Report: Summit $60M over budget
By Andre Bagoo Sunday (Newsday)
November 27 2011
THE FIFTH Summit of the Americas, held in this country in 2009, went over-budget by in excess of $60 million but the final cost cannot be known, according to a special report on the event by Auditor General Sharman Ottley, who found failures of planning and huge gaps in documentation in relation to the $563 million event.
In a special 49-page report submitted to the Office of the Prime Minister, which has been obtained by Sunday Newsday, Ottley found that:
* The original budgeted cost was $503 million, but actual cost may have been in excess of $563 million with huge gaps in accounting documentation, with 23 Cabinet minutes apparently missing;
* The cost of Brian McFarlane’s opening ceremony was $19.1 million; Summit accommodation cruise-ships cost $125.5 million;
* Because of poor coordination, the dates of the Summit had to be shifted at a relatively late stage from original dates of April 16 to April 18, 2009, to April 17 to April 19, 2009 due to the limited availability of cruise-ships to act as accommodation;
* The State incurred a $6.3 million penalty due to late filing of paperwork in relation to the chartering of cruise-ships for the event;
* Due to tardiness, the State was virtually held to ransom, procuring services without open tender on a sole selective basis. In one instance, this resulted in a bill for $70 million for “telecommunication services”; and
* There were clear breaches of State regulations in terms of the accounting for the event.
“We found that the majority of activities involved in planning the 5th Summit occurred during the period 2008 March to 2009 April in spite of the fact that Cabinet gave its approval to host the event in April 2006,” the Auditor General noted in the February 4 special report.
“We found that despite the significant level of expenditure to be incurred for the 5th Summit, a system was not put in place to capture the overall cost. As a result, the total cost of hosting the 5th Summit was not determined and the net financial cost of the event is not known.”
There were problems with State records examined, including the fact that: correspondence contained in procurement files did not carry folio numbers; evaluation reports seen were not signed by the entire evaluation committee; recommendations to the ministerial steering committee of preferred tenders were not seen on file; and documented requests for goods and services from user departments were not seen. Also, the Office of the Prime Minister did not report to the Auditor General and records provided by the public service detailing costs appeared incomplete.
“Annual Financial Statements were not presented by the Accounting Officer of the Office of the Prime Minister. This contravenes instructions issued by the Comptroller of Accounts,” Ottley remarked.
There were huge chunks of expenditure not approved by Cabinet.
“Expenditure for the 5th Summit totalling TT$445,823,599 was seen to have been approved by Cabinet in various Cabinet minutes,” the report noted.
“A request for a complete listing of all Cabinet minutes relating to the 5th Summit was made to both the Double Secretariat and the Cabinet Secretariat.
“A comparison of the lists received revealed that 23 Cabinet minutes were not included on the list from the Cabinet Secretariat. As such, there was a level of uncertainty as to the total expenditure approved by Cabinet for the 5th Summit.”There was also “the lack of a clear audit trail”. Expenditure relating to the 5th Summit was not recorded separately from that of the Commonwealth Heads of Government Meeting (CHOGM).
While the permanent secretary of the Office of the Prime Minister—not named in the report—told the Auditor General that the cost of the summit was $274 million, the Auditor General remarked, “There are concerns as to the accuracy of this statement due to the following: the omission of administrative expenditure such as staff salaries, stipends, honoraria and rental of office accommodation, and the uncertainty as to whether commitments were included.”
Further, “despite the sums involved, the budget was not subject to any expert review or testing. We found no evidence that consultation was sought with other government agencies and/or experts in the field in developing the budget for the 5th Summit”.
The budgeting for the event was also incomplete, the report said.
Of the total budget, the Auditor General noted, “The funding requirements to host the 5th Summit, estimated at TT$503 million, were not known until 2008 June, less than one year before the event. The methodical development and preparation of the budget of TT$503 million for the 5th Summit by experts in the field was not seen. This budget was prepared by one individual (not named).”
A monitoring mechanism was not formally instituted between the Tourism Development Corporation and the Double Secretariat regarding the procurement of cruise-ship accommodation used to make up for the shortfall of hotel rooms.
At the end of the day, the Auditor General saw a silver lining, noting the event was a learning experience for the country. “It is to be noted however that the Fifth Summit of the Americas was held without major incident or negative consequence and provided an opportunity for learning and growth in the planning, organising and managing of international events,” she said in the last paragraph of the report.
The summit was hailed as a high-point in this country’s history and as an achievement for the administration of former prime minister Patrick Manning.
The event, attended by US president Barack Obama, generated $22.4 million in revenue.
