Shal­iza?Has­sanali

An au­dit in­to the con­tro­ver­sial Ca­roni Green Ini­tia­tive (CGI) project con­duct­ed by Ernst and Young Ser­vice Ltd has shown that more than $9 mil­lion of tax­pay­ers' mon­ey has been spent on the agri­cul­tur­al project with farm­ers and cit­i­zens reap­ing lit­tle re­turns.

The project, launched on June 5, 2013, by then food pro­duc­tion min­is­ter De­vant Ma­haraj was pro­posed to Cab­i­net as an agri­cul­tur­al de­vel­op­ment plan to cul­ti­vate 5,800 acres of veg­eta­bles and root crops in three phas­es, over a two-year pe­ri­od.

It was de­signed to help re­duce the food im­port bill, de­crease food in­fla­tion, and al­low for­mer work­ers of Ca­roni 1975 Ltd to cul­ti­vate their unutilised two-acre plots in ex­change for guar­an­teed pay­ment and earn­ings.

At that time, Cab­i­net ap­point­ed Ca­roni 1975 Ltd as project man­ag­er for CGI and agreed that the Agri­cul­tur­al De­vel­op­ment Bank (ADB) would fi­nance the cul­ti­va­tion of the lands by way of a $4 mil­lion loan. Ca­roni 1975 Ltd in­vest­ed $5,182,741.07 of its re­sources in­to CGI over the pe­ri­od March 2013 to Jan­u­ary 2014.

Af­ter six months in op­er­a­tion CGI was scrapped and the min­istry in De­cem­ber of 2013 took the de­ci­sion to es­tab­lish Ca­roni Green Ltd (CG), a state com­pa­ny chaired by Nigel Grimes to man­age the con­tro­ver­sial project, with the Gov­ern­ment pump­ing $22 mil­lion in­to the new ini­tia­tive.

The au­dit was leaked to the Sun­day Guardian one week af­ter Par­lia­men­tary Sec­re­tary in the Min­istry of Agri­cul­ture, Land and Fish­eries Avinash Singh promised to launch a sep­a­rate au­dit in­to the Ca­roni Green project, stat­ing that they could not ac­count for monies in­vest­ed in the project.

A pe­rusal of the 48-page man­age­ment re­port en­ti­tled "Pro­cure to Pay and Con­tract Com­pli­ance Re­view" showed that Ernst and Young was en­gaged by Ca­roni 1975 Ltd to con­duct an in­de­pen­dent re­view of the project from Jan­u­ary 2013 to Jan­u­ary 2014.

The au­dit re­port dat­ed June 27, 2014, re­vealed a string of prob­lems with the project, rang­ing from no ac­count­abil­i­ty, con­flict of in­ter­est which en­tailed a cer­tain man­ag­er sup­ply­ing com­put­ers and soft­ware to his em­ploy­ers, dis­crep­an­cies with con­tracts, spoilage of crops, du­pli­ca­tion of work, in­ac­cu­rate yield and sales record­ed, crops giv­en away and some­times sold to in­di­vid­u­als as op­posed to in­sti­tu­tion­al buy­ers, cash re­ceived and de­posit­ed but not ac­cu­rate­ly ver­i­fied, poor land prepa­ra­tion, farm­ers aban­don­ing their fields, and pay­ment vouch­ers not be­ing ap­proved and signed by the au­tho­rised per­son for the dis­burse­ment of cash.

An­oth­er ma­jor fac­tor that pre­vent­ed the project from be­com­ing vi­able was an in­ex­pe­ri­enced team, a skele­tal staff, and staff not fol­low­ing prop­er poli­cies and pro­ce­dures.

Weak­ness iden­ti­fied

"Due to the low lev­el of con­trol con­scious­ness, ac­count­abil­i­ty is al­most non-ex­is­tent with CGI. From process own­ers to man­age­ment per­son­nel, there was no ac­tion tak­en in in­stances of non-con­for­mance to ex­pect­ed pro­ce­dure. Ad­di­tion­al­ly, un­time­ly and in­ac­cu­rate in­for­ma­tion and poor com­mu­ni­ca­tion are the ma­jor con­tribut­ing fac­tors to the ar­eas of weak­ness iden­ti­fied," the au­dit stat­ed.

