…
.major loop holes cited by investigative team
The lack of a credit approval limit and the overall absence of credit policies are among major issues plaguing the operations of the Demerara Harbour Bridge Corporation’s Asphalt Plant, an investigative report has revealed.
On Wednesday, the investigative team, which was team assembled by the Minister of Public Works, Bishop Juan Edghill, resented its much-anticipated report on the operations of the Asphalt Plant amid widespread allegations of corruptions.
The four member team led by Chartered Accountant, Chateram Ramdihal, said the investigation revealed that the plant has no credit approval limit or credit policies.
“The sale of asphalt on credit was poorly managed as there are no policy governing the sale of goods on credit. The lack of credit policy resulted in all credit sales being approved by the General Manager without any evidence of a credit review process being carried out and credit limits set for the various customers,” the investigators explained in their report seen by Village Voice News.
It was noted that as of December 18, 2020, the Asphalt Plant’s receivable balance was $93.4M.
It was explained that a credit policy is a set of guidelines that outlines credit and payment terms for customers and establishes a clear course of action for late payments. In the absence of such policies, the plant is exposed to a high risk of clients failing to pay on time. “An analysis of receivables revealed that an average of seventy-five percent of debts is owing beyond 90 days,” the team of investigators said while noting that they were unable to determine where there was consistency in management’s decisions when granting credit to various customers.
It was pointed out that Courtney Benn Construction Inc. was given credit after credit by the management of the plant, although the company had large sums outstanding at the point of gaining additional credit.
“We were unable to determine whether selling asphalt on credit is economically beneficial to the plant,” they added.
However, in response the Management of the Plant, headed by the General Manager of the Demerara Harbour Bridge, Rawlston Adams, said there is a credit policy approval system in place. “There is an established credit procedure in place which is very active and engagement,” he said.
But maintaining their position, the investigators have urged that a “good” credit policy be established before credit is extended to customers.
Another anomaly cited was the distance between the plant and the location of the scale where the asphalt is weighed.
“The weighing of asphalt for large trucks is done at the Demerara Harbour Bridge, which is located approximately 10 miles away from the Plant, resulting in a higher cost than the other option available which is to use the scale next door for a fee of approximately Three Thousand Guyana Dollars (G$3000). This practice exposes the Plant to the risk of asphalt being taken out before it is weighed,” the investigators explained.
The investigators noted that the current system of weighing asphalt in large trucks can give rise to a number of problems including the loss of income as customers are allowed to take away any excess for which no obligation to pay is established.
Further, it noted that the current system requires an employee to accompany the truck using the plant’s vehicle, and a driver, resulting in excessive use of resources. Importantly, it poses a risk of asphalt being removed from the trucks before it is weighed.
In response, the management disclosed that it has already advertised in the local newspapers for the acquisition of a 60MT scale. This decision dates back to 2017. However, in the interim, the investigators said that the scale next door to the plant can be utilized.
In conclusion, the investigators said though news reports in September 2020 alleged that contractors working on Government projects were mandated to take their asphalt from the Garden of Eden Plant to facilitate a scam, they were unable to confirm or negate the allegations.
The Public Works Ministry was accused of facilitating the scam by ordering asphalt from the plant to be billed to the Ministry, but would allegedly collect less resulting in the difference being sold at a discount to contractors.
“Our investigation revealed that the Ministry of Public Works purchased asphalt through a prepayment system and did not have a system in place to reconcile the amount of asphalt collected as against that paid for. Our examination of a payment made by the Ministry for asphalt delivered revealed overpayment by the Ministry. Due to lack of internal controls, we were unable to determine whether the above allegation is accurate. However, based on the above observations and lack of internal controls the above allegation is possible,” the investigators said.
The report focused on the period 2013 to date.
Minister Edghill after receiving the report said he finds the discoveries quite “damning”. He nonetheless assured that measures will be taken to ensure that hemorrhaging of the public purse is ceased.
