Saturday 26th July 2014 By Ricardo Gladiator Welch RAMPANT CORRUPTION, BREACHES, FRAUD AND CRIMINAL ACTIVITIES IN LIFE SPORT OF TAXPAYERS MONEY Citizens of the Republic, we are witnessing the biggest corruption in the history of our beloved country perpetrated by this corrupt PP Government. Recently, our WWWWW HHHHHAAAAAAAAA, Anil Roberts, Minister of Sports promised: “If it is proven that a programme I conceptualised to help poor black people is funding terrorists, criminal gangs, and an armed militia of 250 men in a palace in Carapo...a huge compound from which they can train, operate and terrorise the people of Trinidad and Tobago, I will resign forthwith.” The question on people’s lips is whether Anil will “resign forthwith”. Prime Minister Kamla Persad-Bissessar has finally terminated the LIFE-Sport programme yesterday after she tabled in the Lower House of Representatives the FINAL REPORT OF THE CENTRAL AUDIT COMMITTEE ON THE COMPREHENSIVE AUDIT OF THE PAYMENT SYSTEM OF THE LIFESPORT PROGRAMME. Citizens who are interested can now read at length excerpts of the controversial LIFE-Sport report in my today’s editorial and also you can go directly @ tinyurl/LifeSportAudit. The following are excerpts of THE: - FINAL REPORT OF THE CENTRAL AUDIT COMMITTEE ON THE COMPREHENSIVE AUDIT OF THE PAYMENT SYSTEM OF THE LIFESPORT PROGRAMME July 25, 2014 MINISTRY OF FINANCE AND THE ECONOMY INVESTMENTS DIVISION Central Audit Committee FINAL REPORT OF THE CENTRAL AUDIT COMMITTEE ON THE COMPREHENSIVE AUDIT OF THE PAYMENT SYSTEM OF THE LIFESPORT PROGRAMME 1.0 OVERVIEW OF CONCLUSIONS 1.1 The review indicates that: (i) There were widespread breaches of proper procurement practices; (ii) The approval given by Cabinet was not strictly adhered to; (iii) Persons at the coordinating level may have been involved in criminal activity; (iv) There were several instances of fraudulent activity by suppliers to the Programme; (v) There may have been widespread theft of equipment from the Programme; (vi) There may have been breaches of the Proceeds of Crime Act; (vii) Exorbitant and questionable payments were made in several instances; and (viii) There was poor control and monitoring of the Programme by the Ministry of Sport. 1.2 Given the widespread nature of the breaches, it is difficult to understand how they went unnoticed by the Ministry of Sport. Consideration has to be given to whether there was complicity by officers of the Ministry. For example, the entire payment of $34 m to EBeam Interact Limited was made notwithstanding that external attorneys advised that there may have been grounds to contest and resist the final payment. 1.3 It is recommended that the entire matter be turned over to the Director of Public Prosecution and the Commissioner of Police to prosecute the several breaches identified. 2.0 ENTITY 2.1 The Ministry of Sport designed the LIFE-Sport (LS) Programme to induce unemployed young men to get involved in sport, in order to redirect their lives into productive activities and positive engagements. Cabinet by Minute No. 2312 of August 30, 2011 agreed to the implementation of the LS Programme by the Ministry of Sport (MOS) through the Sport Company of Trinidad and Tobago (hereinafter referred to as ‘SporTT’ or ‘the Sport Company’). This Programme which was launched on June 18, 2012, commenced August 6, 2012. It is currently being conducted in forty three (43) centres throughout Trinidad for young men between the ages 16-25. 2.2 The objective of this Programme is to reduce crime in Trinidad. The intention is to bring about social transformation in the lives of young men joining the Programme by strengthening their cognitive, personal and interpersonal abilities. It is expected that these young men will then be able to make informed decisions, manage their finances, communicate effectively and build healthy relationships. 3.0 MANDATE 3.1 Based on recent negative media reports about the LS Programme, the Central Audit Committee was mandated by the Permanent Secretary of the Ministry of Finance and the Economy on directive from the Minister of Finance and the Economy to conduct an operations audit of the LS Programme with emphasis on the payment system. 4.0 AUTHORITY 4.1 The Central Audit Committee, which was established by Cabinet Minute 1266 dated September 2001 and is also empowered by same as well as by Section 4(2) of the Exchequer and Audit Act. 5.0 ASSIGNMENT 5.1 To conduct an audit of the operations of the LS Programme with emphasis on the payment system from its inception to the present. 