The project was man­aged by De­osaran Ja­groo, for­mer CEO of Ca­roni 1975 Ltd, while Kevin Singh was the CEO and chief fi­nan­cial of­fi­cer.

It was re­vealed that the project's ex­pen­di­ture as of Jan­u­ary 31, 2014, was $9,182,741.07, while ac­tu­al sales were tab­u­lat­ed at $1,797,944.47.

Of the $9 mil­lion spent, $4,178,622 was in­ject­ed in­to land prepa­ra­tion; $1,565,157 for chem­i­cals; $934,154 for seedlings; and $2,428,115 for ad­min­is­tra­tive ex­pens­es.

The farm­ers were the least to ben­e­fit with pay­ments of $76,693 be­ing paid to them, while piles of har­vest­ed crops were left to rot in fields and con­sumers nev­er ben­e­fit­ed from low­er food prices.

Due to the ur­gency to be­gin the project, Ernst and Young stat­ed, a num­ber of is­sues arose as CGI did not have the time to de­vel­op strate­gic plans, which led to in­ef­fec­tive de­ci­sion-mak­ing.

The au­dit showed that sev­en farm­ers aban­doned their fields be­cause CGI did not pro­vide prop­er land prepa­ra­tion, re­sult­ing in poor yields.

The ac­count­ing firm stat­ed that a re­pay­ment strat­e­gy or a penal­ty for farm­ers was not out­lined in the farm­ers' con­tracts.

"It is un­clear whether CGI could be suc­cess­ful in get­ting farm­ers to ac­cept re­spon­si­bil­i­ty for the aban­don­ment of their crops," the re­port stat­ed.

CGI had en­gaged 23 farm­ers to de­vel­op 57 fields with 20 types of crops. As of March 28, 2014, sev­en farm­ers had aban­doned nine fields, com­pris­ing 111.6 acres.

It al­so showed that one con­tract is­sued to a farmer was dif­fer­ent from the stan­dard con­tract used to en­gage oth­er farm­ers

The re­port showed dis­crep­an­cies with con­tracts in­volv­ing four farm­ers.

In sev­er­al in­stances, the re­port stat­ed that in­for­ma­tion was not pro­vid­ed for the as­sess­ment of farm­ers by CGI, while there were no stan­dard doc­u­ments used to record the yield or sales of crops from Au­gust to mid-Oc­to­ber 2013.

From Au­gust to mid-Feb­ru­ary, the re­port stat­ed, "re­ject­ed and spoiled pro­duce was not con­sis­tent­ly and ac­cu­rate­ly record­ed and tracked."

It was not­ed that CGI did not have prop­er stor­age fa­cil­i­ties which con­tributed to reg­u­lar spoilage of pro­duce.

Goods that were not sold were stored in an out­door shed, which had no cold stor­age fa­cil­i­ty.

The re­port showed pho­tographs of sev­er­al heaps of rot­ted me­l­on­gene dis­card­ed in a field.

"This lack of plan­ning and sched­ul­ing, cou­pled with an in­ad­e­quate stor­age fa­cil­i­ty re­sult­ed in loss­es for CGI and the farmer," the re­port stat­ed.

In a bid to get har­vest­ed crops off their hands, CGI gave cred­it to whole­salers and farm­ers, sold the goods be­low the con­tract price, and gave away to in­di­vid­u­als.

"CGI did not have the ca­pa­bil­i­ty to take the pro­duce to mar­ket or sell on the field. They were ill-pre­pared to un­der­take the mar­ket­ing and sale of pro­duce," the au­dit stat­ed.

