Probe finds administrative weaknesses at Linden utility co-op

By Jeff Trotman

An investigation surrounding a reconditioned tractor bought from Miami, USA, has unearthed discrepancies in the administration of the Linden Utility Services Co-operative Society Limited (LUSCSL).

According to the findings of a committee that investigated alleged irregularities in the procurement of the tractor for LUSCSL last year, the purchasing policy of LUSCSL is clear and yet it was breached.

It was found that while the general manager is responsible for purchases in excess of $500,000; for some inexplicable reason the responsibility of purchasing the tractor was “effectively taken away from the GM and placed in the hands of board members and Concession Manager Mortimer Mingo”.

Mortimer Mingo
Mortimer Mingo

Influenced by grumbling among staff members and other persons associated with the operations of the electricity utility, acting secretary of the entity’s Committee of Management, the late Leon ‘Junior’ Barrett, invited the Supervisory Committee by letter dated 25 February, 2013 “to conduct an investigation on the circumstances surrounding and procedure involved in the purchasing of a tractor for the concession in the year 2012”.

Barrett’s letter requested that the committee submit a report with findings and recommendations to the Committee of Management before its next statutory meeting, which was scheduled for 14 March 2013. Barrett subsequently died in a traffic accident on March 11.

The Supervisory Committee submitted a preliminary report on 8 April 2013 in which concern was expressed “as to whether or not the society’s policy on purchasing procedures were [sic] adhered to” since the committee that conducted the investigation was unable to ascertain when the decision was made by the Management Committee to purchase a tractor.

However, the investigating committee in perusing the minutes of the Management Committee, came upon a reference in which Mingo had reportedly stated under ‘matters arising’ at one of the meetings that the entity was in receipt of a quotation for the sum of $6.4 million for a tractor that was being sourced by management, which was urgent due to the current activity being done in the concession.

In this regard, the investigating committee reported that while Mingo’s reported statement “constitutes a reference by the committee to acquire a tractor it does not in our opinion constitute a decision to purchase”.

The report further states that the vagueness with respect to when a decision, if any, was made to purchase a tractor “is underscored when we note also that the operation plan for 2011 under ‘concession’ refers to a ‘proposal to have capital investment of $11,005,786 for the purchase of one tractor, one wood miser and two chainsaws in order to realise a profit of $12,331,879. However, after carefully examining the practicality of this venture, we are proposing that a sum of $3,000,000 be used to invest in one wood miser and utilise the services of the tractor and that was recently overhauled, to commence harvesting wallaba poles and lumber for 2011.”

From the foregoing quotation, the investigating committee surmised that it is clear that the original proposal was amended to exclude the purchase of a tractor.

The investigation committee further suggested in its report that while a decision, either formal or informal, was made by the Committee of Management to purchase the tractor, “we wish to state that if ‘decisions’ of the Committee of Manage-ment are informally arrived at, particularly if and when those decisions involve large outflows of cash the interest of the society are [sic] placed at risk.”

Mystery
According to the report, LUSCSL received quotations for the price of a tractor from three local companies on 2 September 2011: T Geddes Grant Ltd for a New Holland at $10 million with VAT of $1.6 million; Guyana Tractor and Equipment for a new DT 100 Global Farm Blue Engine Tractor at $9.8 million; and Associated Industries Ltd for a Massey Ferguson at $8 million.

“How Trans Caribbean emerged as a player in the process is something of a mystery,” the report states since “there is no quotation from the entity for the supply of a tractor to LUSCSL ….” The report further states that the LUSCSL administration had in its possession an invoice from Tran Caribbean Int’l of Miami Florida, dated February 28, 2012, for the price of the tractor and shipping it from Miami, amounting to US$30,900 ($6,180,000) – more than six months after quotations were obtained from the local heavy-duty equipment suppliers.

The investigating committee also noted that while the general manager was among two other signatories to the payment voucher, the entity’s procurement officer indicated that at no time was her service requested in the process.

According to the report, the tractor was delivered during the period of the Linden electricity protest, last year, and was received by Mingo, who claimed that his only involvement in the transaction was “clearing the tractor from the wharf and facilitating of duty waiver by the GRA”.

But the investigators state in their report: “If he did not have anything to do with the actual acquisition why would he collect a valuable piece of equipment fully aware that it was not what was ordered. He would have known at the time he was taking delivery of the 290 (4×4) tractor he accepted that it was vastly different from the one (481/491 4×4) which was purchased.”

Police investigation

Among other things, the report of the investigating committee has recommended that consideration should be given to involve the police in a more thorough investigation and that LUSCSL should consider pursuing all legal channels to recover the difference in the price paid and the tractor supplied from Trans Caribbean and Mingo.

The committee also recommended that Mingo should be asked to tender his resignation from the post of Concession Manager and should not be considered for future employment by the society.
While acknowledging that the general manager countersigned certain documents, the investigating committee expressed the view that the general manager was not in charge of the process. The report additionally points out that while there is no documentation on the status of Mingo’s employment, the society’s records indicate that he received payment for his services to the society.

Findings
Among the nine findings of the report is that the investigation committee believes that responsibility for the fiasco rests with Mingo and with the Management Committee, which failed to discharge its responsibilities to the members of the society.

The report further surmised that the LUSCSL Management Committee “has been remiss in discharging its functions and turned a blind eye and even contributed to several serious violations of the procurement policy which had openly taken place,” an “in the opinion of the Supervisory Committee this is not the first instance of serious violation of the society’s policy on purchasing procedures but it must be one of the most costly”.

According to the report: “The Management Committee as a collective or at least, some of its more influential members aided and abetted Mingo’s subterfuge; to all appearances, Trans Caribbean is not prepared to entertain the society’s demands for a reduction in the price paid vis-à-vis the type of tractor supplied.”

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