Region 10 lapsing in recovering money from errant contractors

Officials from the Region 10 Regional Democratic Council (RDC) were given a failing grade when they appeared before the Public Accounts Committee (PAC) of Parliament on Monday to explain multi-million dollar overpayments to contractors cited in the Auditor General’s 2010 Report.

Committee members were not at all impressed by the fact that each of the 13 discrepancies cited by the Auditor General’s Office for scrutiny during Monday’s meeting involved overpayments of varying natures, primarily to contractors for incomplete and/or substandard works.

Representing the RDC was a five-person team, headed by Regional Executive Officer (REO) Yolanda Hilliman.

According to the Auditor General’s report, chief among the transgressions were overpayments totalling $14.583M, which were made to contractors in respect to sixteen projects. When asked what efforts were being made to recoup these funds, Hilliman explained that collection efforts on several projects were moving very slowly for several reasons.

On one of the projects, the Auditor General’s Office found that at the time of physical verification the contractor was overpaid by $4.628M for extension of the road from Farm to Market Road, West Watooka. This raised eyebrows and prompted questions as to why payment had been made before the completion of works.

Yolanda Hilliman
Yolanda Hilliman

PPP/C MP Gail Teixeira asked who “signed off” on the road works, since this person is ultimately the one who should have verified the works, before approving payment. APNU MP Jaipaul Sharma also echoed the call for the names of the engineers who signed off on and certified the work, which turned out in several instances to be faulty.

When asked what progress had been made in recouping monies paid for those works, Hilliman explained that the contractor has since died, suggesting that there was no other way of recouping the sums.

Teixeira rejected the explanation as reasonable cause to give up the pursuit of collecting the funds. She explained that it was the individual that had died and not the company. As a matter of fact, it was stated that the contracting company is currently engaged in other works around Guyana. She suggested that the NDC explore what measures could be taken to recoup the sums owed to them. She said that approaching the courts or sending lawyers’ letters should also be options since it is imperative that rapid action be taken to secure funds owed to the state.

In another instance, attempts to carry out a physical verification to drains at West Watooka were unsuccessful, since the officers designated to verify whether to works were actually been done were unable to find the structure. As a result, the entire contract sum ($7.194M) was deemed as an overpayment.

According to the REO, the contractor had revisited that project site and had executed “corrective works.” These works, however, were not done to specification, and have not been completed thus far, despite several commitments by the contractor to do so.

Another project was the construction of revetment and erosion control structures at Fox Road Hill Foot, whose verification revealed that the contractor had been overpaid by $220,590. In its defence, the RDC stated that it has tried contacting the contractor, who does not reside in the region, but he is yet to respond.

Teixeira once again refused to accept the explanation as an excuse as to why the money could not be recovered, and suggested the agency approach the Guyana Elections Commission to acquire his address and other necessary information. She again stressed the evident need of the RDC to consider legal action against the      individual who, from all indications, is refusing to refund the state’s money. All in all, not a single dollar of the $14.583M has been recovered.

There was also a separate set of projects, for which overpayments totaling $5.640M were made to contractors. However, in this instance the RDC did report that it was able to recover amounts totaling $2.113M. Some contractors also returned to sites where unsatisfactory work was done and carried out corrective works.

In yet another series of projects, the Auditor General’s Office reported that the RDC was still to recover overpayments totaling $4.468M made to contractors in respect to nine contracts for the years 2005 to 2009. However, this amount was refuted by the RDC, which admitted to having overpayments outstanding, but said it was nowhere near what was being suggested by the Audit Report.

In 2005 and 2006, in particular, the RDC stated that the flagged projects—Rehabilitation to Wisroc Health Post and Rehabilitation of a concrete drain at Amelia’s Ward—had been revisited with the Audit Office’s Engineer and personnel from the Works Department.

It also argued that as it relates to the rehabilitation of Thomas Street, Kara Kara, an overpayment of $888,272 was made instead of the $2.364M suggested by the Audit Office. The RDC claimed that of the amount, it has been able to recoup $819,933, leaving a balance of $68,399 outstanding. It also said that it was able to collect outstanding sums in at least one other instance, while corrective works have been carried out on several of the projects that were deemed incomplete or substandard.
The RDC also requested that a team from the Audit Office revisit the projects alluded to so as to verify the claims being made.

Despite these developments, the consensus of the committee was that the instances of overpayments were intolerable. PAC Chairman Carl Greenidge, in particular, described the volume of overpayments as overwhelming.

He said that in cases where overpayments were confirmed to have been made, the RDC’s engineers should have been able to point to errors and incomplete works wherever they existed, which would have prevented payment being made for unsatisfactory work.
MP Sharma suggested that the full sums may have been paid by the agency in an effort to exhaust sums it had in its possession as opposed to returning them to the consolidated fund at the end of the year.

PPP/C MP Manzoor Nadir said that this was unacceptable and highlighted that there are provisions for “roll over” projects, which the RDC could have applied for to retain the required sums to pay for ongoing projects. He suggested that the REO become familiar with the processes and utilise them, as opposed to making further overpayments.

When Sharma asked if any of the defaulting contractors had been awarded additional contracts to do work for Region 10, Hilliman responded in the affirmative. She explained that to her knowledge, the REO does not have the authority to withhold contracts from bidders, despite the unfinished and unsatisfactory nature of some of their work.

Teixeira said that while this may be the case, the selection process does have provisions for awarding contractions based on a contractor’s “track record.” She also urged the REO to take better care in the verification process of projects to ensure that these mistakes are not repeated.

Hilliman said that plans are already in the works to mitigate the issue. She explained that on-site Clerk Officers have been commissioned by the RDC to monitor works being executed on the region’s various projects.