Deficient Practices

Auditor general criticises Ministry of Education's procurement management

BY BALFORD HENRY
Senior staff reporter
balfordh@jamaica

Wednesday, July 24, 2019

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A performance audit Report (PAR) from the Auditor General's Department (AuGD) has categorised procurement management at the Ministry of Education Youth and Information (MoEYI) as deficient.

Auditor General Pamela Monroe Ellis said that the audit focused primarily on expenditure relating to the purchase of textbooks, school furniture and the repair, maintenance and construction of school facilities for the five-year period 2013/14 to 2017/18, which would have spanned the last three years of the former administration and the first two years of the current administration.

Monroe Ellis said that the audit concluded that the ministry's procurement activities did not always conform with good practices over the period, including proper oversight of planning processes in accordance with fiduciary responsibilities to prevent misuse of Government funds and facilitate achievement of value for money.

“MoEYI often utilised direct and emergency procurements for school constructions and repairs, which under many circumstances did not constitute emergencies and provided no assurance of cost-effectiveness,” she said in her overview of the situation for the years which were reviewed.

She added that the ministry was also deficient in monitoring the distribution of textbooks and furniture to schools, which prevented it from reducing waste and maximising efforts to secure greater value from these expenditures.

The report said that the ministry utilised direct procurements to engage contractors to construct classrooms at six schools. In seeking approval for the direct method, the ministry explained that the works were not conducted as originally planned, and it was faced with the prospect of losing the funds if not utilised or committed before the end of the financial year.

“Based on its operational and procurement plans, the MoEYI had identified the need to conduct the maintenance, repairs and construction works; however, the MoEYI's failure to put the plan in action in a timely manner resulted in it resorting to last-minute procurements,” the report revealed.

“In planning for major repairs and constructions, to allow for the completion of works in time for the start of the school year, we expected the MoEYI to take into consideration the required lead times for each step: preparation, bidding, evaluation and contracting. However, the MoEYI was deficient in this basic approach, as it did not comply with the procurement guidelines,” the report stated.

“The ministry did not demonstrate that the procurement process was fair and transparent, particularly where it signed six contracts with the same contractor on the same date, which could suggest splintering,” it added.

Additionally, the report said that the audit found that for 13 other contracts, each valued in excess of $10 million, “increased scope of work” was the dominant factor accounting for a combined $32 million in excess expenditure. Further, the National Contracts Commission (NCC) advised that it would not endorse any further requests for the direct contracting for the construction of classrooms using modular systems of construction, without the benefit of a competitive bidding process.

The report also criticised the ministry entering into design-and-build contracts with the Caribbean Maritime University (CMU) for construction work at nine schools without following required control and due diligence procedures to enable receipt of value for money.

It said that the ministry bypassed the due diligence of the Procurement Committee and further breached the procurement guideline by its failure to obtain the approval of the NCC for seven of the contracts, based on the values, earlier this month.

“We found no evidence of a framework agreement or memorandum of understanding, which should establish a formal relationship between the MoEYI and CMU for the design-and-build construction works or evidence of negotiation to arrive at the best prices,” the auditor general said.

“This may have contributed to the CMU not obtaining approval from the MoEYI to carry out variation works. All the construction works exceeded the contractual deadline. MoEYI provided a practical completion certificate for only one contract. The remaining eight are yet to be completed,” she added.

She said that the records at CMU did not readily allow her department to determine how the monies were spent under the various projects, and its request of the CMU to disaggregate the expenditure has not yet been met.

“This matter will be pursued and addressed further in our audit report on the special investigation of CMU,” she said.

The AuG also made three recommendations, that:

(1) The ministry should put the necessary systems in place to anticipate and plan the related activities to ensure timely execution of the procurement process to enable completion of the works in time for the new school year;

(2 ) The ministry must urgently put in place appropriate systems to enable better coordination between procurement and stock management, to facilitate timely planning for contract awards to benefit from greater economic savings through competitive bidding; and

(3) To facilite a better distribution of textbooks and school furniture, the ministry should develop an inventory system to identify over and under supplies, to allow for redistribution. The ministry should consider providing the Media Services Unit with the necessary resources to undertake timely audits with a wider scope.


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