– over $9M spent on fuel for vehicles “not working”

By Ravin Singh
A FORENSIC audit into the operations of the National Drainage and Irrigation Authority (NDIA) has revealed that contracts issued by the Authority were mismanaged, while over $9M was spent on fuel for vehicles that were “not working.”The audit was carried out by Nigel Hinds Financial Services and was presented by the Ministry of Finance on November 30, 2015 and has since been posted on the ministry’s website.
After a review of the projects awarded by the Authority, the report revealed that out of contracts valued at $647M, 59 percent were awarded through sole-sourcing, 17 percent by quotations and 24 percent by Public Tendering. Most of the contracts awarded by sole-sourcing went to Water Users Associations.
It was then revealed that while a three-quotation procedure is used for projects up to $15 million, numerous works were sole-sourced to just under 15 million to avoid Cabinet scrutiny.
“Monies are regularly transferred to Mahaica Mahaicony Abary- Agricultural Development Authority (MMA-ADA). Many at just under 15 million to avoid cabinet scrutiny,” the audit report said.
One of the mismanaged contracts was to Suresh Jagmohan Hardware Supplies and Construction Services in August 2014 for the supply of Steel Sheet Piles, valued in excess of $177M. This was for use in the construction of pumping stations.
However, it was revealed that when the steel sheet piles were delivered, independent consultant – Mark Yhann found that steel Q345B was delivered and not ASTM A690 as required by the contract specification, and the sheets delivered should have been coated with coal tar.
And although management was made aware that the specifications were incorrect, it was noted that the chief executive officer instructed the contractor to utilise the sum of $4M in the contract for factory inspection to supply more sheet piles.
Further, the report noted that there were significant sums of money spent on “The Operating, Servicing and Monitoring” of NDIA machinery at various locations over the review period.
During this time, contractors submitted invoices for hours worked at various rates.
According to Hinds’s audit however, members of the Finance Office indicated that they could not verify what work was actually done, but signed in “good faith.” In similar fashion, other staff members from engineering sections claimed that they were instructed to sign and certify documents for payments even though they had no knowledge of the projects.

Fuel
Meanwhile, the report examined fuel purchases which represent a significant cost to NDIA. It was highlighted that between January 1, 2011 to December 31, 2014, $1.4B was spent on fuel. This reportedly resulted in “serious concerns” being raised by the executive management and employees regarding the accounting and management of fuel and lubricants.
The report explained that NDIA does not have storage facilities for fuel but that the auditors were told that its fuel was stored in contractors’ tanks. What was observed also was that these same contractors were being used to transport the fuel.
As such, the auditors reasoned that, “There were no proper explanations as to how fuel held in contractors’ tanks was accurately monitored.”
What was also discovered was that fuel was issued to machines classified as “not working or out of service.”
For the period referenced (2013 to mid-2015), the machines worked a total of 3,812 hours and utilised a total of 47,897 litres of fuel. This, according to the audit, amounted to approximately $9.7M in fuel losses for the few months sampled each year.
“The Machine Status Report is prepared by the regional engineer. There is evidence that the fuel clerk manipulates his figures. Many persons we interviewed from communities in the Corentyne and who requested that their names not be mentioned indicate that fuel was sold illegally from the Whim outlet,” the report stated.