An auditor general report into the National Sports Authority (NSA) found that a consultancy company was paid over $1.1 million for work that was never done, that contracts issued by the authority “lacked formalized process and transparency” and that, at times, the NSA’s executive management “operated in contravention of the Financial Regulations”.
The report, by Auditor General Terrance Bastian, was tabled in the House of Assembly yesterday and covers the period July 2011 to December 2017.
“We noted that Company A had entered into a consultancy agreement with the National Sports Authority on 22 May, 2015, for a three-year period ending 22 August, 2018 at a fixed fee of $40,000 per month and payable in quarterly installments,” the auditor general wrote.
“The Ministry of Finance made direct payments to the company totaling $467,907.51.”
The auditor general noted that the contract for Company A had “shortcomings” in terms of specifications and conditions “as all of the deliverables were never completed”.
“We noted that the NSA board made recommendation to cancel the company’s service contract in a letter dated May 22, 2017,” the report said.
“However, the company at this point had already received a total of $1,191,579.91 for services that were never performed.
“We further noted that there was little information on the company and as a result, it made it difficult to assess contract management (post award) as an appropriate file was not maintained.”
It added, “There was no information to show how this company was chosen.”
The auditor general recommended that the NSA establish a contract committee.
“It is further recommended that approval…above a pre-defined threshold be subject to independent review by this committee who will be responsible for ensuring that all deliverables are met.”
The auditor general also found that a Ministry of Youth, Sports and Culture consultant who was supposed to be paid $40,000 per annum for three years, was instead paid over $123,000 in less than two months.
The agreement was made on January 4, 2013 for a period of three years, but was was suspended at the end of February 2013 because of the failure of executive management to obtain the necessary approval to pay the employee.
“However, at the end of the employee’s departure from the organization an amount of $123,366.29 has been received,” the report said.
Also of concern was the use of petty cash.
The report noted “unusual payments” from petty cash, in one instance to pay for the passport and visa renewal for an officer.
It was also used to purchase fuel for a private vehicle, as well as “numerous purchases” of lunches, snacks and dry cleaning.
The report said, “Continued processing of payments can create the impression that petty cash is a free-for-all.”
The auditor general also raised concerns with monies paid to several companies.
The report does not name the companies, but refers to them as Company A, B, etc.
For instance, the auditor general said that Company G was paid $1,030,424.71 during the period July 1, 2014 through December 28, 2017 for work that was never put to tender.
The auditor general noted that because the contract documents were never put on file, “…We could not determine if value for money was received.”
The report also found that Company E was paid $215,571.90 without a contract document on file.
In another instance, the auditor general said that Company B was paid over $193,000 but “we observed no document on file giving approval to pay the above amount other than a copy of an invoice”.
The report said, “We noted that a contract was signed by a senior government official on October 8, 2014.”
It continued, “We further noted that neither the board nor the executive team seem to have been made aware of the engagement.”
It concluded, “Having examined the accounting system, we conclude that there were some weaknesses as the Financial Administration and Audit Act, 2010, Financial Regulations, 1975 and The Sports Authority Act, 2011 were not fully complied with.”
The NSA, which is government-owned, was established by the Sports Authority Act, 2011 to manage, maintain and operate the Thomas A. Robinson National Stadium, Queen Elizabeth Sports Centre and the Baillou Hills Sporting Complex.