OLPF forensic audit
The forensic audit conducted on the One Laptop Per Family (OLPF) Project has revealed millions of dollars in losses due to over five thousand computers going missing or being damaged.
The audit was conducted last year by Ram and McRae Chartered Accountants. The report was submitted to Finance Minister Winston Jordan in December but was only published on the Ministry’s website on Friday. The main objective of the OLPF project was to acquire and distribute laptops to 90,000 families countrywide.
According to the auditors, “It is likely that of the total number of laptops acquired by purchase or grant of 55,145, some 5136 were either stolen or are defective. In dollar terms, the actual loss to the Government is $306,160,171.”
The report found pointed out that during 2012, management of the project had discovered that 103 laptops, amounting to some $5,912,200, were missing. Following investigations by the Guyana Police Force, the services of seven employees were terminated by the Office of the President on February 22, 2013; however, the missing laptops were never recovered.
In addition, a full (100 per cent) physical inventory count was requested and observed on August 5, 2015 by the auditors, who subsequently preformed a reconciliation based on the documents provided. Their procedures found that management was unable to account for an additional 1875 laptops costing $109,168,913.
“We believe that this matter should be referred to the Police for a full investigation,” the report recommended. Moreover, it was highlighted that some 3158 laptops, valued $191,079,058, that were in stock are all damaged. The auditors said that they were unable to determine whether these are beyond repair.
On the issue of distribution, the audit found total distribution cost amount to $35,291,406 or three per cent of the total cost of the project. The average cost of distribution per laptop was therefore $706. However, the reported stated that up to and including December 31, 2014, the Project had fallen short of the target of 90,000 laptops to be distributed by 31,697 or 35 per cent.
Meanwhile, the auditing firm noted that total training cost amounted to $70,750,427 or six per cent of the total cost. The average cost of training per laptop was therefore $1415. However, it was outlined that while the OLPF’s mission statement defined a clear obligation to provide 10 hours of training to all laptop recipients, the Project Manager had decided to cease the training aspect of the project during the last quarter of 2013. The auditors roughly estimated that some 14,138 laptops were distributed without the requisite training.
“It is clear from the summary analysis above that 92 per cent of the total cost was incurred due to indirect expenses, while only eight per cent was directly attributable to the underlying objective of the project,” the report stated.
The auditors believe that the general expenses of the OLPF project were exorbitant and could have been curtailed by management. Moreover, they stated that the scope of their engagement was limited by the fact that management was unable to provide a number of significant documents for review. This was compounded by the fact that the Project Manager, Margo Boyce and the Deputy Project Manager, Azariah Asim, resigned during the course of the investigation. In both cases, their last day for work was August 14, 2015.
Nevertheless, the report highlighted the new agreement signed between the Government of Guyana and Aerospace Science and Industry Shenzhen Co Ltd (China) on September 15, 2015, which caters for 9609 laptops to be provided by China at a total cost of $1,631,000,000. These laptops are to be distributed to educators, students, institutions of learning and community-based organisations.
“We draw attention to the average unit price of $169,737 for the 9609 laptops to be acquired. This compares unfavourably with the average price of $58,044.83 per laptop acquired by the last Administration. It should be noted that the new laptops are of a higher quality and specifications compared to the models acquired by the previous Administration,” the auditors explained.
However, it was recognised that laptops of similar capacity are listed on the international markets at a retail price ranging from $86,310 to $108,974.