No bidding for key NIB works
Guardian News Editor
Published: May 07, 2013
Auditors examining certain transactions at the National Insurance Board (NIB) said they were unable to confirm whether NIB Director Algernon Cargill and the owner of Kenuth’s Electric were friends as alleged by former NIB Chairman Greg Moss, and the examiners were unable to find evidence of written contracts between the board and the company in some instances.
In a letter he wrote to Minister of Labour and National Insurance Shane Gibson last November, then Chairman Moss said the records of NIB substantiate that the sum of $2,093,619.82 was paid directly by NIB to Kenuth’s Electric for work performed on NIB properties during the period December 9, 2008 to August 29, 2012.
Moss said that is a substantial sum and constitutes an average direct payment by NIB to Kenuth’s of $46,524.89 per month for 45 months.
“That fact alone raises serious concerns,” Moss said in that letter.
But supporting documents at NIB show that the total in the allegation letter was duplicated and actual payments of just over $1 million were made.
Grant Thornton said it attempted to interview Kenuth Knowles, the company’s owner, on these matters, but a person purporting to be Knowles called the auditors and advised them to speak with his lawyer.
The auditors said Kenuth’s was the sole electrical contractor who was engaged for the electrical repairs and maintenance for all NIB buildings in Nassau.
The auditors examined various procedures performed by the company over the period in question.
Among the work performed by the company was at the Ministry of Tourism building. Kenuth’s was paid $410,762.88 but the work was not put to tender, the report said.
“Further, we have not seen any contract for the significant work performed,” it added.
The auditors said it would have been “prudent” to control costs and enhance accountability by sending this project to tender.
The report also said there was a lack of tendering for other contracts granted to Kenuth’s.
Grant Thornton engaged the services of Applied Consultants & Engineering (ACE) to issue a report based on the review of invoices and payments made to Kenuth’s Electric Company Ltd.
Among other things, ACE determined the labor rate was inconsistent and no invoice was present in the case of several of the transactions reviewed.
“It does not appear that labor rates on invoices were checked consistently and queried by NIB’s project manager,” the auditors said.
The report also said there were no contract documents available for review on work performed at Sandilands Rehabilitation Centre by Kenuth’s.
Although Cargill did not make himself available to be interviewed by the auditors, in his court-filed affidavit, he said he and Knowles have never been colleagues as was also alleged by Moss.
In his letter to Gibson, Moss alleged that Kenuth’s was a major subcontractor for numerous NIB contractors in the total amount of $8.304 million for the period 2007 to 2012.
But Cargill said, “The various contracts approved by the board of directors of NIB, in which Kenuth’s Electric was awarded subcontracts, would have been independent decisions of the contractors. I would not have been involved in the decision-making.
“The minutes of the board will reflect, with respect to the mini-hospitals in Abaco and Eleuthera, that Kenuth’s Electric was nominated by the general contractors and approved as the electrical subcontractor due to the board’s decision to standardize all subcontractor services for these projects with reputable subcontractors...”
Cargill also explained that NIB’s Project Manager Osbourne Moxey, an engineer, had recommended that, due to the specificity of electrical work required, NIB did not engage a variety of electricians for various projects so as not to compromise the environment and to be able to determine which company was at fault.”
The issue of contracts to Kenuth’s is just one that was addressed extensively by the auditors.
Minister Gibson is expected to soon table the Grant Thornton report in the House of Assembly.
Cargill has been on paid leave since last November, just after Moss sent the minister the letter advising that the board of NIB had voted to terminate Cargill.
It is unclear at this point what the director’s fate will be.
He has sued both Moss and NIB in relation to the allegations made against him. That matter is pending before the courts.