{"id":22208,"date":"2022-05-19T22:29:54","date_gmt":"2022-05-20T03:29:54","guid":{"rendered":"https:\/\/projectcalls.com\/dev?p=22208"},"modified":"2022-05-19T14:52:01","modified_gmt":"2022-05-19T19:52:01","slug":"collusion-and-corruption-wsc-internal-audit-reveals-red-flags-and-risky-management","status":"publish","type":"post","link":"https:\/\/projectcalls.com\/dev\/collusion-and-corruption-wsc-internal-audit-reveals-red-flags-and-risky-management\/","title":{"rendered":"COLLUSION AND CORRUPTION: WSC internal audit reveals red flags and risky management"},"content":{"rendered":"

Bahamas<\/p>\n

A special investigation from the Internal Control and Compliance Division at the Water and Sewerage Corporation has revealed \u201chigh-level corrupt transactions\u201d regarding multiple projects and accuses a former executive member of conflict of interest and fraud.<\/p>\n

The special investigation is a part of an ongoing probe into the issuance of contracts and management of the corporation under the previous Minnis administration.<\/p>\n

It is also a part of a larger audit of services contracts at WSC, from vender engagements in excess of $250,000.<\/p>\n

The report, which was completed on March 18, 2022, and viewed by Eyewitness News, identifies two \u201cred-flagged projects\u201d that were of material value and required minister approval, but no such approval existed in the records of the board meetings.\u00a0<\/span><\/p>\n

Those projects included the Water Tanks Painting Phase 1 at the Corporation\u2019s Blue Hills Low Level and Windsor Storage Tanks Facilities and the Painting of the E. George Moss Building and Somerset Housing Building on University Drive.\u00a0<\/span><\/p>\n

\u201cThis special investigation unveiled apparent conflict of interest, lack of due diligence, and poor professional judgment on the part of the former Board and former General Manager Elwood Donaldson in their respective capacities,\u201d the report read.<\/p>\n

\u201cIn addition, the evidence persuaded the auditors that there were high-level corrupt transactions that caused significant financial losses to the corporation under the direction of the former board and the former general manager, possibly motivated by self-interest, financial gain, or fraud.\u201d<\/p>\n

The report documented \u201csignificant irregularities\u201d in the project initiation, project management, and payment process.\u00a0<\/span><\/p>\n

It further exposed \u201cgross mismanagement in the valuation, supervision and inspection\u201d of projects by the Board of Directors; along with \u201cincompetence\u201d in the procurement of the project costs estimates by the board and general manager.<\/p>\n

Additional revelations from the special investigation showed a \u201cviolation of trust\u201d by the board and the general manager in allegedly disclosing the competitive tender cost of the lowest bidder to favored vendors believed to be related to the parties.<\/p>\n

GOVERNANCE OF BOARD\u00a0<\/span><\/strong><\/p>\n

The report noted that there was a \u201chigh risk\u201d that there were offenses contrary to the Prevention of Bribery Act that warrants an investigation into the beneficial owners of the companies of interest and whether the board of directors or general manager gained possession of pecuniary resources inconsistent with the income resources at or around the time of the project approval and throughout the project life.\u00a0<\/span><\/p>\n

As for the overall governance of the corporation, the special investigation revealed that board resolutions were inadequate and missing in many instances.\u00a0<\/span><\/p>\n

\u201cBoard meetings, the quorum for voting, and board meeting attendance records were missing or not kept\u201d.\u00a0<\/span><\/p>\n

The report pointed out that Donaldson had previously held the position of Senior Assistant General Manager of Internal Controls and Compliance and would have been fully aware of proper policies and procedures.<\/p>\n

\u201cNotwithstanding this knowledge and experience, the General Manager directly instructed acts to be performed that were contrary to the established internal controls safeguards,\u201d it read.<\/p>\n

\n
<\/div>\n<\/div>\n

\u201cThe audit evidence was sufficiently persuasive to enable the auditors to draw conclusions of fiduciary breached, undue influence adverse to finances to the corporation and gross indifference to conflict of interest and the appearance of profit sharing or even fraud\u201d.<\/p>\n

