City too broke to tender for goods and services

-King tells inquiry

Royston King

Town Clerk Royston King yesterday attempted to justify City Hall’s practice of procuring goods and services without contracts by saying that its bankruptcy has meant that it must resort to expedient means.

King testified yesterday at the Critchlow Labour College that because of its financial status, the municipality has had to rely on “agreements” with “civic-minded” companies that are willing to do the work without contracts and wait to be paid when “monies become available.”

“A council without money cannot tender for goods and services. It must resort to the financial expediency of credit,” King told the Commission of Inquiry (CoI) into the administration and operations of the Georgetown Mayor and City Council (M&CC).

Companies that were willing to do work based on this “agreement,” King claimed, include XL Engineering, LaRose Engineering and SANDIP Waste Disposal.

XL Engineering had appeared before the commission on October 15th and claimed that between December, 2015 and June, 2016 it was engaged without contract by King to provide cleaning services, particularly in the Le Repentir Cemetery.

According to Legal Counsel for the CoI Sherwin Benjamin, the company claims to have done more than $150 million in works for which it only received partial payment.

King admitted that an agreement was in place and that the council owed XL Engineering but would not confirm the sum, saying he couldn’t recall.

He told the CoI that the contractor was brought to the administration’s attention by the then Chairman of the Finance Committee, the late Junior Garrett, who along with City Treasurer Ron McCalmon and himself worked out the agreement with the company.

King maintained that while there was no contract, there at least “must be some document in the treasurer’s department setting out work to be done.”

He also attempted to explain how normal the practice was by listing for the Commission a number of companies which entered into similar agreements but Justice (ret’d) Cecil Kennard, who is leading the inquiry, was unimpressed.

“That is a loose way of doing business… if a fraud is to be detected, we would not have sufficient documents… it creates suspicion…creates the impression that something is wrong there if the procedure is not followed,” he argued. “What is important is not what the contractor agrees to but what the law says,” he added.

Both Kennard and Benjamin further challenged King to pronounce on whether there had been misappropriation of funds at City Hall.

Benjamin noted that the Ministry of Communities has warranted sums to cover the contracted work but contractors remain unpaid though the monies have been spent.

“Money was paid to City Hall. City Hall at this stage of the game has not made payments to the contractor. Does that amount to misappropriation of funds?” Benjamin questioned, while stressing that he was not accusing the Town Clerk of appropriation since payments are the remit of the City Treasurer.

King responded, “I do not think so,” but after a reprimand from his lawyer, Maxwell Edwards, who directed that he listen and understand the question, he noted that he would have to know why the contractors were not paid before he could answer.

The Auditor General’s Office has also testified that the city has failed to account for $70.48 million of a total of $500 million allocated to it by Central Government for the restoration of Georgetown in 2015 and 2016.

Audit Manager Dhanraj Persaud had testified that the Audit Office cannot issue an opinion on financial statements that are not prepared in accordance with generally accepted accounting principles.

His words mirrored those of Auditor General Deodat Sharma, who earlier this year told the Public Accounts Committee that his office had not been afforded enough access to the City Council’s records to judge whether its accounts are “clean.”

In his 2016 report, Sharma noted that the budgeted $200 million for Georgetown restoration initiatives was spent at December 31st, 2016. However, on December 22nd, 2016, the M&CC submitted a report on capital works, with expenditure amounting to $173.505 million, $26.495 million less.

Specifically, $173.505 million was spent on five projects and $42.123 million for the purchase of office equipment and furniture. The five projects covered by the allocation were the Kitty Market reconstruction, for which $60 million was spent; the Constabulary Training School, on which $23 million was spent; the City Engineer’s building, on which $13 million was spent; the Constabulary Building (headquarters), on which $12 million was spent; and the Albouystown clinic, on which $21 million was spent. “Although some of the capital projects were completed, contract documents and the related payment vouchers were still not presented for audit examination,” the report added.

In his 2015 report, the Auditor General had also raised concerns about the manner in which the administration of Georgetown spent a $300 million government subvention, also for restoration initiatives, environmental improvement and improved health and well-being. $6.2 million of the sum was spent on the purchase of a double cab pickup for the City Constabulary, $52.163 million for the de-bushing of the Le Repentir Cemetery and $241.637 million for the restoration of Georgetown.

According to Sharma, the basis of the award of several contracts for the weeding of parapets, desilting of drains and cutting down trees in various areas around Georgetown could not be determined due to the unavailability of supporting documents. As a result, it could not be determined whether proper transparency and accountability were exercised in the awarding of the contracts.

The Audit Office examined 212 payment vouchers and pinpointed discrepancies, including 167 instances where there was no evidence of the vouchers being certified by the accountant or any other authorised officer; 140 vouchers, totalling $143.683 million, which had not been approved by the treasurer; and 58 payments, totalling $48.404 million, which had not been approved by the Finance Committee.

Additionally, there was no evidence of receipt or payee acknowledgement for a payment of $750,000 to a contractor.

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