Region 9 REOs take heat for millions overpaid to contractors

Region 9 administration officials were yesterday blasted by members of the Public Accounts Committee (PAC) over findings in the Auditor General’s 2010 and 2011 reports that they had made overpayments to the sum of approximately of $18.5 million over several years.

As the committee convened to consider discrepancies cited in the Auditor General’s 2010 and 2011 reports on the region, Claire Singh, the Region Nine Regional Executive Officer (REO), and two former REOs, including Ronald Harsawack, led the team which attempted to address the committee’s concerns in relation to the discrepancies.

In the 2010 report on the region, the Auditor General stated that a total of $364,000 had been paid to contractors in 2007 for the rehabilitation of the Amerindian Hostel in Lethem, while $1,028,000 had been paid out in 2009 for a series of works, including the construction of the Arapaima Nursery School, Central Rupununi, and the Rehabilitation of Macaw Bridge in the same area.

Ronald Harsawack
Ronald Harsawack

In the case of the overpayment in 2007, the region, in its response to the Auditor General’s office, said that the contractor had been written to alert him that he had been overpaid and for efforts to be made to reimburse the amounts. However, to date the amounts have not yet been recouped.

As a result, the instances of overpayments were brought up again in the Auditor General’s 2011 report, accompanied by another instance of overpayment totalling $81,000. The Region 9 officials came under fire from several members of the committee who were extremely critical of the inefficient management of their finances in this regard. The members were also not impressed with the effort made this far to recoup the overpaid sums.

In its 2010 report, the Auditor General’s Office also noted an instance where the region had failed to recoup $9,370,000 made to contactors from 2005 to 2009. Asked what efforts had been made to the recoup the sums, the region again indicated that letters had been written to the contractors who had not yet responded.

Nevertheless, the Auditor General’s 2011 report reflected the region was able to recoup sums overpaid in 2005 and 2006 which amounted to $4,531,000. Overpayments totalling $4,839,000, however, are still outstanding.

Bibi Shadick
Bibi Shadick

Other significant instances of overpayment include amounts totaling $2.2 million, paid in 2010 for the construction of a road in Lethem which was completed long after the contractual date, and amounts totalling $2.4 million made to a contractor for the upgrading of a road in Deep South, Rupununi.

Questioning by PPP/C MP Bibi Shadick brought to light the fact that some of the very contractors who had been overpaid, and who had not made any attempts to repay, had been given additional contracts.

Asked why this was being done, Singh said the region has a limited amount of contractors, insinuating that the regional administration had little choice but to enter into additional contracts with contractors who have not yet repaid the amounts they had been overpaid. Singh also said that she did not want to just take money from the contractors without their consent.

The answer provided by the REO was so provoking that the Committee’s Chairman, APNU Shadow Minister of Finance Carl Greenidge was prompted to ask Local Government Permanent Secretary (PS) Colin Croal what the ministry was doing to curb the issue of overpayment to contractors.

Croal, who admitted that the overpayments could not be defended, indicated that they were exploring using legal methods to recoup sums from contractors who had not repaid the excesses that have been given to them.

PPP/C Chief Whip and MP Gail Teixeira on the other had questioned Croal’s suggestion, noting that it would have been the region’s officials who would have signed off on the contractors’ work as having been completed satisfactorily.

The contractors were not the cause for overpayments, insisted Teixeira, who instead said that it is the region that is culpable in all of these instances. Teixeira said that what the region needs to do is follow the existing laws which govern the awarding of contractors, and the procedures which stipulate under what conditions payments are to be made.
Regional Engineers and the Clerk of Works tasked with checking these projects, she said, need to check works completed by contractors to ensure that they are actually completed, and that the completed works are not substandard before giving the okay for payment to be made. She also said that the region’s officers should start imposing financial penalties, as is allowed by contractual provisions, in cases where contractors fail to complete projects by the stipulated time.

APNU MP Volda Lawrence also tore into the region’s representatives, who seemed to have a problem with this issue. Overpay-ments, she said, have become a chronic issue where Region 9 is concerned and she asked what, if anything, was going to be done to address the problem. Lawrence said that she preferred Croal provide an answer to the question since the current and former Region 9 REOs have obviously been unable to make any headway in providing a solution.

Croal said that the ministry was working to strengthen the monitoring capacity of not just Region 9, but of all ten regions.

APNU MP Jaipaul Sharma suggested that a fully functioning Public Procurement Commission would do much to curb the problem since it would have the power and authority to blacklist contractors who continue to do substandard work and fail to complete contracts on time.

But Teixeira said that the real issue was the non-compliance with the financial regulations that exist. “There are guidelines on what are to be done in these situations and all they have to do is follow them,” she said. If this were to be done, she posited, then the region would see its instances of overpayments reduced significantly.

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