6.0 SCOPE 6.1 The audit included but was not limited to the examination of all relevant books and records of the LS Programme from its inception to the present time. 7.0 METHODOLOGY 7.1 Central Audit reviewed all available documents and records with respect to payments made from the inception of the programme. Most of the documents from February 2014 to present have not been yet seen even though numerous requests have been made. Further, to substantiate and reconcile the level of activities to the payments made, the following Centres were selected for review during the period June 11, 2014 to June 13, 2014:- (i) June 11, 2014 – Marabella, Pleasantville (previously Embacadere), La Romain, Penal, Siparia, Santa Flora, Point Fortin and La Brea Centres; (ii) June 12, 2014 – John John, St Paul Street, Beetham Gardens, Barataria, Malabar Train Line 1 and Malabar Train Line 2 Centres, Carapo and Valencia; and (iii) June 13, 2014 – Carenage, Cocorite, Four Roads, Bagatelle, Covigne Road, River Estate, Enterprise and Tabaquite Centres. 7.2 Additionally, the Barataria, Maloney, Malabar, Pinto Road and La Horquetta Centres which were also visited prior to June 2014, were revisited on Wednesday June 18, 2014. 7.3 The following persons were interviewed: (i) Mr Theodore Charles, Assistant Programme Director (Administration); also in attendance were Mr. Ronnell Barclay, Project Manager, Mr. Cyril Berkley and Junior Barrack from the Programme’s Placement Unit; (ii) Mr. Cornelius Price, Programme Director; (iii) The Board of Directors of SporTT; (iv) Mr. John Mollenthiel, Ex-CEO SporTT; (v) Mr. Anil Roberts, Honourable Minister of Sport; (vi) Mr. Ashwin Creed, Permanent Secretary, MOS; (vii) Mr. Adolphus Daniell, President / CEO of EBeam Interact Limited; (viii) Several unsuccessful attempts were made to interview Ms Ruth Marchan the Deputy Programme Director; and (ix) In addition several relevant documents were presented to the Auditors by the Honourable Minister of National Security. 8.0 OBJECTIVES 8.1 To ensure adequate controls, accountability and transparency exist in the LS programme and to ascertain whether expenses incurred were accurate and in accordance with the approved payment system. 9.0 EXECUTIVE SUMMARY 9.1 Payment Process Initial payments were paid in cash to participants. This meant that there could be little verification or control over the payments. 9.1.1 When the LS Programme officially started in August 2012 it was initially overseen by SporTT. This changed with effect from January 1, 2013 when full control of the programme was transferred to the MOS. SporTT however was retained to facilitate payment or as a ‘payment provider’. 9.1.2 Payments were made either by cheques or via the Automated Clearing House (ACH) System. Central Audit was informed that during a short period in 2012 cash payments were made to participants. 9.1.3 The decision to pay in cash was taken after it was discovered that numerous participants had no bank accounts and/or any form of identification to cash cheques. It was possible that major discrepancies could have occurred between those who should have been paid and those who were actually paid. The problem was subsequently resolved and Central Audit verified that participants have been receiving payments since October 2012 either via the ACH system or by separate cheques. However, Central Audit was not able to verify if the list of participants to be paid was consistent with the list of participants actually paid through the ACH system. 9.2 Centres The Ministry of Sport increased the number of LS Centres without Cabinet’s approval. Several of these Centres could not be located. 9.2.1 Cabinet by Minute No. 2312 of August 30, 2011 agreed to the implementation of the LS Programme in thirty-three (33) centres throughout Trinidad by the Ministry of Sport (MOS) through the Sport Company of Trinidad and Tobago (SporTT). Subsequently, ten (10) centres were added to the programme. Central audit was informed that of the ten (10) centres added, three (3) existing centres were downsized to thirty (30) participants each to accommodate three (3) additional centres, also with thirty (30) participants each. Of the other seven (7) centres, two (2) were introduced with sixty (60) participants each, and five (5), with thirty (30) participants each. 9.2.2 Central Audit was informed that the decision to start a LS Centre in a community was based on the recommendation of residents within the communities via their respective parliamentary representatives. However, no correspondence to this effect was seen. 9.2.3 It was discovered that some of the recently introduced centres do not have a fixed or proper place to operate. For example, Central Audit discovered that the Four Roads and Cocorite Community Centres, out of which the Four Roads and Cocorite LS Centres were supposed to be operating, have never been used. 9.2.4 Similarly, Central Audit was unable to locate Malabar Train Line 1 and 2, Beetham Gardens and Covigne Road LS centres when a visit was made to the listed addresses. It was also discovered that some of the older centres are still operating out of churches, pan-yards and savannahs. 9.3 Coordinators The Coordinators seem to have criminal records which made them unsuitable as role models for the participants. 