Auditor General 2023 Report: Govt recovers almost $300M in overpayments on 74 contracts

– most regions able to recoup prior year overpayments

The Auditor General’s 2023 report has highlighted progress made not only by regional administrations but also by Ministries when it comes to addressing issues related to overpayments of salaries and contracts, with almost $300 million in overpayments recovered.
According to the AG report, as many as 752 contracts totalling $47.4 billion were examined by the Auditor General and his team. Of these, there were a total of $299.1 million in overpayments on 74 contracts.
“Sums totaling $212.800 million were in relation to forty-one Contracts under the Ministries, while $86.300 million, under thirty-three Contracts, were recorded under the Regional Democratic Councils (RDC),” the report stated.
“At the time of reporting in September 2024, all overpayments were recovered by repayment of sums overpaid, and by Contractors completing unfinished or outstanding works for which payments had already been received.”

Perhaps one of the most well-known cases where money had to be recovered from a contractor, was the Conversation Tree to Dennis Street contract. That contract, which was awarded by the National Procurement and Tender Administration Board (NPTAB) to Trinidad company Kalco Guyana Incorporated, had to be terminated in May 2024 by the Ministry of Public Works.
This was after the contractor failed to complete the works within the contractual timeframe. At the time the contract was terminated, advance payments had also not been fully recovered, resulting in the Ministry valuing the sums owed by the contractor at $152 million. A decision was taken to seize the contractor’s assets, to recoup this sum.
“It was noted that the Ministry by way of a mutual settlement agreement, which was prepared in conjunction with the Attorney General’s Office, took ownership of the Contractor’s equipment as part of the settlement for sums of money owed to the Ministry. The equipment, with a total estimated value of $153.600 million was inspected and valued by the Senior Mechanical Engineer from the Ministry of Public Works,” the report states.

The contract has meanwhile since been given to S. Jagmohan Construction and General Supplies Incorporated, which was applying the final touches to the project as of last month. S. Jagmohan Construction had already been working on the first lot of the $1.8 billion project and had completed its lot on time to the tune of some $1 billion.
Back in April 2024, during a meeting with representatives of Ministries and agencies responsible for awarding and monitoring government contracts, President Dr Irfaan Ali ordered that penalties outlined in several government contracts be enforced for companies that continue to default on their contractual obligations.
In the case of overpayments on salaries, at least one Ministry has taken this issue by the horns in order to eliminate such lapses. According to the report, the Ministry of Health has been having weekly contact with supervisors to ascertain staff attendance.
Further, supervisors have been tasked with reporting resignations and job abandonment, in order to ensure faster reporting and action. When it comes to its ongoing efforts to recover overpayments, the report noted that assistance has been sought from both the Solicitor General and Accountant General.
The report states that progress has also been made at the level of the regional administrations when it comes to recovering overpayments. For instance, in Region One (Barima/Waini), the regional administration had fully recovered overpayments on salaries that were flagged in the 2022 report.
Region Two (Pomeroon/Supenaam) overpayment on construction, as flagged in the 2022 report, was also recovered. In Region Five (Mahaica/Berbice), overpayment on salaries for staff was one of the recommendations that had been fully implemented, meaning the monies recovered.
In Region Seven (Cuyuni/Mazaruni), overpayments on contracts were recovered by the region. Meanwhile, in Region Eight (Potaro/Siparuni), overpayments on salaries and three instances of overpayments on contracts were also recovered. In Region Nine (Upper Takutu-Upper Essequibo), the region managed to recover two overpayments on contracts. (G-3)