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Auditor General exposes RDA fraudBy Mukosha Funga on 6 Apr 2017
The latest Auditor General’s Report has revealed that the Road Development Agency awarded contracts to 32 companies worth over K11 billion without supervising consultants, leading to shoddy works.
And the report further revealed that RDA over procured works by over K4 billion against the approved parliamentary budget provision.
Meanwhile, contrary to the Attorney General’s recommendation, there were excessive project variations of between 50 and 400 per cent against the acceptable 25 per cent threshold of the contractual sum.
The Auditor General reported that most contractors carried out works without supervision as engineering consultants were only engaged as late as 22 months in some cases.
“During the period under review, 32 contractors with a contract sum of K11,675,882,234 were engaged and commenced work prior to the engagement of supervising consultants. In some cases, supervising consultants were engaged as late as 22 months after the commencement of works. In this respect, contractors executed works without supervision,” read the report in part.
The Auditor General also noted that 29 projects with initial contract sums of K8 billion were procured and commenced without detailed designs, leading to faults in the projects.
“The purpose of designs is to comprehensively identify the scope and cost of the project and eliminate inappropriateness, inefficiency, error, omission, fault or other defects during implementation and in use. The designs are also a major input in the tendering process. In order for the contractors to be able to execute works correctly, RDA is required to provide them with detailed engineering road designs,” the Auditor General reported.
“However, contrary to this requirement, 29 projects with initial contract sums of K8,011,422,391 were procured and commenced without detailed designs. The absence of detailed road engineering designs led to preparation of inaccurate BoQs which in turn led to variations in the contracts, re-scoping of works and extension of time thereby delaying the completion of projects.”
The Auditor General also reported that RDA had over procured projects thereby incurring interests and standing time claims.
“A comparison of the approved annual budget and the unconstrained budget for the period under review revealed that although the Agency received actual funds equivalent to 92 per cent of the annual work plan budget, the budget was significantly small compared to the unconstrained budget,” the report read in part.
“For example in 2015, the unconstrained budget was K10,956,976,000 while the approved budget was K6,624,938,774. The actual funding was K6,318,438,922 which was 95 percent of the approved budget, but only 58 percent of the unconstrained budget. It was however observed that roads were procured at unconstrained levels thereby resulting in cash flow problems which in turn resulted in interest and standing time claims.”
The Auditor General also discovered that there were excessive project variations of between 50 and 400 per cent
“Guidance from the Attorney General provided that as per best practice, all variations shall not exceed 25 percent of the contractual price. However there were excessive variations on certain contracts ranging from 50 percent to 400 percent,” the Auditor General reported.
And the report revealed that RDA owes contractors almost K2 billion as of December 2016.
“Once a contractor’s claim for payment is certified by the supervising consultant, RDA is obliged to settle the claim within 28 to 56 days failure to which the contractor is entitled to charge interest on the outstanding claim. An amount of K3,572,567,083 relating to a sample of 52 projects had been certified out of which K2,262,026,893 had been paid leaving a balance of K 1,777,790,549 outstanding for periods ranging from 28 to more than 400 days resulting in contractors and consultants charging interest amounting to K141,590,074 as of December 2016,” the report read in part.
And the Auditor General also revealed that most subcontractors had been single sourced, without meeting the requirements.
“There was no evidence that the selection and recommendation for award of tenders to subcontractors on all the contracts followed a competitive and transparent process,” read the report in part.
About Mukosha Funga
Interested in good governance and youth empowerment.
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