9.3.1 One (1) coordinator was contracted for each of the forty three (43) LS Centres with specific responsibilities for the operations of the LS Programme. Central Audit was informed that individuals in the communities who would have significant influence over the target group of young men were recommended by their respective communities. These individuals were subsequently contracted as coordinators. However from the list at Appendix 2 the contracts were given to contracting firms which was not as envisaged when the programme was first conceptualised and approved by Cabinet. 9.3.2 During the field visits, personnel from the police service who provided protective escort to officers of the Central Audit Committee expressed concern about certain individuals who were contracted as coordinators for specific centres. These officers have alleged that a few such individuals in the East/West corridor are currently under police surveillance for illegal activities in their relevant areas. 9.3.3 The police officers were also very apprehensive whether such individuals can reform the participants under their watch when they themselves may still be involved in criminal behaviour. One of the officers strongly believed that the Cocorite, Four Roads and Covigne Road centres may have some sort of allegiance with the Carapo centre. Central Audit could not verify whether any such allegiance exists. 9.4 Coaches The number of coaches being paid is greater than the actual number of coaches who are actually working on the programme which suggest a real possibility of fraud. 9.4.1 From the inception of the Programme, it was agreed that four (4) coaches would be hired for each of the centres that has an approved enrolment of sixty (60) participants. A minimum of one (1) coach was to be contracted for each of the three (3) sporting disciplines of football, cricket and basketball with an additional coach in each centre to assist in the sporting discipline that holds the interest of the largest number of participants. Centres with an enrolment of thirty (30) participants on the other hand should have two (2) coaches (one (1) each for football and basketball) with the exception of River Estate Centre which has three (3) coaches. 9.5 Discrepancies were discovered with respect to the number of coaches performing the duties and the number of coaches actually being paid. According to the accounting records the full complement of coaches has consistently been paid but what was discovered during the site visits was that several coaches were not actually performing the duties for which they were hired. 9.6 Participants The review of attendance reveals several irregularities. There is a high possibility that the total number of participants being paid was significantly higher than the number of participants who actually attended the programme. 9.6.1 The LS Programme which was launched on June 18, 2012 and commenced August 6, 2012 started in thirty-three (33) centres throughout Trinidad for young men between the ages 16-25. At that time, all the centres were approved to have an intake of not more than sixty, giving a maximum total enrolment of 1,980 participants. 9.6.2 Subsequently the total enrolment increased to 2,250 participants without Cabinet’s approval. 9.6.3 Examination of the payment documents for June revealed several instances where stipends were made to participants without proper approvals and supporting documentation. 9.6.4 Additionally, during the visit to centres, it was noted that the number of participants present was less than the number of participants who signed the daily attendance register and even less than the number of participants submitted for the monthly stipend. In many instances participants were signing on behalf of other participants. 9.12 Vocational Training (Trade Component) Payments were made for services not received and these may constitute a breach of the Proceeds of Crime Act. 9.12.1 An amount totalling $5,619,250.00 was paid to Allsnorth General Contractors, Re Construction and Repairs Limited, Scobex Tech Limited, Kadeem & Associates Ltd. and McKain Enterprises Ltd for the provision of vocational training. Mr. Theodore Charles, Mr. Ronnell Barclay and Mr. Cyril Berkeley could not provide any details on the tender and award processes. Centres visited revealed that the Vocational Training Component was never implemented. 9.12.2 All the companies listed above submitted invoices which did not have VAT registration numbers displayed. Based on the value of the said invoices, they all exceeded the legal VAT threshold and it is mandatory that they are registered with the Board of Inland Revenue. This constitutes a violation of the Proceeds of Crime Act. 9.12.3 Both Mr. Theodore Charles and Mr. Cyril Berkeley stated vocational training was implemented at the Larry Gomes Stadium. 