Legal Affairs Ministry called to answer for tender irregularities

The Legal Affairs Ministry’s purchase of a telephone system to replace one which had been damaged was yesterday scrutinized by the Public Accounts Committee (PAC) of Parliament and it was revealed that there were several irregularities in its procurement.

Edward Wills

Recently appointed Perma-nent Secretary within the Legal Affairs Ministry Edward Wills and his predecessor Colin Croal were part of a team from the ministry, which appeared before the PAC to give answers on aspects of the 2008 Auditor General’s report. The session was chaired by PNCR-1G MP Ernest Elliot.

PPP/C MP Bibi Shadick noted that the report showed that a replacement telephone system had been acquired at the cost of $424,369 after the previous system acquired for $624,404 was damaged by a power surge. Shadick queried the disparity in prices and asked whether the contract for the first system had been openly tendered. She asked too whether there wasn’t any guarantee for the damaged system or any means of seeking compensation from the Guyana Power and Light Company through the Public Utilities Commission.

In response, Croal said that the contract for acquiring the first system had gone through the National Tender Board. He added that afterward, the system was damaged through a power surge caused by lightning. He said the guarantee on the equipment did not cover damage caused in such circumstances. Following the incident, GT&T, Croal explained, offered a replacement system, which was purchased on credit. The ministry had not cleared its debts with the telephone company, he said. Wills added that since he had been appointed, no permission was granted by the Finance Ministry for the purchase of the system from GT&T. When asked by AFC MP David Patterson who would have facilitated the purchase, Croal identified former permanent secretary Mitra Devi Ali.

Finance Secretary in the Ministry of Finance Neermal Rekha said that procurement of the item was wrong. “My recollection is that this issue was not budgeted for and if agencies want to procure things outside of the budget, something is wrong,” he said adding that “even the Parliament did not approve it.  Now that they have done it, it becomes another issue of an unpaid account of a previous year. So it compounds itself over and over,” he said.  “If we don’t have an item in the budget, we should not buy it. We should live without it until further notice.”

Meanwhile, Shadick noted that according to the Auditor General, the ministry had been purchasing fuel on credit, which was against the Procurement Act. She said that what ministries normally do is to disburse funds to their agencies, which would pay advances to GuyOil. If the advances are not enough to cover the fuel purchased then additional funds are sought from the ministry. “The procurement act does not allow you to purchase on credit,’’ Shadick said.

She also said that it was strange that even though the fuel was purchased on credit, the Auditor General’s report pointed out that amounts totalling $53,668 had been overpaid to the suppliers.  In response, Wills said that orders have since been issued to stop the purchase of fuel on credit. PPP/C MP Dharamkumar Seeraj also stressed that it is important that the fuel purchased is properly recorded in the log books for the vehicles.

Meanwhile, Croal told the PAC that interested persons can now purchase electronic forms of the Laws of Guyana up to 2007 from the Legal Affairs Ministry.  He was at the time being grilled about the $1.291 million that was paid to two individuals for the conversion of the laws to electronic format. The Auditor General’s report had noted that “the contractual agreements or payment vouchers were not presented for audit examination.” Consequently, “the AG’s office was unable to determine the accuracy and validity of the expenditure,” the report said.

In response, Croal said the project to convert the laws of Guyana into electronic form had several phases to it.  He said that the two individuals had updated the electronic laws of Guyana from 2002 to 2007.  He said that the two individuals had been paid through the Finance Ministry but that he was unable to track down a record of the payment. Patterson requested that full details of the project from its inception to its present state be presented to the PAC by the end of August.

The project to convert the laws to an electronic format was steeped in controversy since 2001, when the government awarded the contract to New York-based New Global Consultants Inc. The value of that contract was US$220,500 ($41.4 million).

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