Accounting agencies paid out $82.658 million in overpayments on the measured works for 98 contracts in 2016, representing a more than 50% increase in overpayments compared to 2015, according to Auditor-General Deodat Sharma.
The 2015 Auditor General’s report had also recorded an increase in the number of occurrences and the value of overpayments on contracts, which was $35.700 million in 2015, compared with $31.315 million in 2014.
That sum has further increased in 2016, which saw sums totaling $65.076 million overpaid by regions and $17.582 million overpaid by ministries and departments.
Of $65 million in overpayments by the regions, $45,265 million or approximately 69% the total sum was paid out in hinterland regions 1, 8 and 9.
The 2016 Auditor General’s report, which was laid in the National Assembly on Thursday, noted that several projects in the regions saw contractors being paid in full before beginning works and then delivering incomplete and substandard work. In some cases, contractors had been paid in full for works that never started. One such project in Region 1, the construction of a tarmac at Port Kaituma Secondary School, Matarkai, saw the contractor being overpaid $1.642 million.
According to the report, “the Regional Tender Board awarded [the contract] to the lowest responsive of four bidders in the sum of $3.905 million. Amounts totaling $3.514 million were paid to the contractor [but] physical verification on 22 June revealed that the works were incomplete and the contractor had demobilised from the site; no material or equipment [was] on site. In addition, physical verification of the works revealed that the contractor was overpaid the sum of $1.642 million.”
Further, according to the report, no contract document was presented for audit examination and the bill of quantities was poorly prepared, lumping together items to be paid for as one Cubic yard [of the completed] item.
Another project, the construction of a reinforced concrete bridge at Arocuro, Mabaruma, saw the contractor being overpaid $851,420 on the original contract as well as receiving an unauthorized payment of $2.998 million for an additional 12 piles.
The report explains that the piles were paid for at a significantly higher rate that the provisional sum, increasing from $140,000 per pile in the original bill of quantities to $230,000. Further no approvals for these additional works were granted. A physical verification found that the 12 additional piles are “not serving any purpose in supporting the bridge structure” and that the “overall finished quality of the concrete work was very shoddy.”
“Exposed steel reinforcement visible in some sections of the reinforced concrete rails to the bridge” were also noted even though the rails were to have been constructed using galvanised pipe rather than reinforced concrete.
The contract for repairs to Baramita’s Teacher’s Quarters, at Matarkai, which was awarded to the sole bidder by the Regional Tender Board in the sum of $7.001 million recorded an overpayment of $2.537 million after physical verification. The contractor had been paid the full sum of the contract.
A contract for repairs to Kariako Primary School was also awarded by the Regional Tender Board in the sum of $4.994 million to the sole bidder but physical verification revealed an overpayment of $463,000 on the contract.
In addition, it was observed that in this case a new school building was constructed and paid for under line item 6242 – Maintenance of Buildings – although it was an expenditure which should have been met from capital expenditure. In this case again, no contract document or contract agreement was presented for audit examination.
In Region 8, the report noted a $1,462 million contract for repairs to the revetment of Kawa Creek, where the contractor was paid the full sum before the end of 2016 although physical verification in July, 2017 found that no works had commenced.
The Auditor General has asked the region to investigate how payments were approved for works which were never completed and sanction those persons responsible for certifying the work as being completed.
Also identified were two $1.5 million contracts for the rehabilitation of roadways from Chiung Mouth to Kato Phase 1 and Chiung Mouth to Kato Phase 2. In these cases as well, the complete contract sum was paid as of December 2016 but no works had commenced as of July, 2017.
Another contract for repairs to the Sanitary Block at Bamboo Creek Primary School saw the contractor being paid $5.541 million, which physical verification revealed was overpaid by $1.875 million.
Additionally in this and several other cases, the commencement and completion dates could not be determined from the documents presented for examination. In fact, the contract registers maintained by the Regional Accounting Unit were not properly and accurately written up.
“Payments made could not be easily traced, payment voucher numbers were seldom recorded, information pertaining to date of contracts were not entered and the contract payments were not updated in a timely manner,” the report states.
It is this same region which is currently the subject of an investigation into how $44 million was expended for the supply of dietary items for the Kato Breakfast School Feeding Programme, while only $9.770 million could be accounted for.
Similarly, the report says that in Region 9, $2.494 million was overpaid on a $8.530 million contract for general repairs to the existing Quarrie Bridge, $576,000 was overpaid on a the $11.746 million repair of the Old Guest House which turned out to be the construction of an entirely new building and $450,000 was overpaid on the $4.996 million repair of the culvert and Rodeo Ground.
In the case of the Rodeo Ground contract, no details on the tendering or award of the contract, which also turned out to be a capital instead of current project, was seen.
The Auditor General further questioned why in the case of the Old Guest House the contract was awarded to the second lowest of eight bidders rather than the lowest and why on a contract of $11.746 million the contractor was paid $12.529 million.