9.12.4 It was stated by Mr Theodore Charles that currently fibre optics, security camera installation and electrical installation classes were being conducted at the Larry Gomes Stadium. These classes were allegedly attended by participants of the Malabar, Samaroo Village, Valencia, Carapo and Pinto LS Centres. 9.13 EBeam Interact Limited A payment of Thirty Four Million Dollars ($34,000,000.00) was made to EBeam Interact Limited although no services were rendered and the external attorneys suggested that the matter should be contested. 9.13.1 On December 6, 2012, by signed agreement, the Sports Company of Trinidad and Tobago Limited (SporTT) retained the services of EBeam Interact Limited (EBeam) to provide, by way of integrated interactive technology, the numeracy and literacy component to the participants of the LS Programme. The contract amount was agreed at TT $34,000,000.00 with a planned commencement date of December 6, 2012 and a projected completion date of September 30, 2014. To date that component of the programme has not started. However, the payment of $34,000,000.00 was made to EBeam. 9.13.2 Central Audit was informed that E-Beam was sole selected mainly because of the company’s President/CEO, Mr Adolphus Daniell’s track record as an educator with respect to individuals who have struggled academically. 9.13.3 According to the contract, it was agreed that SporTT shall pay to EBeam the sum of seventeen million dollars (TT $17,000,000.00) which represented fifty per cent (50%) of the fee, contemporaneously with the signing of the agreement and the remaining fifty per cent (50%) on September 2, 2013. Central Audit confirmed however that the first payment was made by cheque number 2185 dated June 14, 2013 and the second payment by cheque number 7997 dated February 11, 2014. 9.13.4 Ms Dawn Mohan, current Corporate Secretary of SporTT, however stated that since the Numeracy and Literacy Component had not started by EBeam, for which it was contracted, legal advice on whether to pay EBeam the second payment as per the terms of the contract was sought. Two pieces of legal advice were received, one from Ms Lisa Solomon, the then Head of Legal of SporTT and the other from J.D. Sellier & Company. The opinion from J. D Sellier suggested that measures, including arbitration be explored to avoid having to make the payments (appendix 23-1) 10.0 Other Matters 10.1 A number of other matters have been reported in the media but, given limited resources and time constraints, these were not all investigated. However, the investigation provides enough information to allow definitive conclusions on a number of irregularities. 11.0 Conclusion 11.1 From the review it is clear that the LS Programme has a number of irregularities judging from the widespread absenteeism, absence of proper procurement practices, overpayment for goods and services and possible criminal activities ranging from fraud (where money has been invoiced and paid but goods and services not supplied) to theft and possible breaches of the Proceeds of Crime Act. In addition, statements from members of the Police Service with whom the auditors interacted during the audit of the programme suggest that there may be criminal elements in positions of supervision and coordination within the Programme. 11.2 Given the substantial breaches identified, it is recommended that this matter be referred to the Director of Public Prosecutions and the relevant law enforcement agencies. 13.0 CENTRES 13.1 A review of payment documents revealed that ten (10) LS Centres were added to the Programme making it forty-three LS Centres in total. A list of all the forty-three centres is included as Appendix 1. Central Audit was informed that three (3) of the existing centres were downsized, Fyzabad, Mayaro and La Horquetta, to thirty (30) participants each to accommodate the three (3) new centres, Beetham, Malabar Trainline 1 and Malabar Trainline 2, also with thirty (30) participants each. Of the other seven (7) centres, two (2), Cocorite and John John were introduced with sixty (60) participants each, and the last five (5), Basilon Street, Covigne Road, Four Roads, River Estate and YTC, each with thirty (30) participants. 13.2 Central Audit was informed that the decision to start a LS Centre in a community was based on recommendations from the residents within the community via the respective parliamentary representatives. Arising out of the field visits conducted by Central Audit to selected LS Centres it appeared that due diligence exercises were not conducted on the implementation of the new centres and to a lesser extent some of the older centres. 