A contract for a construction project at the Sandilands Rehabilitation Centre (SRC) is among the contracts that the National Insurance Board (NIB) Audit Report has found was unfairly awarded because of suspended NIB Director Algernon Cargill.
The report prepared by auditors from the firm Grant Thornton shows that Telco Enterprises Limited was paid a total of $12, 396,219.77 as of December 22, 2011 for the SRC Robert Smith Child and Adolescent Centre and Special Education Unit construction project.
The report further notes that the owner of Telco is a relative of Mr. Cargill’s; a fact the report states was not brought to the Board’s attention earlier in the tender selection process.
“Grant Thornton found that only after the bid elimination process was completed and Telco was determined the winner, did Mr. Cargill indicate to the Board that the owner of Telco was a relative of his. We found it interesting that the Director did not make this relationship clear to the Board at an earlier point in the tender selection process,” the report states.
The report found that Mr. Cargill exercised “significant control and influence” over operations at NIB and auditors called it “interesting” that while Telco was in the process of winning a contract for $8,653,660.25 but disclosure of Mr. Cargill’s relationship to the company was limited.
The audit found that in none of the subsequent financial statements is there disclosure that concerning the relationship between Telco and Mr. Cargill.
The report says that despite discrepancies with the tender selection process and members of the tender committee raising complaints, the Board nonetheless proceeded with awarding the contract to Telco.
In addition to the $8,653,660.25 awarded to Telco, the company received an additional $3,472,989.24 for additional project costs.
Grant Thornton notes that the Board approved the tender offer of Telco without any further discussion concerning the relationship of Mr. Cargill and the company.
The report also highlights some other factors that may have disqualified Telco from being awarded a contract with NIB.
“Based on information provided to Grant Thornton by NIB, Telco Enterprises Ltd.’s National Insurance contributions may not have been current when it was awarded the $8,653,660.25 Sandilands Rehabilitation Centre Construction contract in 2009. NIB’s records indicate that Telco made contributions to NIB totaling $2,362.98 in 2009,” the report said.
It was also noted by NIB that Telco had zero months closed in 2009 and it noted that the company generally hired immigrants.
