SHAL­IZA HAS­SANALI

shal­iza.has­sanali@guardian.co.tt

A 2009 in­ter­nal in­ves­ti­ga­tion by ac­count­ing firm Ernst and Young (EY) in­to a sup­ply of truck borne wa­ter to cus­tomers of the Wa­ter and Sew­er­age Au­thor­i­ty (WASA) by eight con­trac­tors un­earthed a web of cor­rup­tion rang­ing from in­voice padding, fal­si­fy­ing of doc­u­ments, unau­tho­rised dis­tri­b­u­tion of wa­ter, ex­trac­tion of monies and gifts from cus­tomers and pro­cure­ment fraud.

In jan­u­ary 2009, WASA’s chief cor­po­rate of­fi­cer Dion Ab­dool hired EY to in­ves­ti­gate al­le­ga­tions of im­pro­pri­eties in the con­tract­ing and dis­tri­b­u­tion process of eight con­trac­tors whose com­pa­nies were named in the re­port. Sev­en of the con­trac­tors are based in south Trinidad while one is lo­cat­ed in the north.

Guardian Me­dia was re­li­ably in­formed that EY’s find­ings led to the sus­pen­sion of six em­ploy­ees who had worked in col­lu­sion with the cor­rupt con­trac­tors. How­ev­er, in 2010 the sus­pend­ed work­ers re­turned to work at WASA and the re­port was hid­den for 12 years.

It resur­faced re­cent­ly and was brought to the at­ten­tion of Pub­lic Util­i­ties Min­is­ter Mar­vin Gon­za­les who ex­pressed dis­gust at WASA’s de­ci­sion to re­in­state work­ers who had been ac­cused of wrong­do­ing.

The de­ci­sion to re­in­state the man­agers fol­lowed ne­go­ti­a­tions be­tween WASA’s man­age­ment and one of the unions rep­re­sent­ing its em­ploy­ees.

Ac­cord­ing to the 46-page EY re­port, the “al­le­ga­tions and pos­si­ble fraud” came out of in­ter­views with key em­ploy­ees in­volved in the process as well as a re­view of dis­burse­ment records. It iden­ti­fied that “wa­ter was be­ing de­lib­er­ate­ly shut off by WASA per­son­nel to cre­ate work for con­trac­tors and to vic­timise re­gions pop­u­lat­ed by sup­port­ers of the op­po­si­tion par­ty.”

The de­tailed re­port al­so re­vealed:

•WASA was be­ing billed for fic­ti­tious wa­ter truck­ing trips as a re­sult of col­lu­sion be­tween con­trac­tors and WASA em­ploy­ees.

•Con­trac­tors and WASA em­ploy­ees ex­tract­ed monies and gifts from cus­tomers for wa­ter when it was de­liv­ered.

•Oth­er ve­hi­cles, whether or not they were con­tract­ed to the util­i­ty, were ob­tain­ing wa­ter from WASA for sale.

•Ten­der­ing and eval­u­a­tion process­es were ma­nip­u­lat­ed to favour cer­tain con­trac­tors.

Over the pe­ri­od cov­ered in the re­port, WASA sold wa­ter to con­trac­tors at a rate of $20 for 1200 gal­lons. Pur­chasers were re­quired to present a WASA au­tho­ri­sa­tion at the des­ig­nat­ed fill­ing sta­tions where the dis­patch­er on site would car­ry out and record the de­liv­ery of the wa­ter to the pur­chas­er. Each con­trac­tor billed WASA for the de­liv­ery of wa­ter based on the dis­tance and lo­ca­tion.

Field work, in­ter­views of WASA em­ploy­ees, ex­am­i­na­tion of doc­u­ments and ob­ser­va­tion ex­er­cis­es were done by EY in north and south re­gions in Feb­ru­ary 2009. Dur­ing vis­its to fill­ing bays, EY record­ed 89 trips com­pared to WASA’s record of 174 trips re­flect­ed in its wa­ter truck­ing doc­u­men­ta­tion.

The EY re­port stat­ed: “Ex­pla­na­tion pro­vid­ed to us for this dis­crep­an­cy were that al­ter­na­tive hy­drants are be­ing used, there­fore trucks would not have re­turned to the of­fi­cial fill­ing sta­tion. No dis­patch­ers are on-site at these al­ter­na­tive hy­drants. How­ev­er, wa­ter truck­ing doc­u­men­ta­tion re­flect­ed that the con­tract­ed fill­ing sta­tions were utilised in the de­liv­ery process. No one can state con­clu­sive­ly that the trips for which WASA is be­ing billed were ac­tu­al­ly in­curred.”

