AN internal procurement audit of the National Agricultural Marketing and Development Corporation (Namdevco) has unearthed multiple cases of money being spent without contracts, backdated invoices, over-compensation for projects and contracts being awarded to companies without Value Added Tax (VAT) registration.
It has concluded that the procurement of goods and services at Namdevco "are weak/ineffective/absent at times. At present the internal controls are not strong and the filing system is almost non-existent".
The audit, dated May 21, was conducted by Namdevco's internal auditor Andre Sookram.
The scope was from 2010/2011 to November 2011.
The audit noted that there was no formalised procurement procedures and the State enterprise received bids which did not comply with the tender rules "by incomplete forms and non submission of NIS registration, Board of Inland Revenue and VAT clearance certificates. It appears the bids did not go through a pre-qualification analysis."
In one instance, Namdevco received 12 invoices from a contractor, See First Construction Services of Lendore Village, Chaguanas, for a $256,200 contract it was awarded to upgrade the Piarco Packing House. The invoices were broken down into varying amounts of ranging from $22,000 to $24,900.
"It was observed that See First Construction submitted all its invoices below $25,000. It appears that this was done to avoid seeking the tender committee's approval for the amount of $256,200 but rather splitting the cost into 12 invoices below $25,000 to meet the CEO spending limit," the report noted.
The auditor observed that that there was also an over-payment to the project manager of $20,142 and furthermore, Namdevco did not have a contact on file for See First Construction Services.
"If there was no contract what were the scope of works and the specifications of the work to be done? How was it determined that the contractor was capable to do work that was required? There was no contractual price (Bill of Quantities), how was it determined if the corporation was getting value for money?" the report observed.
"It was also observed that See First Construction Services total invoices was for $256,200 which was over the VAT threshold of $200,000 at the time and was not registered for VAT," it said.
The audit also examined Namdevco's tendering for tables to companies also not registered for VAT and over the threshold.
"The Corporation should remember it is a State Enterprise and it should seek to work with companies/sole traders that follow the laws (tax) of the land," it said.
The audit also considered that variations were made to the contract to upgrade the Southern Wholesale Market but that the variations were never brought to the Tenders Committee nor were they approved by the board.
The audit also noted that there was no contract between Namdevco and a company called M&L Rentals for which tents and tables were done on a weekly basis. The audit noted that M&L Rentals was not on the service provider lists of the State corporation.
"M&L Tent Rentals for the period May 2011 to August 2011 charged delivery and set up at a cost of $400 for the Chaguanas and Diego Martin Farmers Market but had quoted $200 and $300 respectively. This overpayment should be calculated and the supplier written to in an effort to get the excess payments returned," the report said.
Contacted by the Sunday Express, Namdevco chairman Robert Ramsamooj yesterday confirmed the findings of the audit but pointed out that the company has since put things in place to correct the procurement leaks.
"Those things did take place but we have since put things in place to correct it," he said.
Ramsamooj said the payments of the contracts were broken down so they never came before the board.
"It escaped scrutiny because it was the legal limit of spending for the chief executive. As a chairman, I cannot micromanage nor sit on the Tenders Committee," he said.
He pointed out that a former employee signed off on those invoices and was subsequently fired by the board.
Food Production Minister Devant Maharaj said yesterday that the audit was conducted before he assumed the Food Production portfolio.
He said he hosted a meeting with Ramsamooj, Namdevco's chief executive Krishna Ramrattan and the ministry's permanent secretary Mryna Thompson last week to discuss the audit report.
"We went through the report complaint by complaint. It was clearly an administrative function at Namdevco. The issues did not come before the board but they been working on it."
He noted that State enterprises will be under heavy scrutiny for budget allocations unless they are transparent and can stand up to scrutiny.