By Tabora Bojang
Auditors have flagged a risk of potential misappropriation of public funds due to overpayments exceeding the contract sum in the construction of 38km roads in North Bank by D377,696,321.87.
The contract is reportedly awarded to Arezki Construction Company and starts from Sabach Sukoto to Bambali, Sarakunda to Ngayen Sanjal, covering a distance of 38km.
During the 2023 audit, it was noted that these project was contracted for 16 calendar months from 13th October 2020 to March 2022 with an addendum of six months from November 2020 to March 2022 but the contract period was not adhered to, and work went on for an extra 22 months.
According to the auditors, the original contract sum of the project was D757,302,617.04 but the figure rose to D1,121,421,576.48 after the contract was extended for six months.
However, the auditors said reconciliation between the payment vouchers and the contract sum revealed that D1,499,117,898.35 was instead paid to the contractor leaving discrepancies amounting to D377,696,321.87 between the contract sums and the payments made to the contractor. “There is a risk of potential misappropriation of public funds due to overpayments exceeding the contract sum. This may result in the overstatement of expenditures in the financial statements,” the auditors warned. The report alleged that the Ministry of Works was engaged, but yet to provide the management response leaving the audit finding unresolved.
Failure to deduct withholding tax on Banjul roads project
The auditors also reported that the government has made payments amounting to D4,49,229.75 and D10,411,350 to Studi International for Africa for consultancy services in connection with the rehabilitation of roads, drains and sewage systems in Banjul without subjecting it to the required 15 percent withholding tax deduction for non-resident persons providing technical services as mandated by GRA.
In the management response, the government explained that there is a clause in the contract which states that “any local taxes chargeable in respect of the contract for the services provided by the consultant shall be reimbursed by the client to the consultant. As a result, the project opted not to deduct the 15 percent withholding tax.”
Kiang West road contract awarded to Gai Enterprise without open bidding
The 2023 audit further noted that GAI Enterprise was awarded the contract for the Kiang West Road Phase 2 measuring 48km valued at D 857,841,842.15, just six months after the company was awarded Phase 1 measuring 39km and valued at D349,759,040
The report stated that the GPPA “no objection” approval indicated that the justification for the direct award was based on considerations of economies of scale, avoidance of additional mobilisation costs, and the need for speedy execution but the auditors were of the view that given the significant contract value and the scale of the project it should have been subjected to open competitive bidding to ensure transparency, value for money, and equal opportunity for other qualified contractors.
They also observed that at the time of awarding Phase 2 to Gai Enterprise it had barely commenced work on Phase 1.
