Public Accounts Committee alleges DEHS fraud

Thu, Jan 26th 2012, 08:43 AM

Contractors hired by the Department of Environmental Health Services (DEHS) to construct 18 landfills were overpaid by as much as $700,000, according to testimony given to the Public Accounts Committee (PAC) of the House of Assembly.
The revelation was made by Auditor General Terrance Bastian to the committee in June and July 2011, PAC Chairman Dr. Bernard Nottage told members of Parliament yesterday.
After his probe into the department's accounts, Bastian concluded that there must have been some "collusion" between employees at the department and the contractors involved.
The auditor general also claimed that some degree of "fraud" took place, according to the report.
The contracts were awarded for a $33.5 million Solid Waste Management Program to develop 18 landfills in 10 Family Islands in late 1999. At the end of the project, only 14 landfills were finished, Dr. Nottage said.
The work was funded by a $23.5 million loan from the Inter-American Development Bank (IDB) in October 1999, and an injection of $10 million from government.
"The Department of Environmental Health Services had commissioned two engineering firms (The Engineering Group and Shepard U Management) to conduct a review of the project to determine whether the government had received value for the public funds expended," Nottage said.
"The engineering company concluded that there has been a large disparity between what should have been paid out and what had in fact been paid out. The firms also determined that there had been overpayments to the contractors to the tune of $600,000 to $700,000," Nottage said.
Bastian recommended that the police investigate the matter, however it is unclear if such an investigation took place. Attempts to reach the auditor general for comment were unsuccessful yesterday.
Nottage said the auditor general found that DEHS took on too many projects at once and did not have enough employees to oversee the work.
"This inadequacy resulted in a complete breakdown of internal controls," Nottage said.
The findings were also in the auditor general's 2009 report, the most recent one that was tabled in the House, Nottage said.
The auditor general also found, during his department's review of local government recurrent accounts in Exuma and Spanish Wells, Eleuthera that officials in those communities did not adhere to strict rules.
Bastian also told the PAC that there was an absence of accountability when it came to local government accounting.
"[The auditor general's] department was continously emphasizing to local government officials the importance of following the financial procedures that were in place," Nottage said.
The Bain and Grants Town MP also revealed that 32 homeowners are owed stamp duty refunds in the combined amount of $80,926.
Nottage said there is nothing in the law which allows for the homeowners to receive their money back and recommended that government draft legislation to address their plight.
The PAC is a sessional committee of the House that is appointed at the start of each new session of Parliament.
Nottage, Pineridge MP Kwasi Thompson, St. Thomas More MP Frank Smith, Clifton MP Kendal Wright and Elizabeth MP Ryan Pinder are on the committee.
The committee's role is to examine public expenditure to ensure it is not wasted.

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