Local government ministry rapped for glaring ‘incompetence’
The Public Accounts Committee of Parliament appeared stupefied yesterday after the permanent secretary in the Ministry of Local Government, Marsha Henry-Martin, failed to provide members with adequate answers in relation to high rental charges, missed timelines, and erroneous measurements used in arriving at costs for rental of its current offices at 66 Hagley Park Road.
Henry-Martin was to provide the Mark Golding-chaired committee with an update to concerns raised in the Auditor General’s Department (AGD) annual report of 2018.
Committee member Peter Bunting slammed the ministry’s handling of various matters as one of the most inept displays by a government agency he had ever seen.
“This is extraordinary. I have never seen such incompetence,” Bunting said, after Henry-Martin failed to explain the ministry’s missteps.
Under the contractual terms, the ministry is required to pay $76 million annually on a five-year lease agreement to the building’s principals, Lyttleton Shirley and his wife, Madge Shirley.
It was disclosed that the ministry effectively paid approximately $210 million in rent before it occupied the building on the contentious 40,000 sq ft of space, negotiated by the National Land Agency (NLA).
“This is a building which the ministry has rented for five years, and immediately upon renting proceeded to spend $80 million upgrading,” Bunting said.
In the report, ministry officials said it did not verify the square footage of the area rented but relied on a commissioned appraisal dated January 15, 2016. The appraisal had been ordered by the “landlord”. It recorded 40,000 sq ft of rentable space.
However, arising from a request, the NLA confirmed that the area actually measured only 38,130.81 sq ft, or 1,870 sq ft less than the amount stipulated in the agreement, resulting in the ministry overpaying $7.1 million.
Further, the AGD found that the ministry undertook the renovation of the leased premises under six different contracts in three main phases and that, as at November 16, 2018, the local government ministry presented evidence confirming variations totalling $30 million to the original contract, effectively varying the contract value to $80.66 million.
In addition, the AGD report stated that the ministry’s poor monitoring and execution of the contracts led to the payment of $38 million in rent between the projected completion date on the major renovation contract and occupation of the building.
“The ministry undertook the contract under three main phases, citing the fact that it did not receive the requested budgetary support for the activity,” the auditor general’s report stated.
“Seeing that the lease was active, the ministry utilised funds from existing allocation towards the commencement of the renovation,” the AGD stated.
Henry-Martin told the committee that four persons have since been written to regarding procedural errors and could face disciplinary action pending the outcome of an intra-ministry investigation.
Quizzed as to the duration of the renovation, Henry-Martin admitted that work on the premises went beyond the 21-day timeline.
Golding said it was bizarre that it took 229 days after the agreed date for renovation to be completed, citing the lease as a “sweet deal” for the landlords.
Henry-Martin said that a series of unforeseen circumstances, including issues with the building’s electrical system, were responsible for the delay.