PAC hears Auditor General’s report on ‘contract splitting racket’ at GECOM

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A racket uncovered by the Auditor General in 2015 on Monday attracted the attention of the Public Accounts Committee (PAC) of the Parliament but the legislators were left with unanswered questions since Chief Executive Officer (CEO) of the Guyana Elections Commission (GECOM), Keith Lowenfield, opted to await findings of a special investigation before making any further pronouncements.
GECOM CEO Keith Lowenfield
The Auditor General had found that nine contracts had been awarded to a single supplier to the tune $82.1M for the purchase of toners and cartridges.

Each of the contracts was found to have been split to below $15M in order to avoid any Cabinet scrutiny.
According to the Auditor General, the Procurement Act dictates that Cabinet shall have the right to review all procurements, the value of which exceeds $15 million.

The Act further dictates that a procuring entity – such as GECOM – shall not split or cause to split contracts or divide or cause to divide its procurement into separate contracts where the sole purpose for doing so is to avoid the application of any provision of the Act or any regulations made.
The contracts were awarded to the same local supplier between February and May of 2015 with the highest amount being for $14.8 million and the lowest being for $1.9 million.

According to the Auditor General, “the contract awards appeared to be sub-divided, which breached the Procurement Act regarding splitting of contracts and review by Cabinet.”

He said “At the time of reporting in September 2016 the Audit Office was conducting further investigations into this matter.”
The Committee heard that on a day in February 2015 four contracts were inked for the supply of the same materials on the same day.

GECOM’s Lowenfield attempted to explain that the materials were needed for the 2015 General Elections.
PAC Chairman, Irfaan Ali took umbrage to this position saying this could not be the case since contracts were issued in February and several contracts were inked at least 10 days after the elections.
Ali explained to the GECOM CEO that the Auditor General, “is saying it is clear there was an intentional split to escape the level of scrutiny by Cabinet …what is the explanation to go nine times to the same contractor, do you see what is wrong here.”
The GECOM CEO told the Committee that permission had been sought from the National Procurement and Tender Administration Board.
The contracts were for the supply of toner cartridges, stationary and ink.
According to the Auditor General’s findings, GECOM in 2015 spent $197.9M for office materials and supplies and included in this sum were amounts totalling $82.2M which represented full payment on nine contracts awarded to the same supplier for the purchase of toners and cartridges.
The investigations are ongoing into the transactions.

Lowenfield on Monday reminded the Committee of the investigation and said the Commission is awaiting the findings of that special investigation by the Auditor General’s Office.
Another bone of contention raised with Lowenfield was the commission’s decision to pay $6,000 for a pair of pliers—available locally at astronomically cheaper prices.

In late April 2015, three weeks prior to the May 11th General and Regional Elections, the entity doled out $14.8M for the purchase of pliers from Standard Distributors.  
Lowenfield defended the purchases and pointed to the bids received when the entity went to tender.
Meanwhile an audit is currently underway to probe a major contract to Michael Brasse for a $100M purchase of high frequency communications radio sets for the May 11 elections.

The sets, from all indications, were never used and there are questions about the urgent reasons advanced by GECOM for those radios in the first place.

Monetary allocations

Another of the queries raised by the Auditor General and raised by the Public Accounts Committee on Monday was the manner with which the monies allocated to that entity are being used.
It was found that the entity was allocated $235M for the Commission, $220M of which was supposed to have been used for GECOM’s administration.
It was explained to the committee that permission was sought from Cabinet in order to authorize the use of money allocated for one purpose to be used for another.
Other instances to attract the scrutiny of the PAC related to over-payment to contractors, a failure to complete filing financial returns, a failure to present vouchers for scrutiny, the matter of the stolen digital cameras from the entity’s Colindgen, warehouse, the $30M purchase of Polaroid film from Acme Photo Studio, among others. 

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