Fri | Sep 22, 2017

$20m hay wreck - Auditors highlight cost overruns, free-for-all on agriculture ministry project

Published:Friday | May 19, 2017 | 5:00 AMLivern Barrett
Hugh Graham

A multimillion-dollar project touted by the Ministry of Agriculture as the future model for hay production in Jamaica has descended into a train wreck of financial mismanagement, according to the findings of a damning audit report.

The audit of the Hay Commercialisation Project, which was completed last August by auditors at the agriculture ministry, paints a picture of a free-for-all, with cost overruns, unauthorised spending, and poor record-keeping for an initiative that is costing taxpayers $20 million.

As an example, it found that between February 2014 and June last year - the period of the review - $14.6 million of the $20 million disbursed by the Jamaica Dairy Development Board (JDDB) to cover the costs associated with the project had been exhausted.

According to the auditors, this included millions of dollars in overspending on irrigation equipment, tractor repair/maintenance, and land preparation.

"According to the budget [for the project], a total of $2.9 million was budgeted for the areas. However, an amount of $7.6 million was spent, which resulted in an overexpenditure of $4.69 million," the report found.

The auditors found, too, that there were discrepancies in the way payments had been made.

"It included nine payments, totalling $273,539, that had no supporting payment vouchers; eight payment vouchers, totalling $533,892, that had no original bills or invoices attached; and one instance was seen where payment totalling $21,800 was not signed by the programme manager," the audit said.

As a result of the audit, the project was suspended in January by Hugh Graham, the former chief executive officer of the JDDB, whose contract was terminated earlier this month.

"In light of the nature and scope of the adverse findings by the auditors, the JBBD hereby suspends all transactions related to said project until the report is finalised by input from [the] research and development [division]," Graham wrote to Donovan Stanberry, permanent secretary in the ministry, on January 19.

 

FAILED TO DELIVER OBJECTIVES

 

The project is the brainchild of the research and development division of the agriculture

ministry and was set in motion in 2014. The plan, according to the ministry, was to transform the Bodles Research Station in St Catherine and the Hounslow Training Centre in St Elizabeth into what it described as "best practice centres for hay production" in Jamaica.

"Increase milk production by 20 per cent per year until average milk production is a minimum 10 litres/cow/day, up from current levels of 7 litres/cow/day," the agriculture ministry said in a document tabled in Parliament outlining the objectives of the project.

"Provide low-cost, high-quality hay to dairy farmers in St Catherine and St Elizabeth, thereby increasing milk production during the dry periods of December to April," the document continued.

But according to the audit, a copy of which was obtained by The Gleaner, the project has failed to deliver any of its objectives and deliverables.

"The Jamaica Dairy Development Board should intervene and do a comprehensive review to decide on the best way forward," the auditors urged.

They further warned: "Such an intervention is needed to mitigate any further losses. This should be done immediately before funding is exhausted without realising any meaningful benefits."

The audit noted that $6.5 million was allocated to the Hounslow Training Centre to purchase capital equipment such as a hay baler, a Tedder rake, and a mower conditioner, and a further $6.4 million was allocated to the Bodles Research Station to purchase a hay baler, a fertiliser spreader, a rotovator, a plough, and a seed planter.

"During investigations, it was observed that none of the items mentioned were purchased. Due to the non-purchase of the items, no irrigation equipment was in place to adequately water the hay. No hay baler machine was available to mound the grass on to bales," the auditors wrote.

livern.barrett@gleanerjm.com