NDMO rushes to spend covid-19 fund on expensive vehicles ‘not related to the pandemic’, OAG report finds
By EDDIE OSIFELO
The National Disaster Management Office had purchased a Toyota landcruiser and Toyota Hilux under dubious means in 2020, an audit report has suggested.
The audit report by the Office of the Auditor General published on Wednesday says these vehicles were bought from Ela Motors totalling $677,500 of covid-19 funds.
Following declaration of state of emergency on March 25, 2020, government had redirected funds from ministry budgets towards its covid-19 preparedness and response plan – generally called covid-19 funds.
This special fund was purposely to pay for goods and services towards government’s covid-19 preparedness and response plan.
These two brand new expensive vehicles bought by NDMO using the covid-19 fund were not relevant to the purpose of the fund, the OAG Report suggests.
“One significant procurement appeared to be unrelated to the pandemic. The NDMO chose to supplement its vehicle fleet with the addition of two new Toyota vehicles at a cost of $677,500.”
OAG investigations also found that the competitive bidding process for the purchase of two vehicles was a paperwork process only.
On June 15, 2020 the Director NDMO received a quote from Ela Motors for a Toyota Land cruiser.
- On June 16 at 11.18am the PS MEDCM wrote to the PS MOFT seeking support to procure a Toyota Land Cruiser and a Toyota Hilux under the COVID-19 budget citing the age and maintenance requirements of the current fleet to support the need to do this. At this stage the Ministry seemed to be set on purchasing the two Toyotas.
- On June 16 at 1.05pm the PS of MOFT requested the PS MECDM complete the procurement process including quotes and a report from the MTB for consideration by the CTB.
- On June 16 at 2.58pm, PS MECDM directed the Director of the NDMO to seek quotes for a trooper and a hilux from Ela Motors and other suppliers.
- On June 18 the Deputy Director NDMO received a quote from United Auto for a Nissan Navarro vehicle which is equivalent to a Land Cruiser but not equivalent to a dual-cab Hilux. The NDMO also received an undated quote from Kosol for a Hyundai Tucson, a medium sized SUV which is not equivalent to either a Toyota Hilux or a Land Cruiser. The supposed competing quotes obtained by the NDMO were not for two vehicles which were comparable to the two vehicles they had indicated they wished to procure.
- On 18 June the Director of the NDMO sought permission from the PS of MECDM to procure a Land Cruiser and a Hilux at the quoted price, even though the quote for the Hilux had not yet been received. Although not mentioned previously the specification was for an all-terrain diesel vehicle capable of carrying 10 people with a winch and tow-bars.
- On 19 June the Director of the NDMO received a quote from Ela Motors for a Toyota Hilux.
- On 23 July the CBT approved the purchase of the vehicles from Ela Motors.
- On 29 July the Payment Voucher was certified as goods having been received.
AOG said ultimately, a Bid Waiver was granted so the fact the NDMO did not have a comprehensive specification and was not doing a serious comparison of possible solutions as detailed in the PCAM is probably overtaken by this.
“Although a Bid Waiver was granted by the CTB, the OAG did not sight the Bid Waiver application so the reasoning behind the waiver is not known,” AOG said.
According to SIG Procurement, in a normal cycle of procurement, up to $10,000, you have to provide one written quote.
From $10,000 to $100,000, you have to provide three written quotes with selection using a comparative bid analysis.
From $100,000 to $500,000, the bid will go through the Ministerial Tender Board competitive tender.
More than $500,000, to go through Central Tender Board (CTB) competitive tender.
However, procurement during State of Emergency, there will be a bid waiver.
Where competitive and simple tendering is not possible a bid waiver request can be used.
A reasonable reason needs to be justified.
CTB approve procurement with value of $100,000 and over and Accountant General is delegated authority for $10,000 to $100,000.
The OAG conducted this audit in accordance with International Standards for Supreme Audit Institutions (ISSAI) namely the ISSAI 400: Compliance Audit Principles and ISSAI 4000: Compliance Audit Standard issued by the International Organisation of Supreme Audit Institutions (INTOSAI).
The objective of this audit was to assess whether the National Disaster Management Office (NDMO) managed COVID-19 Procurement in accordance with relevant laws, policies and regulations of Solomon Islands Government.
These include the Public Financial Management Act 2013, The National Disaster Council Act 1989, Emergency Powers Acts for COVID-19, the Interim Financial Instructions currently in force and the Solomon Islands Government Procurement and Contract Manual (PCAM).
