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AG raps govt ministries for failing to oversee delivery of procured assets

The Auditor-General (AG), Mildred Chiri, has rapped several government ministries for failing to supervise the delivery of assets they had paid for, as the contracted suppliers failed to fulfill their contractual obligations.

This trend, said the AG, has negatively impacted the ministries in carrying out their mandate as there was a shortage of motor vehicles and tools of trade.

In the AG’s 2020 report for Appropriation Accounts, Finance Accounts, Revenue Statements and Fund Account, Chiri flagged the non-delivery of procured assets to some government ministries as a cause of concern and advised these authorities to make follow-ups on the outstanding deliveries.  

“Assets comprising 30 motor vehicles worth $117 042 902 that were purchased by three Ministries in 2020 had not been delivered by September 2021,” she said.

“24 motor vehicles were for the Ministry of Information, Publicity and Broadcasting Services, three motor vehicles were for the Ministry of National Housing and Social Amenities whilst three other vehicles were for the Ministry of Justice, Legal and Parliamentary Affairs.”

“The Ministry of Youth, Sport, Arts and Recreation had also not taken delivery of two motor vehicles purchased in 2017. This issue was also raised in the 2019 audit report. The Ministry of Environment, Climate Change, Tourism and Hospitality Industry had not taken delivery of 13 laptops, 13 Samsung Galaxy Tablets, 50 school desks and chairs amounting to $2 976 472 purchased in 2020.”

The Ministry of Primary and Secondary Education had also not taken delivery of 260 blankets and kitchen utensils procured for the refurbishment of teachers’ hostels.

“Failure by paid contracted suppliers to fulfil their contractual obligations is a cause for concern. This trend has negatively impacted the Ministries in carrying out their mandate as there was a shortage of motor vehicles and tools of trade. Follow-ups should be made on the outstanding deliveries,” said the AG.

For instance, the AG noted how on October 20, 2020, the Ministry of Primary and Secondary Education entered into a contract with Michmart Investments (Pvt) Ltd for the supply and delivery of linen and kitchen utensils for the refurbishment of teacher’s hostels at the Curriculum Development Unit.

Her inspection of the Contract performance on May 31, 2021 revealed the contractor had not supplied 270 three quarter blankets valued at $695 588 and six swivel chairs valued at $257 625 at the time of her audit.

“The contractor delivered 10 wooden tables measuring 1.8 metres long instead of the 10 -three metres long ones specified in the Contract Agreement and the Ministry treated the delivery as in order. Two executive tables measuring three metres indicated as delivered on December 2, 2020 could not be located,” said the AG.

No asset register was being maintained at the location to assist in the identification of the assets and Chiri indicated the above could have been a result of lack of management supervision, as there was no indication that checks had been done by any other official beyond receipt of the goods.

“Furthermore, the Ministry entered into a contract with Gatestone Investments (Pvt) Ltd for the supply and delivery of linen and kitchen utensils for the refurbishment of teacher’s hostels at the Curriculum Development Unit and Technical Services Department. My inspection of the Contract performance on May 31, 2021, revealed that out of the Contract Price of $5 651 540, goods valued at $2 844 900 had not been delivered despite the estimated delivery lead-time being two weeks from the date of signing the contract,” read the report.

“There was no evidence the Contractor had communicated with the Ministry to relay any challenges confronted, and there was also no evidence of any inquiries from the Ministry to clarify the cause of the delay.”

The AG noted the longer it took for a contractor to deliver, the more the chances of failure to do so.

“In cases of price increases, the Ministry may then be requested to meet extra costs due to price variation. The Ministry could have been short changed as it paid more for less. The tables may not have been received at all or incorrect tables may be delivered if no checks are done upon delivery,” Chiri said.

Chiri recommended that the education ministry proceed in terms of the provisions of Section 87 of the Public Procurement and Disposal of Public Assets Act (Chapter 22:23), which gives the Ministry an option to terminate the contract and the procurement of replacement performance where non-performance is an issue.

“The Ministry should investigate and establish whether the tables were delivered and if delivered their whereabouts. The Ministry should validate the correctness of items upon delivery,” said the AG.

The education ministry’s response, as highlighted in the AG report, was to follow up with the contractor, who indicated that prices had gone up and had the intention to request for price variation, which they did not do.

“The Ministry is going to engage the contractor in view of terminating the contract and progress will be submitted to Auditors,” read the AG’s report.

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