DESPITE racking up a debt of $12 million, Courtney Benn Construction Services Limited (CBCSL) was still receiving state-owned construction materials on credit. This was revealed following a probe into the operations of the state-owned Asphalt Plant, which is a subsidiary of the Demerara Harbour Bridge Corporation (DHBC).
According to the findings of the investigation, the credit sale was done against the wishes of the Board of Directors of the DHBC.
“We noted that the plant continues to give credit to CBCSL despite the decision of the directors to discontinue selling asphalt on credit to this client until all monies owed are collected,” the report stated. The document indicated that as at December 18, 2020, the construction company had owed the plant some $12, 031, 153.
According to the report, management of the Asphalt Plant was aware of a decision by the board of directors to discontinue sales to CBCSL until all monies owed were collected. The management of the Asphalt Plant responded to the findings, saying that during the period under investigation, the plant had not implemented a credit policy.
“Hence, we were unable to be guided by such process,” the DHBC said.
The investigations, headed by chartered accountant Chateram Ramdihal, determined that the sale of asphalt on credit was poorly managed and that there were [sic] no policy governing the sale of goods on credit.

“The lack of credit policy resulted in all credit sales being approved by the General Manager without any evidence of a credit-review process being carried out and credit limits set for the various customers,” the report revealed.
In addition to poor sales policies, the Asphalt Plant was also engaged in a questionable loan arrangement with one of its competitors.
“The Asphalt Plant loaned bitumen to Suresh Jagmohan, a competitor, and China Railways without the approval of the board. These transactions occurred on December 14, 2017 (Suresh Jagmohan) and February 9, 2019 (China Railways) and was closed in the latter part of 2020,” the report specified.
The investigating team lamented the lack of a credit policy for the government agency. A credit policy is a set of guidelines that outlines credit and payment terms for customers and establishes a clear course of action for late payments. The lack of such a policy exposes the plant to high risks of clients failing to pay on time.

“An analysis of receivables revealed that an average of 75 percent (75%) of debts is owed beyond ninety,” the report indicated.
The investigators advised that management of the plant make all efforts to ensure that a good credit policy is crafted and fully implemented, even before credit is extended to customers.
The investigating team maintained that credit beyond a certain limit should be approved only by the board of directors, as opposed to resting on the judgment of the general manager alone. The team also urged that a credit limit be instituted, so as to minimise the risks attached to granting credit.
“Management (of the plant) should ensure that all customers are assessed at set intervals to determine the maximum credit to be given that will result in customers being able to pay on time,” the team advised. The investigation of the asphalt plant, which focused on the period 2013 to present, wrapped up last week, and the findings were presented to the senior Minister of Public Works, Juan Edghill, who said that persons found guilty of “haemorrhaging the public purse” will face consequences.