An ex­plo­sive in­ter­nal re­port at the Telecom­mu­ni­ca­tions Ser­vices of T&T (TSTT) has de­tailed and raised ques­tions about an over $500 mil­lion deal gone sour.

News of this deal comes against the back­drop of the dis­missal of more than 500 work­ers over the past month, with high op­er­a­tional over­heads be­ing giv­en as the rea­son be­hind the move.

Guardian Me­dia has found that the mis­man­age­ment of a US$84.1 mil­lion deal with CT Mi­a­mi was raised be­cause it al­leged­ly breached sev­er­al of the com­pa­ny’s cor­po­rate poli­cies.

But TSTT re­spond­ed to Guardian Me­dia queries about the re­port on Wednes­day by blam­ing the con­tract lapse on ju­nior man­age­ment.

This is the sec­ond con­tract queried in the in­ter­nal au­dit, which Guardian Me­dia re­ceived a copy of along with a thick file of oth­er doc­u­ments from a whistle­blow­er seek­ing to ex­pose al­leged fi­nan­cial mis­man­age­ment at the com­pa­ny.

Ac­cord­ing to the in­ter­nal re­port, TSTT en­tered in­to a half a bil­lion dol­lar con­tract with US-based CT Mi­a­mi and nev­er signed a for­mal con­tract. TSTT al­so let a three-year con­tract with the same sup­pli­er lapse, which left some 40,300 phones sit­ting idle in a Mi­a­mi ware­house.

The de­tails of the ex­pen­sive lapse and high-lev­el mis­spending are con­tained in a TSTT in­ter­nal au­dit re­port com­plet­ed by Chief In­ter­nal Au­di­tor Randy Mar­cano and sub­mit­ted on June 20, 2018.

Mar­cano’s au­dit re­vealed that the State en­ter­prise had an agree­ment with CT Mi­a­mi as a fourth par­ty lo­gis­tics provider (4PL) for three years be­tween Sep­tem­ber 2017 and Au­gust 2020. That con­tract was val­ued at US$84.1 mil­lion yet the for­mal re­quest for a con­tract ne­go­ti­a­tion was is­sued to the com­pa­ny more than a month af­ter the con­tract was al­ready award­ed.

A 4PL provider is a com­pa­ny that is in­te­grat­ed in­to the sup­ply chain. Un­der the arrange­ment, the ex­ter­nal com­pa­ny is re­tained to as­sem­ble and man­age all re­sources, ca­pa­bil­i­ties and tech­nol­o­gy for TSTT’s mo­bile de­vices. The con­tract was al­lowed to lapse by TSTT.

Guardian Me­dia learned that part of the agree­ment was the sup­ply of 56,300 mo­bile phones val­ued at US$84.1. How­ev­er, the ab­sence of a for­mal agree­ment left CT Mi­a­mi hold­ing some 40,300 phones val­ued at US$29m for TSTT.

The au­dit re­port said TSTT Chief Ex­ec­u­tive Of­fi­cer Ronald Wal­cott was not aware of the is­sue de­spite the size of the con­tract be­cause it was nev­er es­ca­lat­ed by the se­nior man­ag­er.

Ac­cord­ing to the in­ter­nal re­port, in May 2018 the own­er of CT Mi­a­mi, Samuel Ohev-Zion, met with Wal­cott, chief fi­nan­cial of­fi­cer Rakesh Goswa­mi and the vice pres­i­dent Mo­bile to dis­cuss the “non-re­new­al of the ex­pired 4PL con­tract.” At that meet­ing, the group al­so dis­cussed the sta­tus of 40,300 phones or­dered since Oc­to­ber 2017 that were still at the CT Mi­a­mi ware­house.

“TSTT’s CEO was not aware of these is­sues pri­or to this meet­ing,” the au­dit said.

The re­port al­so found a breach of the com­pa­ny’s poli­cies, in that the or­ders for the hand­sets, de­spite be­ing val­ued at mil­lions of dol­lars, were “on­ly signed by the Man­ag­er Mo­bile Sup­ply Chain and the Se­nior Man­ag­er IOT and De­vices” in an ap­par­ent breach of nor­mal pol­i­cy.

“In­ter­est­ing­ly, there was no cor­re­spond­ing pur­chase or­der seen to cov­er the hand­set or­ders of the 56,300 phones,” the re­port not­ed.

