conduct a forensic audit into the Marine Administration Department (MARAD) following recent developments of irregularities.
In the February 8 letter to Sharma, Minister Edghill pointed out that those recent developments at MARAD had prompted him to ask the Public Works Ministry internal auditor to conduct an initial assessment.
Findings from that report, which was attached to the letter dispatched to Sharma, revealed that between 2015 and 2020, MARAD had spent $3.84 billion for the “Procurement of Spares & Equipment and Docking & Rehabilitation of Vessels.”
It went on to say that Courtney Benn Contracting Services and Brenco Shipping Company, a subsidiary of Courtney Benn, had been paid $3.55 billion of that amount, which represents 92% of the total payments.
It added that mobilization advances as high as 95% were paid by MARAD on contract for works to vessels and procurement of spares, while reminding that NPTAB’s standard bidding document pegs mobilization advances between 15% and 30%, depending on the geographical location.
The findings further stated that based on the advice of the Public Accounts Committee (PAC) via meeting held with the Ministry of Public Works on January 18, 2021, it was stated that Mobilization Advances above the 30% ceiling were not allowed.
In addition, the report pointed that Courtney Benn and Brenco Shipping contracts and payments did not have relevant supporting documents attached; no Bill of Quantities (BOQ’s) were provided for the contracts, even though requests were made during the audit.
Further, it stated that a contract valued at $400,204,530 million for ‘Spares and Equipment was awarded to Brenco Shipping and stated 80% mobilization advance; however, the entire amount was paid upon signing the contract. No Bond was provided for scrutiny, it noted, while adding that verification of work progress by MARAD had been executed prior to payments made to contractors.
“Physical verification of four vessels at the Mazaruni Dock Yard for which $675 million in contracts, for the period under audit, was paid to Courtney Benn & Brenco Shipping for the supply of spares and rehabilitation works, which it indicated had not been completed. Again, the absence of BOQs makes verification of works difficult,” the report explained.
Once payment schedule follows the contract terms, the report pointed out that more monies would be paid in comparison to works completed at the respective stage. As an example, it referenced contract for Docking & Rehabilitation for Baramani which states that 80% – 50% advance + 30% second payment – of contract sum would be paid at the completion of 50% works.
It further added that during the period under audit, the positions of Chairman of the Maritime Administration Advisory Board and the Director General of MARAD were filled by the same person, which it indicated raised conflict of interest concerns, since that individual had ultimate authority.
It is against this that the report stated, “Based on MARAD Board Minutes submitted for audit scrutiny Ms. Rogers – Director General was appointed Chairman of MARAD Advisory Board during board meeting held Jun 6, 2016. Minutes for 14 Board meetings were presented for 2016 – 2019; however, at none of those meetings were contracts presented for Board deliberation or approval. This reinforces the risk of having one person fill these two critical positions”
The report further added that no physical verification of stores, coupled with missing BOQs raises serious accountability concerns for the millions spent on spares and equipment.
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