While Ernst and Young not­ed that the re­spon­si­bil­i­ty for fol­low­ing up on pay­ment from cred­i­tors was not del­e­gat­ed to a spe­cif­ic per­son, the CGI man­ag­er stat­ed that le­gal ac­tion was be­ing tak­en against farm­ers who owed them large sums of mon­ey for pro­duce.

Ernst and Young al­so stat­ed that they could not con­firm that all cash re­ceived on the field was sub­mit­ted to the ad­min­is­tra­tive as­sis­tant, while re­ceipt books were not re­strict­ed to au­tho­rised per­son­nel and pay­ment vouch­ers com­plet­ed for the dis­burse­ment of cash were not con­sis­tent­ly ap­proved or sup­port­ed.

It was al­so dis­cov­ered that there were "12 pay­ment vouch­er num­bers miss­ing from the se­quence."

Al­though the ac­count­ing firm was hired to re­view the project from Jan­u­ary 2013 to Jan­u­ary 2014, they al­so record­ed 227 pay­ment vouch­ers for the pe­ri­od Feb­ru­ary 2014 to May 2014 that were not pre-num­bered or tracked to al­low for ease of re­port­ing, while they were un­able to match the cash re­ceipts to the bank de­posit slips, as this in­for­ma­tion was not record­ed.

Ernst and Young stat­ed that "the con­trol en­vi­ron­ment around the stor­age and man­age­ment of cash at CGI was weak."

The au­dit re­vealed that CGI laid no em­pha­sis on "ac­count­abil­i­ty and there was lack of doc­u­ment­ed poli­cies and pro­ce­dures and in­ad­e­quate guid­ance."

In con­clu­sion, Ernst and Young rec­om­mend­ed that CGI de­vel­op an or­gan­i­sa­tion­al struc­ture to be ap­proved by a board of di­rec­tors, farm­ers' con­tracts be re­viewed and amend­ed, har­vest­ing and cash process­es be re­viewed, ad­e­quate stor­age fa­cil­i­ties be de­vel­oped and an ac­count­ing sys­tem to track op­er­a­tional ac­tiv­i­ties be im­ple­ment­ed.

'Witch hunt'

Ad­mit­ting that there were in­con­sis­ten­cies with the project, for­mer food pro­duc­tion min­is­ter De­vant Ma­haraj said if the min­istry want­ed to un­der­take an­oth­er au­dit, it would be done at the tax­pay­ers' ex­pense.

He said since CG was formed the project has yield­ed re­sults.

"I don't know if the PNM want to throw away mon­ey. The PNM con­tin­ues its witch hunt­ing ex­er­cise."

Ma­haraj said he nev­er or­dered that CGI be rushed.

"That au­dit was com­mis­sioned by me based on the com­plaints I got from farm­ers. I was dis­pleased with the im­ple­men­ta­tion of the project."

Ma­haraj said of the $22 mil­lion CG re­ceived $14 mil­lion was still in its cof­fers when he left of­fice.

Ma­haraj has since in­sist­ed that CG has main­tained a healthy fi­nan­cial stand­ing, op­er­at­ing well with­in its ap­point­ed stip­u­la­tions and con­tin­u­ing to low­er the food im­port bill.

The com­pa­ny, up to Au­gust 2014, Ma­haraj said, har­vest­ed 290 met­ric tonnes of pro­duce, some of which were sup­plied to the Na­tion­al School Feed­ing Pro­gramme.

Grimes: I will await the out­come of PNM's au­dit

Chair­man of CG Nigel Grimes said he was not privy to the first au­dit.

"If an­oth­er au­dit is be­ing con­tem­plat­ed by the min­istry on Ca­roni 1975 Ltd and its project CGI, I would pre­fer to await the out­come of the au­dit be­fore com­ment­ing."

Singh: There was lack of ac­count­abil­i­ty

Kevin Singh said he saw and read the re­port.

"There was a lack of poli­cies, pro­ce­dures and sys­tems in place. There was lack of ac­count­abil­i­ty. All the find­ings in the re­port are cor­rect."

