By RASHAD ROLLE

Tribune Senior Reporter

rrolle@tribunemedia.net

THE Bahamas Public Parks and Beaches Authority will terminate all current contracts after external investigators found numerous lapses in its functioning and internal controls.

McKell Bonaby, chairman of the authority, suggested on Friday that as many as 1,400 contractors will be affected by this.

During a press conference at the Office of the Prime Minister, Press Secretary Clint Watson said the contracts will be terminated in a legal manner so that contractors who have a valid contract will be paid.

“However,” he said, “they will now be paid in a way that fully complies with all existing laws, regulations and best financial and accounting practice.

“Given that there is no information on file relating to the ‘Know Your Customer’ requirements, every contractor will be required to attend in person at a venue to be announced shortly and provide the basic KYC documentation for the maintenance of proper internal records of the authority.

“They will have to produce a document or documents to prove their identity (such as a passport, driver’s licence or NIB card), they will have to confirm their bank details, and they will have to be tax and NIB compliant, as the law requires,” Mr Watson said.

 Mr Bonaby said some 300 general service workers will fill the void after current contracts are cancelled. He said by mid-January the authority expects to “rightsize the ship,” allowing those workers to return to their usual duties.

 K Christie and Co Chartered Accountants conducted the operational review of the BPPBA. The firm said it did not perform an audit of the authority; the experts merely conducted a review requested by the Ministry of Finance, one that does not fit the requirements of an audit as outlined by International Standards on Auditing or International Standards on Review Engagements.

 The probe found the authority went tens of millions of dollars over budget despite there not being any “real needs on the ground” for this overspend; found inconsistencies in signatures on contracts; and VAT returns were not filed, among other lapses.

 “We did not identify the exact need for extra budgetary allocations and there is speculation that it was fuelled more by the demand and requests for economic stimulation than by any real needs on the ground,” the report said.

 From July 2019 to June 2020, the authority received a budget of $19.1 million but spent $25.9 million in the end, an overspend of $6.8 million.

 From July 2020 to June 2021, the authority spent $28.8 million, $13.7 million more than budgeted.

 The authority was on pace to similarly overspend its budget in the latter portion of this year, having spent $9.3 million from June to October 31 after receiving a budget of $15.2 million.

 Investigators said contracts showed inconsistencies in the signature of former Executive Chairman Shanendon Cartwright, Member of Parliament for St Barnabas.

“All contracts were signed by Executive Chairman Shanendon Cartwright, MP and board Secretary Marisol Morley. Three different signatures purporting to be that of the Executive Chairman were affixed to contracts. The authority could not produce a specimen signature or A/B signatory list to confirm the proper signature that should have been affixed to contracts,” the report said.

 Investigators also found the authority signed and dated some contracts ahead of the vendor/witness signing and that some contracts were missing from the PDF files they reviewed.

 Not only were some contracts not witnessed, but the authority also does not require official Know Your Customer (KYC) identification from vendors.

 “These forms of ID are standard information and at a minimum establish that the authority is dealing with the proper person,” investigators said. “Multiple contracts have been issued to individuals using different company names. These individuals have anywhere from one to ten contracts; for example, contracts have been issued to 3M Printing, 3M Car Rental and Oscar Thurston, who are one and the same.”

 Mr Watson added: “Multiple contracts have been issued to individuals using different company names. These individuals have anywhere from one to 10 contracts, some of them totalling hundreds of thousands of dollars.

 “At the height of the pandemic when the whole country was locked down and Bahamians were not allowed to visit parks or beaches, the authority awarded contracts and increased expenditure on contracts to clean those parks and beaches that were closed.

 “Contracts were awarded to sweep roads at a time when people weren’t allowed to be on the roads. When some people were fined for selling coconuts on the side of the road, one road sweeper was paid $17,000 to sweep roads just three times a month using electronic electric sweeper. This particular contract paid the contractor $775 per mile. Again, given that the country was in full lockdown, it is unclear whether the contractor was allowed out of his home twice a month in order to fulfil the contract”.

 Investigators found that board meetings were not held, monthly reporting was not done, bank reconciliations were not done and VAT returns were not filed.

  Furthermore, a review of contracts awarded per constituency found that the Killarney constituency—represented by former Prime Minister Dr Hubert Minnis—received most of the contracts. 

Investigators said: “Killarney constituency received the largest portion — 12 percent or $373,100 — of total contracts awarded and the constituency received the lowest at one percent or $43,600. We noted that Killarney has six park and ten beach designations and Englerston has four park designations.” Mr Watson also said: “Multiple contracts have been issued to individuals using different company names. These individuals have anywhere from one to 10 contracts, some of them totalling hundreds of thousands of dollars.

 “At the height of the pandemic when the whole country was locked down and Bahamians were not allowed to visit parks or beaches. The authority awarded contracts and increased expenditure on contracts to clean those parks and beaches that were closed.

“Contracts were awarded to sweep roads at a time when people weren’t allowed to be on the roads. When some people were fined for selling coconuts on the side of the road, one road sweeper was paid $17,000 to sweep roads just three times a month using electronic electric sweeper. This particular contract paid the contractor $775 per mile. Again, given that the country was in full lockdown, it is unclear whether the contractor was allowed out of their home twice a month in order to fulfil the contract.

 The board, auditors said, met only once during the 15 month period under review. “We noted no documented corporate governance policy of the board in place,” their report said.

 “We noted no monthly reporting by the managing director to the board of the condition of BPPBA, including financial performance budgets, etc. A monthly expense report is sent to the finance officer at the Ministry of Finance, as required of all departments.

 “Because of these deficiencies, we are unable to say whether the board was fully aware and seized of the financial implications of its decisions.”

 Investigators also found an Accounts Department that is woefully under-resourced to fulfil its functions.

 The report said: “The entire Accounts Department consists of one senior accountant, who while diligent at the post does not hold professional qualifications. The size and complexity of the authority’s average annual expenditure require a highly skilled accounting department with expertise in financial control and compliance to ensure proper financial management.

 “A financial controller, assistant financial controller and accounts payable clerk are basic and essential positions for a corporation handling several hundred contracts and a multi-million-dollar budget. Additional staff with strong accounting background are required to adequately staff and maintain good standards for accurate monitoring and reporting, etc.”

 Investigators wrote: “This operational review revealed a combination of material weaknesses and significant deficiencies that created an environment to facilitate such overruns.

 “The material weaknesses stemmed principally from the board’s failure to exercise oversight by meeting regularly and requiring reports that would enable it to monitor the budget versus actual performance of the authority. Additionally, the procedures within the Accounts and Inspection Department lack checks and balances that can militate against errors, improper behaviour, and other risks. Deficiencies were reflected in the authority’s inability to reduce risks and incorrect information.”