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Report: $2.6m wasted on duplicate payments

Auditor-General Heather Jacobs Matthews

Civil servants wasted $2.6 million of public funds by making duplicate payments, according to the Auditor-General’s latest report.

The transactions included a payment of $807,000 in 2012 to Sandys 360, the West End sports facility that closed its doors the following year after running out of money.

Auditor-General Heather Jacobs Matthews reveals the figures in her damning 315-page dossier on government spending, stating that public officials are bound by the Bermuda Government’s official financial rules to “exercise care and implement proper controls to prevent duplicate payments by ensuring that invoices have not been previously presented for payment”.

The Island’s independent fiscal watchdog lists five examples of duplicate payments: a $5.1 million “third-quarter grant” in 2010; a $1.1 million payment made by the Department of Works & Engineering the same year; a cheque for $59,000 that was issued twice in 2010; miscellaneous items amounting to $571,000 in 2011; and the Sandys 360 payment.

No further details of who made the payments or who received the funds were given and it was not possible to obtain those details from Mrs Matthews this week.

She wrote: “The third-quarter grant was recovered but not the cheque that was issued twice. The amount paid to Sandys 360 has not been recovered. Explanations for the other duplications have not been provided.

“We recommended that the Accountant-General investigate the circumstances giving rise to these duplications, implement more robust controls and procedures to prevent duplication of payments and take all steps necessary (including legal action) to recover and amounts overpaid.”

The duplications are included in what Mrs Matthews has called a “litany of non-compliance with financial instructions and related rules” uncovered for the fiscal years 2010, 2011 and 2012.

The report cites $78.8 million worth of contracts in 2010 and 2011 which were not put out to tender; a failure to comply with financial instructions, mainly involving the Ministry of Public Works, in relation to a number of capital projects worth more than $35 million; and $5 million worth of spending across the Government in 2010 without signed contracts or agreements.

One capital project — the renovation of the Department of Human Resources — had an original contract sum of $257,000 but ultimately cost the public $958,000. The Works & Engineering contract was not properly tendered and the cost was instead negotiated with a contractor, with the approval of the head of the civil service in 2010.

“As such, there was no Cabinet Award Recommendation document issued to Cabinet and no Cabinet approval was obtained for the award of this contract,” wrote Mrs Matthews.

Another example was the new central government lab — originally set to cost just $46,000 and eventually amounting to $902,000 of taxpayers’ cash.

“In 2010, the contract did not receive prior Cabinet approval,” said the Auditor. “Additionally, W&E noted that the services were not tendered but were negotiated with the knowledge of the PS [permanent secretary].”

Paula Cox was finance minister during the period covered in the report — as well as Premier from November 2010 to December 2012 — but she told The Royal Gazette last week that she did not want to comment on the Auditor’s findings.

“Bottom line: no,” she said. “At the time we would have set out all what we have done. There have been a lot of statements made at the time when I was in office.”

Ewart Brown, the former Premier who led the country from October 2006 to 2010, declined to comment, as did Derrick Burgess, who was public works minister during 2010.

Melvyn Bassett, the former managing director of Sandys 360, could not be reached for comment yesterday.