Jamaica
The health ministry’s spend of more than $619 million in the COVID-19 period, up to March 2021, without proper records and procurement management triggered a clash between Auditor General Pamela Monroe Ellis and permanent secretary in the ministry Dunstan Bryan at Tuesday’s meeting of the Public Accounts Committee (PAC).
Bryan, in a staunch defence of his stewardship of the pandemic spending, categorised the finding in the auditor general’s compendium report on COVID-19 expenditure as “less than useful”, saying it had no context, and demanded to know what laws had been breached.
Monroe Ellis pointed out that the audit was undertaken in May 2020, two months after the COVID-19 pandemic hit Jamaica, in order to provide guidance as well as to identify any missteps to give the Ministry of Health and Wellness and other ministries an opportunity to address the concerns of deficiencies highlighted.
The health ministry had received more than $8 billion to address the COVID-19 emergency.
“Apparently, at the heart of this [Bryan’s position] is that the expenditure of $619 million doesn’t fall under the procurement guidelines because they represented hotel facilities. I hold a different view,” she stated.
Pointing out that at that time those accommodations were closed and the Government had rented the space for people who were being quarantined, Monroe Ellis remarked that nobody was sent on a weekend trip.
“The aim of this audit is to ensure that there is transparency in the process, and accountability is upheld. He’s relying on a purchase order. The purchase order, as he says, can be used as a contract. That’s not in debate, but there are certain tenets that must be present. So, if it is going to be used as a contract, the terms of agreement must be clearly stipulated to hold the supplier accountable and to protect the Government,” said the auditor general.
The report, which was tabled in Parliament in November 2022, said there was a lack of transparency in payments to seven hotels and guest houses for quarantine accommodations. The ministry provided evidence of a formal contract with only one, according to the audit.
Monroe Ellis told the committee that the purchase orders “contain absolutely nothing that would amount to a contract”, adding that the ministry used the orders as payment vouchers.
She explained that purchase orders must set out clearly the specifications of the goods being procured or the terms of agreement of services.
“The purchase orders ought to come before the process, and signed off on. Oftentimes the purchase order was actually prepared after the invoice,” she said.
The auditor general said, because the permanent secretary was “hell-bent on holding on to this purchase order concept”, he had had failed to provide any evidence that he had satisfied himself that all the rules had been followed.
“It’s all we were asking for, it’s not intended to be a debate,” she insisted, to which Bryan retorted, “It is a debate, because I disagree.”
He said it was unclear which compliance rule was used in the audit, pointing to the exemption of travel services and hotel accommodations under the public procurement law.
However, Monroe Ellis said, “My position is, and will remain until the permanent secretary can provide more than an argument that these funds were spent with due regard for the proper governance system and the ministry, in fact, received value for money,” Monroe Ellis said.
But the permanent secretary argued that it was not for him to provide evidence as the report prepared by the auditor general has to be governed by the law.
“The auditor general is not at large. Her opinions do not bind me. The law binds me. Until the auditor general can provide, in law, under Section 25 of the [Public Procurement] Act, I have no obligation in law to adhere to any finding that is not predicated in law. The auditor general is obligated in law to state to me, a public officer, duly authorised, to give that assurance what law have I breached. This is what is wrong with this report; there is no context,” Bryan argued.
He explained that, at the time, the ministry did not know the exact number of rooms which would have been utilised, but knew it had to protect all vulnerable individuals in affected households.
“We had to move quickly. What we agreed on was a substantially reduced rate that the hotel told us that, in order to start up their plants they needed an advance, because they had to restart their air-conditioning and recall staff. What is egregious around this report is that the report robs the 223,000 persons of the health system the benefit of understanding their role and function in protecting this country against a possible disaster,” he said.
However, Monroe Ellis stressed that, while she understood that the COVID-19 situation was an emergency, that did not negate the need to ensure that the requisite guidelines were followed and that accountability and transparency were preserved.
The COVID-19 expenditure audit compliance compendium report on the ministries of health and labour, and social security, noted also that six service providers without a formal contract were paid a total of $293 million.
“In the absence of formal terms and conditions, the Ministry of Health and Wellness was exposed to unbudgeted liability claims and varying payment arrangements, in a context where one service provider unexpectedly asked the ministry to pay the facility’s electricity bill and 90 per cent of water charges,” the report stated.
The health ministry also paid out $124 million to eight suppliers for infrastructural works done as part of response activities between January and June 2020, without contracts in place. Concerns were also raised about the transfer of another $174 million to the Ministry of Local Government, National Solid Waste Management Authority, and a non-government organisation without the requisite approval of the finance ministry.