13.3 It was discovered, for example, that the Community Centre from which the Barataria LS Centre was supposed to have functioned has been under construction for quite a number of years and is still incomplete. Residents in close proximity to the building indicated that no work has been conducted for a number of years and hence continues to be unutilized. Mr Theodore Charles when contacted said that the Ministry of Community Development would have given the assurance that all community centres, which were requested for use by the LS Programme, including the Barataria Community Centre, would have been ready within a ‘short period of time’. He however claimed that he was unable to find the relevant documentary evidence to substantiate this statement. 13.4 In addition, Central Audit discovered that the Four Roads and Cocorite Community Centres, out of which the Four Roads and Cocorite LS Centres were supposed to be operating, have never been used for the LS Programme. Furthermore, the coordinator for the Four Roads Centre stated that the centre has been operating from his home while some older centres are still operating out of churches, pan-yards and savannahs. 13.5 Central Audit was also unable to locate Malabar Train Line 1 and 2, Beetham Gardens and Covigne Road LS Centres during the visits made to the listed addresses. Residents in Beetham Gardens who were contacted claimed they were unaware of the existence of such a centre. 13.6 Notwithstanding what Mr Theodore Charles stated, it is quite apparent that proper planning was not conducted in the introduction of certain centres, especially some of the new centres. It was discovered that from the start some centres did not have a fixed or proper place from which to operate. 14.0 COORDINATORS 14.1 There was one (1) Community Coordinator, hereinafter referred to as Coordinators, for each of the forty three (43) LS Centres (Appendix 2 refers) with specific responsibilities (referred to as “Services” in Appendix A to their agreements) for the operations of the LIFE-sport Programme. Central Audit was informed that the coordinators are individuals in the communities who have significant influence over the target group. All agreements were on short term basis, not exceeding four (4) months at a time, with the option for extensions subject to compliance with established responsibilities. 14.2 It was agreed that a total monthly sum of $30,000.00 be paid to each coordinator assigned to centres with an approved enrolment of sixty (60) participants. Of this sum it is expected that $2,000.00 be used on a monthly basis to cover the cost of incidentals. It was also agreed that each coordinator shall hire two supervisors and one secretary to assist in the performance of their duties. The two supervisors were to receive $5,000.00 per month each and the secretary $3,000.00 per month out of the $30,000.00 paid to these coordinators. 14.3 It was also agreed that a total monthly sum of $15,000.00 be paid to each coordinator assigned to centres with an approved enrolment of thirty (30) participants. Of this sum it is expected that $3,500.00 be paid to one (1) assistant on a monthly basis. 14.4 Central Audit was unable to verify whether the coordinators were in fact hiring the relevant staff as per the agreement. There also was no evidence that the Sport Company or the Ministry of Sport verified that the required staff were engaged before making the full payment. 14.5 During the field visits, personnel from the police service who provided protective escort to officers from the Central Audit Committee were concerned that certain individuals were contracted as coordinators for certain centres. They alleged that a few individuals in the East/West corridor were currently under police surveillance for illegal activities in their relevant areas. The officers were very apprehensive as to whether such individuals can reform the participants under their watch if they themselves are still involved in criminal behaviour. 14.6 One of the officers claimed that Cocorite, Four Roads and Covigne Road Centres may have allegiances with the Carapo Centre. Central Audit could not verify whether any such allegiance exists. It appears therefore that no character background checks were conducted on some of the coordinators. 14.7 Auditor’s Comment 14.8 Based on the history of some coordinators, the decision to give such persons the power to manage, control and authorise payments without proper supervision was ill-conceived. 14.9 Based on circumstantial evidence it appears that some coordinators are in collusion with certain providers of goods and services, some participants and maybe even officers from the LS Programme. 14.10 According to the police officers there is a real concern that some questionable individuals are entrusted with the reformation of the participants. 