Wednesday, October 21, 2020

Ministries violate PPADB tender procedures  in multi million rentals

The Ministry of Youth Sports and Culture and the Ministry of Trade and Industry are renting buildings whose leases run into millions of Pula at the new Central District Business without the approval of the Public Procurement and Disposal Board (PPADB).

According to the latest report of the Auditor General, as a result of what appeared to have been improper lease of the office block occupied by the Ministry in the Central Business District in Gaborone, the PPADB instituted a tender audit to establish the circumstances of that tender.

The audit had established that having reached the decision to house all its five departments under one roof to achieve smooth coordination of its functions, the Ministry had in August 2012, proceeded to issue an invitation to tender for the lease of an office block for a period of five years. The response to that invitation was only one bidder who had offered three rental options ranging from P1 579 117 per a month at the top, which included the cost of partitioning, to P1 076 712 at the lowest for an open plan flooring, all inclusive of value added tax.

Upon evaluation, the Ministerial Team had recommended the first option of P1 579 177 to the Ministerial Tender Committee. The Ministerial Tender Committee had however, varied this recommendation in favour of the second option of P1 292 54 on the basis that the cost of the entire partitioning was one-off event which should not be spread over the entire lease period. Thus the approval of the tender by the Ministerial Tender Committee was in the amount of P1 292 054 per month (inclusive of (VAT) translating to P77 523 264 over the entire lease period.

The Ministry signed the lease in June 2013 for a five year period  effective from January 2013 and terminating in December 2017 at a monthly rental of P1 208 763 translating to P81 228 890 for over five years.

The Auditor General found that the lease amount involved over the entire period of the lease is far beyond the authority level of the Ministerial Tender Committee of P25 000 000, and therefore the award of the tender could not have been valid.

This is a matter that should have been referred to the Public Procurement and Asset Disposal Board. The contracted amount of P81 228 890, resulting from negotiations, is far in excess of the amount of P77 523 264 originally tendered by the bidder.

“The Ministry has therefore come off worse from these negotiations and therefore this are not clear to me,” said the Auditor General.┬á

As for the Ministry of Trade, the report states that the Ministry procured the lease with a developer of the office of block and agreement signed in December 2012 for a five year period ending in November 2017 at a monthly rental of P1 013 070 on the authority of the approval of the Ministerial tender Committee. However as the total rental for the five year period amounted to P60 784 200, this was far beyond the expenditure threshold of P25 000 000 appropriate to the committee. When Board audit found that in adjudicating over this tender, the Ministerial tender Committee had failed in its duty to adhere to its expenditure limit and to advise Ministry as the procuring entity to refer the matter to PPADB as the appropriate level of approval for the expenditure involved.

“This is yet another instance where public officers flagrantly disregard clearly laid down rules, resulting in public funds being spent without proper authorities even where large sums of money, calling for extreme care and diligence are involved,” the Auditor General found.┬á

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