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Guyana
An audit conducted by IHS Markit, a British firm hired by the former administration, to specifically review the expenses of oil major, ExxonMobil between the period 1999 and 2017, to the tune of US$1.6 billion, found that hundreds of US-millions in contracts were single sourced by the company.
According to the document which has been shared with this newspaper, “Vendor spend over the audit period amounts to a total of $1,067 million, of this, procurement details for $953 million or 89% relate to contracts and invoicing.”
A revision of the contracts conducted by the audit team found that US$613.5 million or 64 percent of the value of those reviewed contracts were awarded on a competitive basis and are aligned with the provisions of the 2016 Production Sharing Agreement (PSA). However, 25 percent of the value- US$240 million were single sourced and 11 percent -US$99.5 million were partial single source contracts.
The audit report stated, “For the procurement and award of contracts conducted on a competitive basis, the procurement process provides adequate transparency to meet the PSA requirements.”
It noted, “Of the single source procurement awards, EEPGL has not demonstrated the competitiveness of the rates within the contract for contracts with a combined value of $28,476,876. This amount should be removed from the Cost Bank.”
The Audit firm was hired to review of all exploration and development costs submitted for recovery by Exxon’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), between 1999 to the end of 2017 in the Stabroek Block. The total expenditure that has been amounts to $1,677,774,727.
Following reports on the document by another section of the media, the Guyana Revenue Authority (GRA) issued a statement indicating that the said report is not final.
Be that as it may, the single sourcing of major contracts by ExxonMobil goes against the Stabroek Block contract; the agreement which the government maintains must be adhered to. In refusing to renegotiate the contract to secure better fiscal terms for the country, government said it must adhere to the ‘sanctity of contract’ principle.
In the meantime, its 50/50 partner has been flagged for single sourcing contracts worth US-millions.
Notably, Article 18 of the agreement requires Exxon to establish tender procedures in its conduct of petroleum operations, allowing Guyanese to participate where necessary.
Article 18.2 of the PSA states: “The Contractor shall establish appropriate tender procedures for the acquisition of goods, materials and services which shall ensure that Guyanese suppliers and Sub-Contractors are given adequate opportunity to compete for the supply of goods and services.”
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Bahamas
The government is loading previously signed contracts into its new Bonfire e-procurement system, so that contracts already awarded since the Davis administration took office almost two years ago, will be available to the public, Financial Secretary Simon Wilson told members of the media yesterday.
Wilson reiterated that the old system the government used to keep such records did not “keep good records”, and insisted that all contracts the government signs are a matter of public record.
The Progressive Liberal Party-led government revamped the public procurement legislation and is now putting its new Bonfire system to work.
The Ministry of Finance launched the improved e-procurement portal last September, in order to fulfill its “commitment of transparency and ease of access to procurement opportunities required under the Public Procurement Act, 2021”.
The new platform allows for registered vendors to only receive notices for tenders they are eligible for, to search for opportunities across all government agencies, and to download and receive access to all government procurement opportunities.
“The previous system we had did not keep good records. It’s a very old system,” said Wilson.
“So, what we’re doing is we’re back-filling our information in the new Bonfire system to publish contracts and so forth. To to be clear, all government contracts are public knowledge. So, we don’t have any black budget. So, if the government signs a contract, obviously the government wants you to know. It’s the public’s money. But it is the reporting format that’s the challenge. So, that’s what the issue is. The government doesn’t sign any contract in the dark.”
There have been complaints, though, that the government has not yet disclosed many contracts that have been signed since coming to office.
The Ministry of Finance held a workshop yesterday to assist Bahamian businesses in ensuring their documents for bidding processes are up to par when they apply for an opportunity locally or internationally.
Wilson said it has been found that many Bahamian businesses are passed up for opportunities because of deficiencies in their documentation.
Yesterday’s workshop focused on the energy sector in The Bahamas.
“Renewable energy is very, very important for us,” said Wilson.
“This workshop is because the IDB [Inter-American Development Bank] rules for bids are kind of different. What we’ve found in the past is that Bahamian firms, for whatever reason, don’t do well in the bid process. So, we have the pre-bid workshops to get Bahamian firms to understand the opportunity… understand the rules. We can do the work, but we need to give Bahamians the opportunity to get the contracts.”
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Guyana
It is absolute foolishness to accuse the government of breaching the Procurement Act and the Fiscal Management and Accountability Act by the contract it has entered into for the production and supply of a new national identification card. No such breach has taken place.
There are other legitimate concerns over the decision to have a new national identification card with electronic features. Those concerns relate to the lack of public consultation and the strange, ongoing and one-sided relationship that has developed between Guyana and the United Arab Emirates (UAE) which facilitated the identification of the company who will produce the cards.