“Fur­ther, if the 40,300 phone ship­ment was not ac­cept­ed by TSTT, the com­pa­ny could be charged re­stock­ing fees and fi­nance costs of ap­prox­i­mate­ly $12 mil­lion TT dol­lars.”

The com­pa­ny, how­ev­er, de­nied that it paid any re­stock­ing fee but pro­vid­ed no fur­ther de­tails. In fact, it said Wal­cott “man­aged” the process to elim­i­nate the “pos­si­bil­i­ty of any li­a­bil­i­ty ac­cru­ing.”

Ac­cord­ing to the au­dit, when Wal­cott learned about the is­sue he re­quest­ed an in­de­pen­dent re­view in­to how the CT Mi­a­mi deal was de­layed and left to ex­pire and how TSTT or­dered 40,300 phones from the com­pa­ny with­out a signed con­tract.

The 4PL con­tract was al­ready run­ning for some nine months by the time Wal­cott learned of it “de­spite CT Mi­a­mi win­ning the Re­quest for Pro­pos­al and be­ing is­sued a let­ter of award on Oc­to­ber 6, 2017,” the in­ter­nal au­dit said.

There is a lo­cal arm of the CT Mi­a­mi com­pa­ny—CT Trinidad—and ac­cord­ing to the au­dit, the lo­cal records show that TSTT had or­dered an­oth­er $71 mil­lion in phones from that com­pa­ny af­ter the con­tract ex­pired in Au­gust 2017. This means that those or­ders were placed with no con­tract in place.

The au­di­tor al­so asked why mul­ti-mil­lion dol­lar phone or­ders were con­tin­u­al­ly placed af­ter the con­tract ex­pired.

Ac­cord­ing to the in­ter­nal au­dit doc­u­ment, on Oc­to­ber 2, 2017, TSTT or­dered some 40,300 phones from CT Trinidad val­ued at $29 mil­lion. That or­der was not filled and the phones were still sit­ting at the CT Mi­a­mi ware­house. De­spite that and the ex­pired con­tracts, TSTT placed five more or­ders to the same com­pa­ny with­out a con­tract in place.

On Oc­to­ber 3, 2017, one day af­ter the 40,300 phone pur­chase, TSTT made an­oth­er pur­chase of 4,400 phones val­ued at $15.3 mil­lion. One month lat­er, by No­vem­ber 13, 2017, a third or­der was placed for 11,600 phones val­ued at $12.9 mil­lion.

“When ques­tioned about the au­thor­i­ty used to ef­fect these pur­chas­es with an ex­pired con­tract, the VP Mo­bile in­di­cat­ed that the con­tract was ex­tend­ed by virtue of the ven­dor con­tin­u­ing to pro­vide ser­vices and TSTT pay­ing for those ser­vices based on the pre-ex­ist­ing con­tract terms,” the re­port said.

Un­der the head­ing “Ra­tio­nale for Pur­chas­es,” the au­di­tor not­ed that ac­cord­ing to in­for­ma­tion gath­ered dur­ing the in­ves­ti­ga­tion, the phones were pur­chased in prepa­ra­tion for an ap­proved 2017 Christ­mas cam­paign.

“Even so, the num­ber of hand­sets or­dered were less than pre­vi­ous years, giv­ing con­sid­er­a­tion to the ex­treme­ly slow hand­set sales dur­ing 2017 aris­ing from the re­moval of the pre­paid sub­sidy, as well as the eco­nom­ic down­turn,” the re­port said.

“Ag­gres­sive sub­si­dies were planned for this cam­paign, but the im­ple­men­ta­tion of aus­ter­i­ty mea­sures in No­vem­ber 2017 meant the in­tend­ed sub­si­dies had to be re­viewed and the prices re­vised. Ad­di­tion­al­ly, the lack of pay­ment to CT Mi­a­mi for pri­or or­ders jeop­ar­dised their abil­i­ty to de­liv­er the 40,300 phones in time for the cam­paign and re­sult­ed in the Se­nior Man­ag­er IOT & De­vices un­suc­cess­ful re­quest to can­cel the or­der,” the re­port not­ed.

The re­port al­so point­ed out that there was no ev­i­dence to sug­gest that ei­ther the sta­tus of the phones or the fi­nan­cial im­pact to the com­pa­ny was dis­cussed with the TSTT CEO, the lead­er­ship or the board.