15.0 COACHES 15.1 From the inception of the Programme it was agreed that four (4) coaches would be hired for each of the centres that has an approved enrolment of sixty (60) participants. A minimum of one (1) coach was to be contracted for each of the three (3) sporting disciplines of football, cricket and basketball with an additional coach in each centre to assist in the sporting discipline that holds the interest of the largest number of participants. Centres with an enrolment of thirty (30) participants on the other hand should have two (2) coaches (one (1) each for football and basketball) with the exception of River Estate Centre which has three (3) coaches. See Appendix 3 for a list (reformatted for presentation) of the coaches as provided by the LS Human Resource Manager. 15.2 During the site visits discrepancies were discovered with respect to the number of coaches performing the duties and the number of coaches actually getting paid. For example it was found that even though basketball coaches are assigned to the La Brea and Point Fortin Centres they have never reported for duty. However, according to the accounting records payments have already been made to Mr Sam Monbodh and Mr Gerald Garcia, the basketball coaches for La Brea and Point Fortin respectively, for the month of June 2014. 15.3 Currently it is the responsibility of the coordinators to recommend the coaches for payment; however Central Audit found that proper monitoring by other officials from the LS Programme was almost non-existent. 19.0 MAINTENANCE OF RECREATION GROUNDS 23.0 E-BEAM INTERACT LIMITED 23.1 The Agreement 23.1.1 On December 6, 2012, by signed agreement, the Sports Company of Trinidad and Tobago Limited (SporTT) retained the services of E-Beam Interact Limited (EBeam) to provide, by way of integrated interactive technology, the Numeracy and Literacy Component (N&LC) to the participants of the LS Programme. The contract amount was agreed at TT $34,000,000.00 with a planned commencement date of December 6, 2012 and a projected completion date of September 30, 2014. To date however that component of the programme has not started 23.1.2 Central Audit was informed that E-Beam was sole selected mainly because of the company’s President/CEO, Mr Adolphus Daniell’s track record as an educator with respect to individuals who have struggled academically. 23.1.3 The justification, dated November 23, 2012, (Appendix 18 refers) stated that the sole selection method was used due to the sensitive nature of the LS Programme. An overview of the crime situation in Trinidad and Tobago, the objective of the LS Programme, the criteria for the selection of prospective participants and a brief description of the Programme’s main components were also included as support for the justification for sole selection. As a result of the above together with the fact that the recommendation came from the Permanent Secretary, MOS to the CEO SporTT, the Board of SporTT at a meeting held on March 8, 2013 ratified the decision made on December 6, 2012 to award the contract for the N&LC of the LS Programme to EBeam Interact Limited. (Appendix 18A refers). 23.1.4 Ms Dawn Mohan Corporate Secretary SporTT claimed that following the decision to award the contract she reviewed the draft, which was prepared by MOS Legal Unit, and pointed out to MOS numerous shortcomings, (Appendix 19 refers). However, Central Audit saw the faxed response dated January 21, 2013, some six (6) weeks after the date of the contract, (Appendix 20 refers) sent by a Ms Judith Joseph from MOS to Ms Mohan. She further claimed that against advice from his Legal Unit and with no change to the MOS draft, the CEO SporTT signed the agreement. It appeared from the faxed response the advice came after the contract was signed. 23.1.5 Mr John Mollenthiel, ex CEO SporTT at a meeting on July 9, 2014, informed Central Audit that he signed the contract mainly to avoid any undue delays in the implementation of the N&LC of the Programme. He said he did not consider the suggested changes to the shortcomings of the contract identified by SporTT Legal since he was told that the contract should be ‘loose’, a word he coined as he could not recall the actual word used. He denied that prior knowledge of Mr Daniell’s track record as an educator influenced his decision to sign a ‘loose’ contract. He said another reason for signing was that he always believed Mr Daniell would deliver since he felt that he had an international image to maintain. In hindsight however he believes that he may have been set up and regretted signing the contract. He said he is also astonished at Mr Daniell’s current ‘nit-picking’ behaviour. 23.2 EBeam’s Position 23.2.1 Central Audit was informed that Mr Adolphus Daniell, President/CEO of EBeam Interact Limited has always maintained that he would start the N&LC of the programme only when all the centres are ready according to the conditions stated in the contract. Inspections of eighteen (18) centres with EBeam officials and LS representatives were conducted between March 26 and 27 and April 9 and 10, 2014 to assess the readiness to conduct the N&LC. Arising out of the inspection Mr Daniell submitted a report which summarises the outstanding issues highlighted by EBeam officials as to the un-readiness of the centres. (Appendix 21 refers). The appendix also lists other issues, which according to Mr Daniell continue to frustrate the start of the N&LC of the programme. 