2015-2017 audits pick up lax systems controls at DHB

Dec 16, 2021 News

Kaieteur News – Financial audits into the Demerara Harbour Bridge (DHB) Corporation for the years 2015, 2016, and 2017 revealed that the bridge company failed to maintain records as it relates to materials and expenditure to the tune of billions.

The Demerara Harbour Bridge (DHB).

According to the audit reports which were laid in the National Assembly on Monday, the DHB company failed to maintain production books at the Asphalt Plant as well as proper contractual arrangement from the years 2015- 2017. Among other things, the audit reports pointed to the absence of records to show the dates and times of production, production output and the quantity of various raw material used in production of asphalt for those years .
In 2015, the auditors found that no records were available to verify raw materials used in production. The audit revealed that ‘the only paper trail’ maintained were delivery slips which were used to record sales As a result of the missing records, the auditors were unable to confirm raw materials used in production of asphalt, how abnormal loss correlated with sales and carry out alternative audit procedures.
Consequently, the auditors could not satisfy themselves that the balance of $1,150,037, 000 and $188, 475,000 shown in the financial statement as income and raw materials costs (used in production) respectively for the Asphalt Plant are materially correct.
The report, which bore the signature of Auditor General, Deodat Sharma, noted further in that same year, advances to Courtney Benn Contracting Services Limited for Services amounted to $366,704,752 as of December, 31, 2015.
The audit noted that though the sum included in the balance is for unserviced contracts coming forward from 2012 it was reduced to $158,485,446 as of 30, April 2018.
Further, the report noted that the reduced sum placed the corporation at a credit risk of $158, 485, 446, if the supplier fails to honour the contract.
The audit also revealed that the Transport and Harbours Department owed the Corporation $28, 078, 292 since 2013 for services provided for the Parika Link Bridge. In 2015, this balance was presented to the Board for consideration to be written off as bad debts since the amounts may not be recovered. This balance still remains in the financial statement which has resulted in assets being overstated by the amount of $28, 385,116.
Similar occurrences were outlined in the financial audit reports for the years, 2016 and 2017. According to the report, the corporation did not maintain adequate records and controls over the quantity of various raw materials used in the production of asphalt in that period either.
The auditors noted that no records were available for verification of the raw materials used in the production process, production output, abnormal loss and sales.
“ In the absence of records to confirm the accuracy and completeness of raw materials used in the production…I was unable to satisfy myself that the balance of $1, 677,139,000 and $790, 712, 000 shown in the financial statement as income and raw material costs (used in production) respectively, for the Asphalt Plant are materially correct,” the auditor stated.
Meanwhile, the report noted that the sum advanced to Courtney Benn Contracting Services Limited, which amounted to $258,119, 014 continued to place the corporation at a credit risk. Additionally, the auditors reported that in 2017, they were unable to verify that the corporation balance of $980,475,000 and $494,466,000 shown in financial statements as income and raw material costs used in production respectively, for the asphalt plant are materially correct.
According to the audit, the DHB Corporation did not maintain adequate records and controls over the quantity of various raw materials used in the production of asphalt for that period as well. “No other records were available to us to verify raw materials used in the production process, production output, abnormal loss and sales. In the absence of records, I was unable to confirm the accuracy and completeness of raw materials used in the production for the asphalt plant are materially correct,” the auditor added.
Further, he noted that advances to Courntney Benn Contracting services to the tune of $179,882,4446 at December 31 , 2017 was reduced to $139,252,114, placing the DHB company at credit risk of $139, 252, 114 if the supplier failed to honour the contracts.