Additionally, the report noted that while references were made to board resolution in secretary certificates, those certificates failed to name the board member that was present when the resolution was passed and failed to attach certificates for the named projects.\u00a0<\/span><\/p>\n

\u201cHigh risk of fraud and high suspicion of fraud in the preparation of the subject secretary certificates arise,\u201d it read.<\/p>\n

RECOMMENDATIONS\u00a0<\/span><\/strong>\u00a0<\/span><\/p>\n

The report concluded with recommendations for corrective action with the corporation including internal and an external investigation into certain companies.<\/p>\n

Its internal recommendations suggested that \u201cExecutives and Management make a declaration of any related party transaction based on their role at any given time for works and parent processing approvals\u201d.\u00a0<\/span><\/p>\n

The auditors recommended improvements to the internal controls, including ensuring that tax compliance requirements be completely satisfied before any payments are made to vendors.<\/p>\n

The report revealed that Adams Landscaping, General Maintenance, and Elite Maintenance received contracts in excess of $100,000 in June 2020 while being a non-VAT Registrant.<\/p>\n

The external recommendations included a need for an investigation to be conducted into the vendors Baha Maintenance & Restoration, Adams Landscaping, General Maintenance, Baha Maintenance & Restoration, and Elite Maintenance Incorporated Ltd.\u00a0<\/span><\/p>\n

The report also recommended that there be better documentation and filing of Board Minutes as per stipulated guidelines, which could include Water Storage Tank Management Files being created to keep track of maintenance of the equipment, which should become more periodic to prevent corrosion and reduce excessive costs.\u00a0<\/span><\/p>\n

Upon coming to office, the Davis administration advised that all government agencies and corporations were undergoing investigations.\u00a0<\/span><\/p>\n

Allegations against former WSC Executive Chairman Adrian Gibson\u00a0suggested<\/a>\u00a0that Elite Maintenance Incorporated Ltd \u2014 a company purportedly co-owned by his former fianc\u00e9e \u2014 received a series of payments from WSC totaling over $500,000 between November 2018 and January 2021.<\/p>\n

In October, Prime Minister Philip Brave Davis indicated there is enough information in the public domain to \u201cwarrant an investigation\u201d into contracts issued at corporations.\u00a0<\/span><\/p>\n

Water and Sewerage Corporation (WSC) General Manager Elwood Donaldson was been placed on leave amidst ongoing investigations at the corporation in December.<\/p>\n

Eyewitness News<\/em>\u00a0reported that police officers were on-site to oversee Donaldson\u2019s exit from the property.\u00a0<\/span><\/p>\n