Asked what cre­at­ed the prob­lems, Singh said he pre­ferred not to say "be­cause I don't know where this mat­ter will reach."

Singh said Ja­groo who was in charge of the project no longer worked at Ca­roni 1975 Ltd.

"I was just the chief fi­nan­cial of­fi­cer."

Ques­tioned if it was a case of the can­dle cost­ing more than the fu­ner­al, Singh said if the pro­duc­tion cost was $9 mil­lion and sales were $1.7 mil­lion "what do you ex­pect?"

Ja­groo: I was not giv­en an op­por­tu­ni­ty to ex­am­ine au­dit

Ja­groo said af­ter he left Ca­roni 1975 Ltd he was nev­er shown a copy of the au­dit.

"I did not see it (au­dit) and no­body came to ask me any ques­tions. I was not giv­en an op­por­tu­ni­ty to ex­am­ine its con­tents. I heard all of the prob­lems, but noth­ing was brought to my at­ten­tion. I don't want to get in­to these things at all. I am a pri­vate per­son now."

Ramb­harat: Min­istry pro­pos­es to get le­gal ad­vice on au­dit

Min­is­ter of Agri­cul­ture, Land and Fish­eries Clarence Ramb­harat in re­sponse to a text mes­sage yes­ter­day wrote, "I have read the fi­nal au­dit. There will be no fur­ther au­dit on CGI at this time. The min­istry pro­pos­es to get le­gal ad­vice on the fi­nal au­dit re­port. Ca­roni Green Ltd is cur­rent­ly un­der re­view as part of the min­istry's re­view of all its state com­pa­nies and agen­cies."

Project man­ag­er de­nies wrong­do­ing

Busi­ness­man Suren Singh has de­nied any wrong­do­ing in his sup­ply­ing IT equip­ment to Ca­roni 1975 Ltd, while he worked as project man­ag­er of the Ca­roni Green Ini­tia­tive (CGI) project.

But a 2014 au­dit un­der­tak­en by Ernst and Young in­to the project has deemed a Ju­ly 2013 busi­ness trans­ac­tion by Singh who man­ages Sil­ver Net­worx as "a pos­si­ble con­flict of in­ter­est."

The au­dit iden­ti­fied Singh as the project man­ag­er for CGI. The au­dit stat­ed the pur­chas­es were au­tho­rised by CGI man­ag­er De­osaran Ja­groo.

"The CGI man­ag­er stat­ed that Ca­roni made pur­chas­es from Sil­ver Net­worx in the past and was sat­is­fied with the items. As such CGI pig­gy­backed on this same ven­dor in the pur­chase of IT equip­ment," the au­dit stat­ed.

Singh de­fend­ed the sale of two Dell In­sp­iron 3520 lap­tops, one Sage Quan­tum Peachtree ac­count­ing soft­ware, com­put­ers, serv­er, print­er and router to­talling $80,300 to Ca­roni 1975 Ltd, un­der which the pro­gramme was man­aged, stat­ing that he did "every­thing above board. It's on­ly a con­flict of in­ter­est if you don't state your busi­ness. All the man­agers knew that I sup­plied com­put­ers to the com­pa­ny."

The lap­tops and ac­count­ing soft­ware were val­ued at $38,000 while the com­put­ers, serv­er, print­er and router were priced at $42,300.

Singh said it was not his fault if the state-owned com­pa­ny did not fol­low prop­er ten­der­ing pro­ce­dures.

Singh said he start­ed work­ing at Ca­roni 1975 Ltd in 2007 as an IT con­sul­tant and be­came a sup­pli­er for the com­pa­ny.

In 2010, he was put on the com­pa­ny's pay­roll.

For years, Singh said, he had been sell­ing com­put­ers to Ca­roni 1975 Ltd while work­ing there.

"I sold a lot. All their com­put­ers came from me."

The au­dit stat­ed that the Peachtree soft­ware was not utilised to record and re­port the sales and ex­pens­es in­curred dur­ing their pe­ri­od of re­view.