– after flagging huge financial wastage
Former materials manager of the Guyana Sugar Corporation (GuySuCo) yesterday said he was fired by the company because he produced a damning report which exposed weaknesses that were costing the corporation millions of dollars.
Aasrodeen Shaw, who was fired on Monday for allegedly breaching the corporation’s procurement and procedural policy in the purchasing of electrodes, yesterday also accused a senior officer of the corporation of implementing procedures in an attempt to instil “inefficiencies that would occur within the department under my management,” following his report.
Shaw, in a detailed response to his dismissal, deemed the meeting he was summoned to on Monday to answer the charges as a “farce,” since he was not informed of the allegations levelled and when he requested time to submit a response he was given a mere 15 minutes. Shaw, who has since indicated that he would be taking the corporation to court, said that in the six months he has been at the helm of the department, he saved the corporation over $20 million in contract negotiations. “My performance and integrity were never questioned until March 15, 2010 at 11.30 am when I was summoned to a meeting by the board outlining alleged accusations of breaching procurement procedures,” Shaw said.
It was four months into his employment that Shaw produced a report, which in addition to identifying weaknesses made recommendations to correct same. The report was submitted to senior personnel of the corporation. Last January, Shaw discussed the report with his immediate boss, who reportedly criticised it and halted the implementation of the recommendations. “Recently it was brought to my attention, that the structural and operational recommendations conflicted with the current structure that was created to seamlessly encourage malpractice and efforts to defraud the corporation. Moreover, these recommendations were obviously not in the best interest of upper management,” Shaw alleged.
Meanwhile, detailing what would have caused him to be summoned to a meeting last Monday, Shaw said that he had received a document in January that requested 40,000 1bs of electrodes, but he refused to process the tender and instead sought to get a revised (lower) amount needed by the estate, which was half the amount that was being requested. “It seems obvious to me that if the corporation was having financial cash flow problems, the board would be grateful in learning that the savings would result in 50% expenditure on the purchase regarding this particular item and at the same time not breaching the tender procedure, as claimed by the board.”
According to Shaw the reason for his decision was based on the fact that for the last two years the corporation never bought more than 15,000 1bs electrodes at any one time. This is because electrodes require special handling (a heated room, which GuySuCo does not have) and will deteriorate in improper storage. Also, Shaw said, the theft rate at the estate level for electrodes is very high, due to the ease of selling the item on the market.
Further, purchasing electrodes in bulk will result in a loss to the corporation because of unnecessary expenditure at a time of already poor cash flows due to inclement weather among other issues.
‘Praise nor defame’
According to Shaw, who said he is a member three professional regulatory procurement associations in Canada and the UK, his report was not meant to “praise or defame” anyone but rather to “identify the bottlenecks in the system and to put procedures in place to prevent the recurrence. The report highlighted weaknesses in the area of employees especially, Procurement, Inventory Management, Storage, IT system and Policies and Procedures,” he explained
The report also pointed out that a correct physical inventory of items stored across the industry was not done since 1998, when it was done by Shaw himself. He said an attempt was made last year but it was impossible because the IT system had changed. “The book value of the inventory is approximately $4.3 billion, of which more than half of the items are obsolete, which highlighted a weak financial system….”
Shaw added that following discussion of his report, a senior official implemented procedures that he (Shaw) believed were to instil efficiencies under his management. Firstly, the official requested that all purchase orders must be countersigned by him before being dispatched to the suppliers – a system that would create further delays. “I took the initiative to save the corporation money by not placing the tender and later re-tendering for half the amount which also produced additional savings due to lower prices. The total value of over $3.5 million was approved by the Head Office Tender Committee on March 08, 2010. However, I was accused of splitting the order to prevent going to the tender committee which, in fact was approved by the tender committee,” Shaw said. He noted that during the time of the re-tender, a small amount was purchased to meet the estates’ immediate needs at a lower price rather than the tender price–a decision that saw him being accused of buying small quantities at a higher price.
Secondly, Shaw said the official instructed him to send all evaluation of factory items to the head of the Factory Services for his recommendation, although a technical advisor existed in the materials department. “Approximately 90% of these items are purchased on a monthly basis with the same specification. I do agree that some items of a highly technical nature be reviewed by the GM Factory Services but not all,” he pointed out.
Shaw said that the new system was being implemented primarily for the official to collaborate with his colleagues to recommend decisions that will promote corruption; recommend items of poor quality from selected suppliers; and to delay the procurement process thereby creating inefficiencies in the materials department.
Meanwhile, Shaw revealed that no disciplinary action was taken against employees who were found breaching the procurement procedures by an audit that was done in July of last year and the pending decision created “unrest, uneasiness, low morale and unwillingness to work” by the guilty parties. “To further compound the situation, another audit was requested in February 2010 although in the employees’ eyes the previous one was still pending,” he said.
According to Shaw, the current process is not only inefficient and ineffective but it also reduces the productivity tremendously. “The real inside view of the process will reflect a lengthy procurement process, poor storage of spares, wastage, theft and obsolete items valuing over $2 billion being overlooked. It is evident that the [senior official] mismanaged inventory, creating increased losses, while the corporation is suffering from cash flow issues. As such, my recommendations as mentioned were directed at correcting these shortcomings but were subsequently suspended.”
He said the position he held reinforced and ensured honest practices when contracting suppliers that targeted the elimination of corruption. “This position earned me a side opposite of the ‘big boys’ and viewed negatively within the organisation, especially amongst certain levels of management,” he said.
‘Rowdy playground’
Giving details into Monday’s meeting, Shaw said that he was subjected to an “interrogation” that was clearly “prematurely thought-out and attended to by certain board members,” whom he said already made a decision on the issue without understanding the reasons for his decisions. He described the tone of the meeting as a “rowdy playground” and perfect opportunity to manipulate the facts and overrule any logical reasoning. As a result, he argued that the board succeeded in portraying his decision as a financial disadvantage and “fuelling the already corrupt process” which his recommendations intended to eliminate.
Shaw stated that prior to the meeting he received neither notice nor briefing regarding the alleged accusations. While he requested a day to prepare a detailed response he was allowed 15 minutes. “The board accepted the reasons as being valid but goes on to say that there was a draw down policy that was made available by one supplier which, I was not aware of, and furthermore if I proceeded with this course of action, it would have resulted in a level are: the issuing of ‘show cause’ notice by his immediate boss with five days to respond, a hearing and a final decision by the Chief Executive Officer. “None of these procedures were followed, yet despite this, I was still dismissed. It is obvious now that not being able to taint my professionalism, the board’s only recourse was to get rid of me in this matter,” he stated.
Shaw had held the same position in 1997 prior to migrating to Canada and had reapplied following an advertisement and was rehired on September 7 of last year. “Based on my previously held managerial positions in Canada and Guyana, I was highly qualified to assume this position and leverage my eleven years of professional experience in the field of procurement with the Materials Management Department (MMD) and the corporation. Moreover, provide critical skills and specialised knowledge of procurement that the corporation currently lacks,” he explained.
