Investigation Uncovers Improper Payment of K4.56 Million To Construction Company In Manus Province

The Ombudsman Commission’s investigation revealed that a purported payment of K4,565, 500.00 was improperly approved to be paid to a private Road Construction Company in Manus Province for the hire of their Isuzu Dump Truck Vehicle for road construction at a fixed hire rate of K2,500 per day after being approved by the Department of Works and Highways and the Department of Treasury.

The investigation revealed that the purported payment was approved without compliance to the mandatory requirements set out under the National Procurement Act 2018 and the Public Finances (Management) Act 1995 which are laws that provide for the prudent management of public monies.

Mandatory state procurement processes and tender requirements under the National Procurement Act 2018 and the Public Finances (Management) Act 1995 were not complied with during the initial engagement of the contractor.

The investigation also reveals that the construction company that submitted the claim to the Department of Works & Highways was not legally registered as a business entity with the Investment Promotion Authority when it entered into a retainer agreement with the Department of Works in February 2017 as it was only registered on 11 December 2018.

The Commission notes that a total of five (5) invoices were submitted by the contractor between 2017 and 2021 at a rate of K2, 500 per day and K900, 000 per year without the issuance of certificate of completion by the Department of Works & Highways to confirm the engagement of the contractor and the service rendered to Manus Provincial Works Office.

The Ombudsman Commission confirms through its investigation that the purported payment of K4.56 million had not been paid to the Contractor as yet until proper documentation on the justification of the claim is presented to the Arrears Verification Committee (AVC) and that the State is fully satisfied that the claim is worth processing.

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