Probe of $100M in unused radios … Auditor General studies GECOM CEO’s response to findings

Jun 30, 2017 News, http://www.kaieteurnewsonline....esponse-to-findings/

More than eight months after State auditors launched a probe into several multimillion- dollar contracts of the Guyana Elections Commission (GECOM), a final report into the questionable acquisition of high frequency (HF) radios is almost completed.

Updating Kaieteur News yesterday, Auditor General Deodat Sharma disclosed that his office had sent a draft report to Chief Elections Officer (CEO), Keith Lowenfield, who has since responded to the findings, and this will be included in the final report.

Sharma declined to delve into details yesterday of the findings when questioned. He admitted that two other probes into the purchases of toners and pliers are ongoing.

However, knowledgeable officials have disclosed that the findings were serious enough to warrant further investigations.

The Office of the Auditor General descended on GECOM’s secretariat late last year after a series of articles by Kaieteur News painted a picture of significant corrupt practices with procurement at the entity that is tasked with managing elections.

Despite several glaring cases of procurement breaches, no action has been taken at GECOM level. Hundreds of millions of dollars in contracts were handed out in highly questionable circumstances.

Auditors were working at the GECOM’s High Street, Kingston office and other locations, perusing contracts and inventories, to the tune of hundreds of millions of dollars.

They would have been looking, especially, at spending by the entity for the May 2015 General and Regional Elections.

The probe by the AG office reportedly extended to expenditure for the 2016 Local Government Elections.

BREACHES
The auditors have reportedly found several cases of worrying  breaches of procurement procedures, excesses and wanton spending – in some cases items were purchased for four or five times the retail prices.

With GECOM in the spotlight over the selection of a new chairperson, following the departure of Dr. Steve Surujbally earlier this year, the Opposition especially has been calling for reforms.

GECOM is tasked with issuing National Identification Cards and overseeing general and local government elections in Guyana.

With regards to GECOM’s spending, from internal documents and those filed with the National Procurement and Tender Administration Board (NPTAB), GECOM reportedly deliberately bypassed established procedures of the state when it comes to using tax dollars to procure services and items.

At GECOM, the accounting officer who is responsible for spending is the CEO.

Auditors were said to be interested in the purchase of not only the high frequency radios, but also millions spent in toners for printers and photocopiers, and a quantity of pliers.

With regards to the radios, weeks before the May 2015 elections, GECOM’s secretariat made a case for the purchase 50 High Frequency radios for use during the elections.

Because of the emergency nature, the purchase was approved by the then-Cabinet, under former President Donald Ramotar.

FAKE QUOTATION
There were several things wrong with the purchase of those radios.
One prominent company, Massy Technologies Guyana Limited, denied that it ever submitted a quotation for supply the radios. Somebody submitted the fake quotation and GECOM’s senior officials accepted it.

The communication radio sets were outdated and came too late for them to be deployed in time for the May 11th, 2015 elections. As part of the requirements, staffers would have had to be trained in the usage. Also there would not have been enough time for the equipment, along with accessories such as batteries, antennas and connections, to be installed. There were no indications that warranties were issued.

According to GECOM tender documents seen by Kaieteur News, there were three quotations- Mobile Authority, Massy Technologies and Advanced Office Systems Inc.

The one from Massy Technologies was a strange one that was bound to be red-flagged by auditors.

In the first instance, it was dated April 21, 2014 – one year before GECOM went out to buy them. The quotation was only valid for one month, yet was accepted.

GECOM reportedly asked for Barrett radios, which are manufactured by an Australian-owned company. The local authorised dealer for Barrett is Advanced Office Systems Inc., one of the companies that tendered but was ignored.

CEO Lowenfield, on April 23, 2015, wrote the National Procurement and Tender Administration Board (NPTAB) making a case for the radio purchases.

He said that the radios were urgently needed to help GECOM communicate with its staffers who are working in outlying areas that had no telephone services.

The contract for the radios was awarded to Mobile Authority, a company owned by Water Street businessman, Michael Brasse.
Brasse and his brother appeared to be preferred suppliers to GECOM for all almost everything.

According to Government figures, the Brasse brothers were awarded at least 40 percent of the total contracts paid out by GECOM in 2015.
There also appeared to be evidence that GECOM conducted contract-splitting to hide a number of questionable purchases from the Cabinet.

Among some of the purchases were pliers, Duracell batteries, toners and even office equipment.

INFLATED PRICES
In almost all the cases, there was evidence that the prices were highly inflated, as in the case of the radios.

Some of the radios supplied by Brasse at the time were retailing for $300,000. Yet GECOM paid on average $2M apiece. Former GECOM Chairman, Dr. Surujbally had emphasised that it was the Secretariat that handled purchasing of items and services.

The glaring breaches were not for the radios alone. According to official figures of contracts awarded in 2015, there were two payments for Duracell batteries by GECOM. One contract was awarded on April 23, 2015, about three weeks before the elections, for $14,529,000. This contract was awarded to Mobile Authority, a business also owned by Brasse. There was another contract awarded to the same entity for $9,180,518 on May 21, 2015, making it a total of $23,709,518 paid for Duracell batteries in 2015.

With regards to the contract date of May 21, the big question according to GECOM officials was, ‘Why would the entity want to enter into a contract for the batteries after the elections?’

GECOM was left with several boxes of the Duracell batteries delivered by Brasse.

Investigations by Kaieteur News revealed that GECOM and taxpayers paid millions of dollars more for those batteries than what they could have been acquired for.

Three weeks prior to the election, the entity doled out $14.8M for the purchase of nippers/pliers from a King Street, Lacytown business called Standard Distributors. The owner is the brother of Brasse.

It appeared that GECOM paid out an average of $6,000 apiece for those pliers when they could have been acquired on the local market for $600. It was not even a familiar brand.

Michael Brasse’s Mobile Authority, M-Tech Business Solutions and Mibra Trading received up to $290M in contracts in 2015.

GECOM, tasked with running elections in Guyana, had refused to respond to the charges of irregularities, saying that there is an active investigation by state auditors.

The revelations would continue to rock GECOM which until now has been doing well to keep a tight rein on its inner workings.