more\u00a0<\/a><\/p>\n

\u00a0<\/p>\n

image: audit-g8faaf0f23_1280<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Bahamas A special investigation from the Internal Control and Compliance Division at the Water and Sewerage Corporation has revealed \u201chigh-level corrupt transactions\u201d regarding multiple projects and accuses a former executive…<\/p>\n","protected":false},"author":1091,"featured_media":19888,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[250],"tags":[157,166],"class_list":["post-22208","post","type-post","status-publish","format-standard","has-post-thumbnail","category-articles","tag-anti-corruption","tag-bahamas"],"aioseo_notices":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2021\/12\/audit-g8faaf0f23_1280-e1644524531624.jpg?fit=1025%2C678&ssl=1","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p6u9Qa-5Mc","jetpack_likes_enabled":true,"jetpack-related-posts":[{"id":6128,"url":"https:\/\/projectcalls.com\/dev\/criminal-charges-expected-after-wsc-audit\/","url_meta":{"origin":22208,"position":0},"title":"Criminal Charges Expected After WSC Audit","author":"Michele Marius","date":"July 5, 2018","format":false,"excerpt":"The Board of the Water and Sewerage Corporation has decided to bring criminal charges against certain individuals in the wake of a Forensic Audit \u00a0 that found what its Chairman termed tendering and procurement irregularities, suspected misappropriation of assets and questionable undertakings. With an update in the House of Assembly\u2026","rel":"","context":"In "News\/Developments"","block_context":{"text":"News\/Developments","link":"https:\/\/projectcalls.com\/dev\/category\/newsdevelopments\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2018\/05\/Handcuffs-Trouble-Police-Arrest-Offender-3839153-Pixabay.jpg?fit=1024%2C576&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2018\/05\/Handcuffs-Trouble-Police-Arrest-Offender-3839153-Pixabay.jpg?fit=1024%2C576&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2018\/05\/Handcuffs-Trouble-Police-Arrest-Offender-3839153-Pixabay.jpg?fit=1024%2C576&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2018\/05\/Handcuffs-Trouble-Police-Arrest-Offender-3839153-Pixabay.jpg?fit=1024%2C576&ssl=1&resize=700%2C400 2x"},"classes":[]},{"id":19365,"url":"https:\/\/projectcalls.com\/dev\/bpl-report-pos-worth-millions-lacking-documentation-approval-signatures\/","url_meta":{"origin":22208,"position":1},"title":"BPL REPORT: POs worth millions lacking documentation, approval signatures","author":"Mayra Bonilla Lopez","date":"November 18, 2021","format":false,"excerpt":"Bahamas \u00a0 An audit of Bahamas Power and Light (BPL) revealed at least one purchase order (PO) to the tune of nearly a quarter of a million dollars was not signed off on by the CEO or chairman, and another $1.3 million purchase order that had the chairman\u2019s signature, but\u2026","rel":"","context":"In "Articles"","block_context":{"text":"Articles","link":"https:\/\/projectcalls.com\/dev\/category\/articles\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2021\/11\/pexels-karolina-grabowska-5387261-scaled-e1637173511783.jpg?fit=1200%2C1097&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2021\/11\/pexels-karolina-grabowska-5387261-scaled-e1637173511783.jpg?fit=1200%2C1097&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2021\/11\/pexels-karolina-grabowska-5387261-scaled-e1637173511783.jpg?fit=1200%2C1097&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2021\/11\/pexels-karolina-grabowska-5387261-scaled-e1637173511783.jpg?fit=1200%2C1097&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2021\/11\/pexels-karolina-grabowska-5387261-scaled-e1637173511783.jpg?fit=1200%2C1097&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":29959,"url":"https:\/\/projectcalls.com\/dev\/enact-anti-corruption-legislation-fnm-says\/","url_meta":{"origin":22208,"position":2},"title":"Enact anti-corruption legislation, FNM Says","author":"Mayra Bonilla Lopez","date":"September 14, 2023","format":false,"excerpt":"Bahamas Free National Movement leader Michael Pintard said the Davis administration should enact a suite of anti-corruption legislation, including a Public Anti-Corruption Act, a Public Officials Code of Conduct Act and an Integrity Commissions Act. \u201cThe Integrity Commission would be an independent body fully empowered to investigate, report on, and\u2026","rel":"","context":"In "Articles"","block_context":{"text":"Articles","link":"https:\/\/projectcalls.com\/dev\/category\/articles\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2023\/08\/pexels-towfiqu-barbhuiya-8693379-scaled-e1691084649258.jpg?fit=1024%2C683&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2023\/08\/pexels-towfiqu-barbhuiya-8693379-scaled-e1691084649258.jpg?fit=1024%2C683&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2023\/08\/pexels-towfiqu-barbhuiya-8693379-scaled-e1691084649258.jpg?fit=1024%2C683&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2023\/08\/pexels-towfiqu-barbhuiya-8693379-scaled-e1691084649258.jpg?fit=1024%2C683&ssl=1&resize=700%2C400 