THE Auditor General’s Department (AuGD) says the ministries of health and wellness (MoHW) and labour and social security displayed good practices in the face of enormous pressure during the novel coronavirus pandemic, but failed in some areas of procurement and records management, with the MoHW paying out hundreds of millions, without a paper trail.

In a COVID-19 expenditure audit compliance audit compendium report on the ministries tabled in Parliament on Tuesday, Auditor General Pamela Monroe Ellis stressed that it was important to create a balance between effective response and maintaining good procurement and record-keeping practices “since emergency spending is believed to be susceptible to misuse and corruption”.

Among the issues pinpointed was a lack of transparency in payments for COVID-19 quarantine facilities, in which $337 million was paid to seven hotels and guesthouses for providing quarantine accommodations, but the ministry only provided evidence of a formal contract with one.

“The six service providers, without a formal contract, were paid a total of $293 million. In the absence of formal terms and conditions, MoHW was exposed to unbudgeted liability claims and varying payment arrangements, in a context where one service provider unexpectedly asked MoHW to pay the facility’s electricity bill and 90 per cent of water charges,” Monroe Ellis outlined.

Monroe Ellis said the ministry advised that as part of the Cabinet-approved managed controlled re-entry programme to govern to the country’s opening of its borders, it was directed to establish arrangements with private entities such as hotels and guest houses for the mandatory quarantine of people entering the country, in an extremely short timeframe which did not allow for negotiation of formal contracts.

The report noted that the MoHW also paid out $124 million to eight suppliers for infrastructural works done as part of response activities, between January and June 2020, without contracts in place.

The Government auditors also raised concerns about the MoHW’s transfer of $174 million to the Ministry of Local Government, the National Solid Waste Management Authority (NSWMA), and a non-government organisation, without the requisite approval of the finance ministry. “Given that MoHW indicated that it did not obtain any authorisation to execute the transfer, the action raises a greater concern over the use of funds allocated for the COVID-19 pandemic,” the auditor general said.

“We also noted that the MoHW did not report to the National Contracts Commission (NCC) the justification for engaging the contractors using the direct contracting methodology,” the auditor general advised.

The ministry’s explanation is that its acceptance of contractors’ letters of quotation forms a binding contract between the two parties, and that the exigencies of the pandemic required these works to be done at short notice, within short timeframes, which didn’t allow for formal contracts, as is the normal practice. The auditor general advised that subsequent to her investigations, the health ministry reported all emergency contracts to the NCC.

At the same time, the ministry spent $189.21 million to purchase fixed assets, which it said was to support its COVID-19 response efforts, but Monroe Ellis said her department’s review of a sample of fixed assets purchased totalling $55 million found that the ministry spent $2 million on the purchase of 45 televisions and 15 tablets, but did not indicate on the purchase records the reasons for acquiring these devices. Consequently, the auditors said they were not able to determine how these items related to the COVID-19 response.