–forensic auditor recommends

FORENSIC auditor Saykar Boodhoo, who investigated the operations of the Guyana Marketing Corporation (GMC), has recommended that the Government fire Hanniel Madramootoo if he is still in the employ of the Agriculture Ministry.Madramootoo was allegedly involved in acts of fraud. It is alleged that Madramootoo, an engineer, colluded with a contractor to execute a multi-million-dollar fraud on GMC.

Identifying the act as a case of financial impropriety conducted by the GMC Senior Management, Boodhoo, in his 64-page report, explained that in 2011 a contract was awarded to Constantine Engineering and Construction Services of Trinidad and Tobago to construct a new building for the GMCs Head Office and the Guyana Shop.

The contract, in the sum of $23.9M, was reportedly awarded by the National Tender and Procurement Board (NPTAB); however, the auditor was unable to review the bidding documents, due to the lack of evidence.

According to Boodhoo, NPTAB Head Donald De Clou indicated that there is no evidence suggesting that NPTAB was involved in the tender process, even though the contract indicated otherwise. This particular project was managed by Madramootoo, an engineer attached to the Agriculture Ministry at the time.

By February 2012, the contract sum was amended to include the additional sum of $7.6M without going out to tender. The amendment to the contract also extended the contract duration to March 16, 2016.

“Based on discussion with Mr Owen Nestor, GMC’s accountant, shortly after the contract amendment, the contractor announced to GMC that he (would) be unable to complete the construction of the GMC office building. It is unclear exactly how much funds was given to Constantine Engineering.

“As such, another contractor was called in to complete the electrical wiring and relevant works to the GMC Office building,” the auditor explained.

The situation further deteriorated. Months after it was handed over to GMC, there were leaks throughout the building via the roof. Another contractor had to be hired to remedy the situation.

“It was also discovered that old lumber and old zinc sheets with euroband were used to construct the roof of the building.

EVIDENT THROUGHOUT
“Throughout the building, substandard work is evident and present. The wood used to construct the internal walls was poorly manufactured, and the concrete walls are chipping and with paint peeling and falling off the walls,” the auditor further pointed out in his report.

The auditor believes the GMC’s Board and senior management are just as culpable as the contractor. He explained that the directors visited the building on numerous occasions during its construction stage, but failed to highlight the “blatant poor quality of work performed by the contractor.”

Additionally, he said, there is no documentation indicating that the Board had made any attempt to prevent the fraud that was being perpetrated against GMC by the contractor.

“An Internet search for the name of the contractor’s firm — Constantine Engineering and Construction Services Limited — proved futile,” Boodhoo pointed out.

SHOULD BE BLACKLISTED
The auditor is therefore recommending that Constantine Engineering and its owner be barred from providing any services to the Government of Guyana.

A call was also made to have the engineer who was contracted to oversee the construction of the building fired, if still in the employ of the Ministry of Agriculture.

It was also recommended the Government send letters of reprimand to the members of the Board of Directors who were engaged by GMC during that period of time.

“The letters should indicate their unprofessional behaviour and gross negligence which they exercised during their time at GMC. Such directors should also be barred from future engagements with the Government of Guyana,” Boodhoo recommended.

For years, the Guyana Marketing Corporation (GMC) has been riddled with alleged corruption, ranging from acts of fraud to mismanagement, the audit report said. According to the forensic audit report compiled by Boodhoo for the period January 1, 2012 to December 31, 2015, the Agriculture Ministry has also been deliberately transferring funds to the Corporation to be used as “slush funds” for the Permanent Secretary and the Agriculture Minister.

Though the audit report did not disclose the sums, it is believed that millions of dollars were transferred to GMC by the Agriculture Ministry, without any clear indication of the purpose of these funds, which have increased significantly over the years.

According to the auditor, it appears as though these funds were deliberately transferred to GMC to circumvent financial accountability at the Ministry of Agriculture.

“These funds appear to be slush funds for the Permanent Secretary of MoA and the Minister of Agriculture,” Boodhoo said.

The auditor is recommending that the Permanent Secretary and Agriculture Minister be formally informed that these funds are not GMC’s revenues and expenses, and should be recorded correctly.

“The PS and MoA should be informed as to the proper accounting of the funds and the related expenses. GMC should record the funds from MoA as balance sheet general ledger asset and liability accounts. As funds are expended, the asset and liability general ledger accounts should be reduced accordingly,” the auditor explained in his report.