2x"},"classes":[]},{"id":20919,"url":"https:\/\/projectcalls.com\/dev\/top-us-trade-body-singles-out-bribes-of-convenience\/","url_meta":{"origin":22208,"position":3},"title":"Top US Trade Body Singles Out \u2018Bribes Of Convenience\u2019","author":"Mayra Bonilla Lopez","date":"February 24, 2022","format":false,"excerpt":"Bahamas \u00a0 The Bahamian political system is \u201cbeleaguered by reports of corruption\u201d, a newly-released US government report has asserted, singling out what it labelled as \u201csmall scale \u2018bribes of convenience\u2019\u201d. The US Trade Representative\u2019s Office, in its latest report on The Bahamas and other Caribbean nations that benefit from the\u2026","rel":"","context":"In "Articles"","block_context":{"text":"Articles","link":"https:\/\/projectcalls.com\/dev\/category\/articles\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2021\/05\/pexels-rodnae-productions-7841451-scaled-e1645731888257.jpg?fit=1024%2C683&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2021\/05\/pexels-rodnae-productions-7841451-scaled-e1645731888257.jpg?fit=1024%2C683&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2021\/05\/pexels-rodnae-productions-7841451-scaled-e1645731888257.jpg?fit=1024%2C683&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2021\/05\/pexels-rodnae-productions-7841451-scaled-e1645731888257.jpg?fit=1024%2C683&ssl=1&resize=700%2C400 2x"},"classes":[]},{"id":37403,"url":"https:\/\/projectcalls.com\/dev\/special-audit-uncovers-inconsistencies-in-transcore-latam-contract\/","url_meta":{"origin":22208,"position":4},"title":"Special audit uncovers inconsistencies in TRANSCORE LATAM contract","author":"Mayra Bonilla Lopez","date":"November 28, 2024","format":false,"excerpt":"Dominica The modernization contract for the traffic light network in Greater Santo Domingo, managed by Transcore Latam SRL, saw its cost rise from 1,200 million pesos to 1,317 million pesos. 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Auditor General Reveals His Request For Beneficial Owners List Still Pending","author":"Mayra Bonilla Lopez","date":"September 14, 2021","format":false,"excerpt":"Bahamas The Government has failed to meet the Auditor General\u2019s demand to provide ownership details on all the companies awarded COVID-related contracts despite this being deemed \u201cpivotal\u201d to good governance. The revelation, contained in the Office of the Auditor General\u2019s report on how the Government used the proceeds from last\u2026","rel":"","context":"In "Articles"","block_context":{"text":"Articles","link":"https:\/\/projectcalls.com\/dev\/category\/articles\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2021\/09\/pexels-thirdman-8470057-scaled.jpg?fit=1200%2C800&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2021\/09\/pexels-thirdman-8470057-scaled.jpg?fit=1200%2C800&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2021\/09\/pexels-thirdman-8470057-scaled.jpg?fit=1200%2C800&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2021\/09\/pexels-thirdman-8470057-scaled.jpg?fit=1200%2C800&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/projectcalls.com\/dev\/wp-content\/uploads\/2021\/09\/pexels-thirdman-8470057-scaled.jpg?fit=1200%2C800&ssl=1&resize=1050%2C600 3x"},"classes":[]}],"_links":{"self":[{"href":"https:\/\/projectcalls.com\/dev\/wp-json\/wp\/v2\/posts\/22208","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/projectcalls.com\/dev\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/projectcalls.com\/dev\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/projectcalls.com\/dev\/wp-json\/wp\/v2\/users\/1091"}],"replies":[{"embeddable":true,"href":"https:\/\/projectcalls.com\/dev\/wp-json\/wp\/v2\/comments?post=22208"}],"version-history":[{"count":3,"href":"https:\/\/projectcalls.com\/dev\/wp-json\/wp\/v2\/posts\/22208\/revisions"}],"predecessor-version":[{"id":22222,"href":"https:\/\/projectcalls.com\/dev\/wp-json\/wp\/v2\/posts\/22208\/revisions\/22222"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/projectcalls.com\/dev\/wp-json\/wp\/v2\/media\/19888"}],"wp:attachment":[{"href":"https:\/\/projectcalls.com\/dev\/wp-json\/wp\/v2\/media?parent=22208"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/projectcalls.com\/dev\/wp-json\/wp\/v2\/categories?post=22208"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/projectcalls.com\/dev\/wp-json\/wp\/v2\/tags?post=22208"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}