Audit report highlights procurement deficiencies at Labour Ministry
An internal audit report has uncovered glaring deficiencies in the procurement practices of the Ministry of Labour and Social Security.
Over the seven-month period April to December 2017, payments totalling $50 million were made to five suppliers for security, janitorial and other services but no valid contracts were seen.
The report noted that despite previous audit reports in 2015 and 2016, the ministry continued to operate in breach of the procurement guidelines.
It said there was no evidence that the relevant steps were taken to regularise the janitorial service.
The findings of the internal audit unit were highlighted in the annual report of the auditor general, which was tabled in Parliament on Tuesday.
It was revealed that procurement committee minutes were not properly maintained.
Minutes were not presented to confirm that the committee approved the procurement of goods, services, and works amounting to $54 million.
There was also no indication that the expired carry-on agreement with the service providers was renewed.
However, the internal audit report stated that two contractors were paid more than $14 million between January and December 2017.
Additionally, there was no evidence that the ministry consistently prepared comparable estimates to evaluate contractors' quotations and the scope of work to be carried out.
Auditor General Pamela Monroe Ellis said that the report cited one instance in which a request for quotation was seen to renovate office space and walkway construction at a cost of $2.4 million.
However, no estimate was seen to compare the proposers’ prices.
From the number of works undertaken at the ministry’s offices, there was only one instance in which a comparable estimate was seen.
The ministry has since advised that a specialist procurement unit and a property management and maintenance unit have been established.
The ministry has also said that the tendering process for the security service and development of specifications for the janitorial services were in progress.
In another development, the internal auditor uncovered weaknesses in the hiring of a consultant for advisory service at the ministry during the then People’s National Party administration of 2012.
The internal auditor reported that there was no evidence that other individuals were invited to provide the consultancy service.
“No evidence of a terms of reference was provided. Instead, the proposal put forth by the consultant was accepted,” the report stated.
According to the report, between November 15, 2012, and December 22, 2014, US$471,448.28 was paid to the consultant.
Of this amount, five payments totalling US$255,729.94 related to professional fees.
Some of these invoices referred to project coordination which included developing templates for evaluation, liaising and conducting meetings with professionals.
However, no document was presented that indicated the contractual arrangement was extended to project management.
And a contract was not presented to confirm that the consultant was retained beyond May 2013.
Only two contracts were seen, first in 2011 and the second commencing October 1, 2012, for a period of eight months.
The internal audit report also revealed that funds were paid to several contractors to provide similar services.
Further, invoices were not endorsed to indicate whether goods or services were received or rendered satisfactorily.
The audit could not confirm whether there was value for money as the basis of establishing contract fee was not documented and, in some instances, contractors were terminated after significant sums were disbursed.
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