There has been no breach of the Procurement Act. The National Procurement and Tender Board Administration (NPTBA) has confirmed that it approved the sole-sourcing for the new identification cards. The Act vests the NPTBA with the authority to approve such sourcing of goods and services.
It is absolute astonishing that anyone should raise a red flag about the sole-sourcing of the production of national identification cards. The production of national identification cards – with or without special biometric and security electronic features – is a national security issue and therefore qualifies to be sole sourced.
The Attorney General is absolutely correct in asserting that the production of these cards is a national security issue and thus not necessarily subject to open sourcing. The security risks, including risks to personal privacy and the threat of cybercrimes is much too great for anything other than sole-sourcing for such identification cards.
Privacy is now a national security consideration. The World Bank has noted that the recording, storage, and use of sensitive personal data carry risks associated with privacy violations, data theft and misuse and identity fraud as well as threats from cybercrime. These new e-cards can be used to store not only biometric data but also medical and treatment histories. This further adds to the security concerns of any penetration or misuse of the data.
But it is precisely these considerations which make it necessary for there to have been widespread public consultations on the decision to go towards a new national identification card. The PPP/C government has behaved recklessly in this regard.
However, it cannot be accused of breaching the country’s procurement. The Procurement Act allows for sole-souring on national security grounds.
And it absolutely absurd for the contention to be made that no contract can be entered into by government unless the National Assembly has approved funding for such a contract. If this were so, it would mean that in the event of an emergency or because of unforeseen circumstances, the government would be unable to execute works which involve acquiring goods and services.
It is bewildering how anyone can conclude that Section 30 (1) the Fiscal Management and Accountability Act (FMAA) prohibits government from entering into a contract unless provision has been made for payment by the National Assembly. That Section of the FMAA deals with programmes for which there is an appropriation and it merely provides, and quite sensibly too, that before any procurement takes place in relation to a programme for which there has been an appropriation that the government should first ensure that there are sufficient funds remaining in the voted allocation for programme.
It constitutes some stretch of the imagination to infer that this places a prohibition on entering of contracts for which there has been no appropriation. And it is disappointing to learn that such inference has been made by persons who ought to know better.
There are other more solid grounds on which the new national identification card project can be criticized. First, as mentioned before, there is the issue of the total lack of public consultations on an issue of such sensitivity and security concerns. The public is bound to be wary of this new initiative which will allow for the capture, store and retrieval of personal information and over which they are ill-informed. In the absence of public consultations, the decision to move ahead reeks of recklessness.
Second, the role of the UAE in this project raises serious red flags. Jagdeo’s Middle Eastern diplomacy was an abject failure; and now it appears that this failure is being replaced by wholly lopsided relationship between the UAE and Guyana, one in which the UAE has managed to supply Guyana with vaccines, nailed a contract for the training of coders and now helped to facilitate a contract with a European firm for the supply of national identification cards. What is Guyana getting in return for forging such relations with the United Arab Emirates?
Guyanese should not reject the idea of a new e- identification card, as it is being called. But they should certainly demand widespread public consultations and call into question this cozy but lopsided relationship that is developing between Guyana and the United Arab Emirates.
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Bahamas
FINANCIAL secretary Simon Wilson said the government would finally begin publishing contract awards when the reporting capacity of its contract procurement system is improved.
The Public Procurement Act mandates the government disclose the name and address of winning contract bidders and the award amount within 60 days of the contract award, among other things.
The government has yet to comply with this provision. Last year the government launched the Go Bonfire Platform procurement portal.
“We’re working on that right now,” Mr Wilson told reporters yesterday.
“So, you know, the previous system we had did not keep good records. It’s a very old system. So, what we’re doing is we’re backfilling that information on the new Bonfire system to publish contracts and so forth.
“So, to be clear, all government contracts are public knowledge. Alright, so … we don’t have a black budget. So, if the government signs a contract, obviously the government wants you to know because this is the public’s money, alright, but it’s the reporting format that’s a challenge. So that’s what the issue is.”
The Public Procurement Bill 2022, which repeals and replaces the Public Procurement Act 2021, was passed in the House of Assembly last month.
Critics have repeatedly criticised the government for lacking transparency over procurement processes and awards.
In its 2022 Investment Climate Statement report on The Bahamas, the US Bureau of Economic and Affairs highlighted the problem.
“The government passed a Public Procurement Act and launched an e-procurement and suppliers registry system in 2021. While the registry system is in place, the Public Procurement Act has yet to be fully implemented. Companies complain that the tender process for public contracts is inconsistent, and allege it is difficult to obtain information on the status of bids,” the US agency said.
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