In the wake of financial discrepancies and breaches highlighted in the 2019 Auditor General’s report concerning the Maritime Administration Department (MARAD), significant measures have been taken to address the issues and strengthen internal controls.
The 2019 Auditor General’s report raised concerns about financial missteps at MARAD, which was then under the purview of the Ministry of Public Infrastructure. During a parliamentary review conducted by the Public Accounts Committee, Vladim Persaud, the current Permanent Secretary of the ministry, disclosed the outcomes of internal investigations and the consequent disciplinary actions taken.
One of the key concerns highlighted was the procurement of spares for vessels in March 2019. The Auditor General’s report revealed that the entire contract sum, amounting to $351.3 million, was paid to the supplier. Subsequently, the National Procurement and Tender Administration Board (NPTAB) approved a variation in July 2019, increasing the total contract sum to $751.5 million. This variation represented an alarming 114% increase over the initial contract sum. Of note, the supplementary contract specified that only 80% of the contract sum should be paid upon signing, while the entire sum was disbursed, thus constituting a violation of the payment terms. Moreover, the contractor failed to furnish a required bank guarantee, as mandated by the contract terms.
The internal review conducted by MARAD also uncovered additional discrepancies, prompting the implementation of disciplinary actions.
In response to these issues, the ministry has embarked on an endeavor to restructure the procurement processes to align with national procurement standards and legal requirements. Persaud highlighted the need to harmonize the ministry’s procurement procedures with those prescribed by law.
Additionally, there has been a change in MARAD’s Board of Directors, as it is believed that such lapses could not have transpired without their awareness or involvement.
Although the past cannot be altered, the ministry has taken proactive steps to fortify internal controls, particularly in the realm of procurement protocols, with the aim of averting future occurrences of financial breaches.
Notably, there have been positive developments in recent times. In a recent handover of the 2022 Auditor General’s Report to the Speaker of the National Assembly, Manzoor Nadir, the Auditor General General Deodat Sharma reported that, for the first time, most of the overpayments previously identified have been refunded.
Furthermore, the Auditor General observed a reduction in the number of contract overpayments recorded in the 2021 report, indicating the initial impact of the strengthened internal controls and rectification efforts.
