Hales admits he was 'left out of the loop'

Hales admits he was 'left out of the loop'

BY ALICIA DUNKLEY Observer senior reporter dunkleya@jamaicaobserver.com

Wednesday, November 30, 2011

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CHIEF accounting officer in the transport and works ministry, Alwyn Hales, has admitted to being "left out of the loop" on several concerns raised in the recent audit query on the Jamaica Development Infrastructure Programme (JDIP) by Auditor General Pamela Monroe Ellis and to which he responded two weeks ago.

Hales' admission came yesterday during a meeting of the Public Accounts Committee (PAC) of Parliament during which he recanted on statements made last week in which he said Monroe Ellis did not give the ministry the opportunity to respond to the concerns raised in the recently JDIP audit before sending the final document to the Parliament.

On November 17, Dr Hales told members of the media during a hastily arranged press briefing at the ministry's Hagley Park offices in the Corporate Area that no exit interview was done with the ministry as required by protocol which would have allowed the ministry to clarify a number of issues raised by the auditor general.

"The next thing we knew is that the report was tabled and in the hands of others even before it got to us," he told reporters at the time. He had also, at that meeting, disputed a media report which quoted the auditor general as saying that the report was delivered to the National Works Agency (NWA) some four weeks before it was released.

But yesterday morning, following a staunch defence of the integrity of the report and the reputation of the office by the auditor general, who said she was pressed to defend the credibility of her office and the processes used, Dr Hales told the Public Accounts Committee of Parliament that "in retrospect" his statement to the media at the briefing was not the best way of handling the matter.

"I accept that I was somewhat out of the loop as the ultimate accounting officer for the ministry, but the auditor general indicated in her letter, and rightly so, that as was the case of the audit of the RMF (Road Maintenance Fund) there was ample opportunity for the ministry to respond to the report," he told the committee.

Dr Hales said the way the story was handled by the media with reports in sections that he had "rebuffed the report of the auditor general" had aggravated the situation further.

"My initial response to the report in which I made a statement to the media was not the best way of dealing with this kind of issue, and especially the way in which it was handled by the ministry because there was immediately following, headlines saying that the permanent secretary rebuffed the auditor general," Dr Hales said.

"There was absolutely no intention of rebuffing the auditor general and there was absolutely no intention of not acknowledging that the contents of the report are to be taken seriously and are to be dealt with," he added.

Dr Hales' admission had members of the PAC gasping in surprise.

"You are confirming, contrary to what may have been reported in the media and elsewhere, that the ministry had ample opportunity to respond to the report of the auditor general and that there should be no impression left in the public's mind that any departure from the standard procedure took place in relation to this report," committee chair Dr Peter Phillips probed.

"Yes, Mr chairman. In that regard, it was pointed out by the auditor general that the procedure adopted was the norm for this kind of report," Dr Hales said. "There was only one area in which we had a little difficulty and that was where the audit team had promised to get back to us and give us a week to make a final response. That was not done. The report is accepted by the ministry, we take it very seriously."

Yesterday, the auditor general — who doggedly stuck to the claims made in the report — said she has been "very concerned about the statements" made by Dr Hales.

"Those statements bring into sharp focus the credibility, the competence and the objectivity of the members of the Auditor General's Department," she said.

"There was an allegation that there was a breach of protocol; there was no breach of protocol in relation to how this audit proceeded and the procedure used was no different from that used in the case of the Road Maintenance Fund (when it was audited)," Monroe Ellis said.

She said contrary to what was stated at the briefing, the form of communication was not an informal one as she could produce copies of memoranda exchanged between the offices.

"I find it necessary to share this with the members of the PAC because of the importance of the work of the Auditor General's Department. This kind of work is not something that is fleeting, this is our mandate and I have to take seriously when the audit procedure, when the credibility of the department is brought into question because it can impact our reports," she added.

In the audit report, Monroe Ellis had questioned the decision of the ministry to utilise the sole source procurement methodology in awarding the contract to refurbish the NWA's office China Harbour Engineering Company (CHEC) instead of putting it to competitive tender.

Dr Hales had defended that action, telling reporters that there was "no requirement for competitive tender by the Ex-Im Bank" of China. He said the ministry's choice to use sole sourcing was related to the circumstances in which the requirement for the application to the bank was to be accompanied by a conditional commercial contract signed by a Chinese contractor.

But Dr Phillips yesterday said, based on evidence before the committee, there is no written expression of such a requirement in the loan document signed by the Jamaican Government.

Dr Hales, who said the matter of the procurement of China Harbour is being investigated by the Contractor General, told the committee "it (contract) allows for tendering. I am not saying it doesn't; I believe that could have happened if we had had the time".

He, however, insisted that because the JDIP was a bilateral arrangement there is no requirement to use the process outlined in the Handbook for Public Sector Procurement, hence it was not fair to say there was a breach.

He revealed that the recommendation (to go sole source) was made via a letter to the ministry by the then chief executive officer of the NWA (Patrick Wong, who has since been sacked). Dr Hales said an application was then sent to the National Contracts Commission with a letter of support signed by him.

The CEO of the NWA reports to Transport and Works Minister, while the NWA in general reports to the ministry.

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