THE Public Accounts Committee (PAC) of the Parliament of Guyana, on Monday last, heard that officials of the former Ministry of Public Security under the APNU+AFC coalition government purportedly breached Guyana’s finance laws when a payment was made in advance for a fire boat which arrived in Guyana years after the contract was signed.
At the time of the disclosure, the PAC was examining the Auditor General’s 2017 and 2018 reports relevant to that ministry.
The PAC heard that the boat was procured for the Guyana Fire Service (GFS).
Minister of Public Works, Juan Edghill, raised in the committee that the sum of $174 million was expended for purchases which included the fire boat in question.
That sum was part of a broad sole-sourcing probe.
According to the Auditor General’s report, the contract in question was signed in early August 2017 with the boat expected to be delivered within nine to 10 months after the contract was signed.
As of December 31, 2017, some $131.3 million was paid to the contractor.
“They had approval for a multi-year contract, and the final payment was budgeted for in 2018,” Minister Edghill commented on the contents of the report, adding: “At the time of reporting, the boat was not received although ten months had elapsed.”
Minister Edghill inquired the cause behind the delay in the delivery of the sole-sourced boat.
It was then revealed that the boat was procured from the United Kingdom-based company, Angloco, and was delayed as the company could not find a suitable vessel for couriering the boat to Guyana.
The company, at the time, had reportedly sent a correspondence indicating the issue. The boat arrived in Guyana in late 2019.
When questioned in the PAC, former Permanent Secretary (PS) of that ministry, Daniella McCalmon, said the final payment for the boat was made in 2018 even though it had not yet arrived in Guyana.
Minister Edghill asked what was the basis for making the final payment since the contract was for the delivery of the boat at Port Georgetown. That had not yet been fulfilled.
It was then that the former PS told the committee that the payment terms for the contract was set to be 47 per cent advanced payment, followed by the 53 per cent as the final payment when the boat’s construction was complete.
For his part, Finance Secretary (FS), Sukrishnalall Pasha, said that in a prior meeting, he had explained to accounting officers that making advance payments is not permitted under Guyana’s Fiscal Management and Accountability Act (FMAA).
Pasha told the PAC: “When advanced payments are made, these payments should be secured by a bond in the event that things go in the wrong direction. We could recover those funds.” “They should stick to what is in the contract,” FS Pasha continued.
He further added that if the contract required “staggered” payments, that should be done. He pointed out, however, that the law is breached when advanced payments are made.
“What is allowed is what is contained in the contract document, and it could never be 100 per cent,” Pasha said, adding: “[what] the contract document should also say is that those advanced payments should be backed by some bond, and in this particular instance this was not backed by any bond.”