A report of the auditor general on the Christie administration's Urban Renewal Small Home Repairs (SHR) program reveals that contractors were not required to have proof of all-risk insurance. The report says contractors were only required to have proof of national insurance contributions paid and a valid business license. It says contractors were not required to submit credit and banking references; sales references from building suppliers; proof of building permit numbers and photos of last buildings constructed or repaired.
"On reviewing business licenses of contractors who were awarded contracts in phase one, we noted that in most instances the licenses were granted just prior to the award of the contracts and that the nature of business generally indicated on the license was usually general maintenance or landscaping services," the report says."Based on the information provided, we were unable to attest to their technical competency as it relates to building construction."
The report says based on those observations, the potential risks presented "were extremely high". It said that during the review, it was discovered that the "necessary controls for issuing contracts were not in place". The report said contracts issued were not pre-numbered.
"The absence of pre-numbered contracts does not reflect an objective view," the report said. "It represents a lack of transparency and accountability."
The report also said that contracts were not recorded in a register to show "who actually issued the contracts or the officer assigned to ensure that repairs were satisfactorily completed".
The auditor general recommended that a register be implemented to record each pre-numbered contract issued to "enhance the audit trail". It didn't end there. The report also said while examining the contracts it was observed that some were not dated; there was no seal affixed to some to show authenticity; a date stamp was not always used nor did it always accompany a signature, and contracts used were not standard as there were two different versions of them.
"We recommend that due diligence be taken in regard to the contract execution," the report said. "All contracts should be dated to reflect proof of when the contract was initially signed. Seals should always be affixed to the contract document for authenticity and management should utilize the commission's rubber stamp."
The auditor general also found that in the accounting files for the contracts the permanent secretary's signature was not always seen on the request for payment.
According to the audit, phase one of the SHR program, managed by the Urban Renewal Commission (URC), began in November 2013. A total of 312 homes were repaired during this phase at a cost of $3.2 million, the report said. The audit covers the period July 1, 2012 to September 30, 2014. The auditor general surveyed 75 homes for the audit.
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