23.3 Justification for Second Payment 23.3.1 According to the contract, it was agreed that SporTT shall pay to EBeam the sum of seventeen million dollars (TT $17,000,000.00) which represents fifty per cent (50%) of the fee, contemporaneously with the signing of the agreement and the remaining fifty per cent (50%) on September 2, 2013. Central Audit confirmed however that the first payment was made by cheque number 2185 dated June 14, 2013. EBeam subsequently submitted an invoice for the payment of the remaining seventeen million dollars as per the contract. 23.3.2 Ms Dawn Mohan, Corporate Secretary of SporTT, stated that since the N&LC, for which EBeam was contracted never got started, legal advice on whether to pay EBeam the second payment as per the terms of the contract was sought. Ms Lisa Solomon, the then Head of Legal of SporTT after examining the contract, by letter dated November 11, 2013 advised that the second payment be made to EBeam. (Appendix 22 refers). She also advised that a robust reporting mechanism be introduced in order to properly monitor and evaluate EBeam’s performance. 23.3.3 J.D. Sellier & Company from whom a second legal opinion was sought also advised that based on the contract according to Clause 8 of the contract SporTT was obligated to make all payments to EBeam within the specifications and terms of payment under the agreement. However, there appeared to be sufficient grounds to challenge this payment. This course of action carried inherent risks which could have left SporTT exposed if the matter went to court. Legal Counsel advised that some degree of arbitration could be entered into to resolve the situation. SporTT ignored the latter portion of the advice and proceeded to make the payment. The main reason given was that payment of the remaining fifty per cent (50%) was linked to the date September 2, 2013 and not upon certain services being completed within a certain timeframe. (Appendix 23 refers). 23.3.4 Based on the two legal opinions SporTT made the second payment by cheque number 7997 dated February 11, 2014. Central Audit was informed that SporTT is currently awaiting legal advice from Senior State Counsel, Mr Russel Martineau, on a way forward or what actions, if any, can be taken against EBeam. 23.4 Auditor’s Comments 23.4.1 It is obvious that SporTT was a party to this contract mainly because the contract was above the authorised limit of the Permanent Secretary, MOS. It is evident that the ‘mind and management’ of this contract has always been and continues to be the MOS. The contract was drafted by MOS Legal, and all the conditions necessary to satisfy the readiness of the centres for the start of the N&LC were always the responsibility of the MOS. 23.4.2 Central Audit noted that most of the centres visited were not in a state of readiness to accommodate the N&LC. To name a few, Covigne Road, Four Roads, Cocorite, Bagatelle, River Estate, St Paul Street, Morvant, Barataria, Carapo, Pinto Road, Malabar Train Line 1 and 2, etc.. Furthermore, a number of participants have indicated their interest in pursuing vocational training instead of learning Mathematics and English. These factors together with the significant reduction in attendance, may have further reduced the number participants interested in the N&LC of the programme. 23.5 Recommendation 23.5.1 The current position of this contract requires expert legal advice which Central Audit cannot provide. It is therefore recommended that SporTT await the advice of the Senior Counsel, which it has sought, and which hopefully would assist in determining a way forward. 23.5.2 In the meantime it is recommended that MOS move with haste to have the centres ready or alternatively in the short term explore the option of setting up a few centralised centres that already have the necessary facilities and security and have the interested participants attend the centre closest to them. 23.5.3 Central Audit also recommends that a formal request be sent to the Inland Revenue Division (IRD) to examine whether or not E-Beam Interact Limited filed a Corporation Tax Return for the year 2013. The objective is for IRD to verify that the company declared the seventeen million dollars (TT $17,000,000.00) it received in 2013 as well as to keep in mind the 2014 Corporation Tax Return due in 2015 for the declaration of the other seventeen million dollars received in 2014. Lester Herbert Director, Central Audit Committee Inshan Mohammed Senior Audit Analyst Varuna Ramdial Senior Audit Analyst Khemkaran Kissun Senior Audit Analyst
Posted on: Sat, 26 Jul 2014 09:50:42 +0000
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