Staff fired & ‘internal controls’ strengthened after financial breaches at MARAD

The 2019 Auditor General’s report flagged several financial discrepancies and breaches at the Maritime Administration Department (MARAD), which falls under the purview of what was then the Ministry of Public Infrastructure.

As the parliamentary Public Accounts Committee scrutinised this report on Monday, the ministry’s current Permanent Secretary Vladim Persaud revealed that internal investigations discovered these shortcomings and disciplinary actions were taken.

The acquisition of spares for vessels in March 2019 was of particular concern. The AG report noted that the entire contract sum, $351.3 million, was paid to the supplier.

Further, the National Procurement and Tender Administration Board (NPTAB) approved a variation in July 2019, for a total of $400.2 million, giving a revised contract sum of $751.5 million.

This represented an increase of approximately 114% on the initial contract sum, according to the report. But it was noted that the supplementary contract stated that 80 per cent of the contract sum should be paid on the signing of the agreement; however, the full sum was paid.

“This is a breach of the payment terms of the contract. Further, the contractor did not provide a bank guarantee in keeping with the requirement of the terms of the contract,” the report noted.

The Permanent Secretary noted that these and other discrepancies were also found in an internal review, forcing the ministry to take disciplinary action.

“…Since then we have taken several decisions not only to restructure the way procurement was done and ensuring that they are synchronized with how the national procurement system operates or what is prescribed by law,” Persaud explained.

He also said MARAD’s Board of Directors was changed because it is believed that such lapses could not have occurred without their knowledge.

Though noting that the ministry is unable to change what happened, he assured the committee that internal controls, such as procurement protocols, were strengthened to prevent recurrences.

And some improvements have been recorded.

Last month, as the 2022 Auditor General’s Report was handed over to the Speaker of the National Assembly Manzoor Nadir, Auditor General General Deodat Sharma said for the first time, most overpayments flagged by his office have already been refunded.

After handing over the 2021 report last year, the Auditor General noted that there were fewer contract overpayments recorded during that year too.