EY al­so point­ed out that the trucks left the fill­ing bays with­out dis­trib­u­tors who were sup­posed to val­i­date that wa­ter was be­ing de­liv­ered to the au­tho­rised lo­ca­tions.

In the south­ern re­gion, EY un­earthed six un­ac­count­ed trucks fill­ing up at fill­ing sta­tions.

“Al­ter­na­tive hy­drants and the of­fi­cial hy­drants are not se­cured at the end of the day. Most dis­patch­ers leave by 4 pm, cre­at­ing a free for all sit­u­a­tion,” the re­port stat­ed.

EY not­ed a “fla­grant dis­re­gard for con­trols in the process, the in­ef­fec­tive over­sight at all tiers in the process (dis­patch­er, wa­ter truck­ing co­or­di­na­tor, su­per­vi­sor and South Re­gion­al man­ag­er) and the num­ber of in­con­sis­ten­cies and vi­o­la­tions that have been not­ed, it is high­ly prob­a­ble that the fol­low­ing are tak­ing place”:

•In­voice padding

•Fal­si­fy­ing of doc­u­ments

•Unau­tho­rised dis­tri­b­u­tion of wa­ter

•A net­work of mo­ti­vat­ed in­di­vid­u­als in col­lu­sion to al­low this sub-stan­dard process to be in ef­fect.

Doc­u­ments ex­am­ined by the ac­count­ing firm showed sev­er­al ir­reg­u­lar­i­ties in wa­ter truck­ing doc­u­men­ta­tion in­clud­ing mon­i­tor­ing sheets, de­liv­ery sheets and cartage re­ceipts, as well as breach­es of sig­nif­i­cant con­trols with­in the process. Tele­phone num­bers were not reg­is­tered at the ad­dress­es they were record­ed against, EY found.

“In­com­plete doc­u­men­ta­tion was ap­proved by the wa­ter truck­ing su­per­vi­sor, blank WASA cartage re­ceipts were signed by both the dis­trib­u­tors and con­trac­tors’ dri­vers.

“Dis­patch­ers and area su­per­vi­sors were sign­ing the cartage re­ceipts in place of the dis­trib­u­tor to cer­ti­fy the trips record­ed, wa­ter truck­ing doc­u­men­ta­tion was be­ing al­tered with­out any ini­tial from the in­di­vid­ual mak­ing the change,” the re­port re­vealed.

In ad­di­tion, in­for­ma­tion record­ed on mon­i­tor­ing sheets did not seem rea­son­able.

EY re­port­ed see­ing “a time of 20 min­utes to de­liv­er to three places, which were them­selves 30 min­utes apart.” Al­so, sev­er­al time in­con­sis­ten­cies were not­ed in the da­ta record­ed be­tween the mon­i­tor­ing sheets and cartage re­ceipts.

“WASA per­son­nel sig­na­tures ap­peared to be forged as we ob­served many cas­es where WASA per­son­nel sig­na­tures on the doc­u­men­ta­tion were vis­i­bly dif­fer­ent. In sev­er­al in­stances, the in­for­ma­tion record­ed for re­ceipts of wa­ter by cus­tomers ap­peared to be fic­ti­tious or in­ac­cu­rate as in­di­vid­u­als with the same name and ad­dress­es signed dif­fer­ent­ly on sep­a­rate oc­ca­sions,” EY said.

As a re­sult of the na­ture of the find­ings, EY said “it is high­ly prob­a­ble that the in­for­ma­tion record­ed can be de­lib­er­ate­ly fal­si­fied with the in­ten­tion to ma­nip­u­late the process and pad in­voic­es.”

The firm al­so found that valves and hy­drants were left open to al­low fill­ing of wa­ter to take place.

“There is col­lu­sion of per­son to per­pe­trate al­leged fraud­u­lent in­voic­ing,” the re­port said.

In south Trinidad, fal­si­fy­ing of trip logs was found to be preva­lent. Fol­low­ing weeks of ob­ser­va­tion, EY re­port­ed that one con­trac­tor had an arrange­ment with WASA to in­de­pen­dent­ly—with­out the pres­ence of any WASA per­son­nel—de­liv­er wa­ter to com­mu­nal tanks and pri­vate in­di­vid­u­als. Oth­er ve­hi­cles con­tract­ed to WASA had been get­ting wa­ter from the util­i­ty for sub­se­quent sale.

The re­port al­so raised con­cerns about the “award of wa­ter truck­ing con­tracts (WTC 18/2006)” which were not trans­par­ent and al­lowed for sub­jec­tiv­i­ty in the de­ci­sion-mak­ing process. EY found that “spe­cif­ic tank ca­pac­i­ty is not stat­ed in the ten­der­ing pack­age yet awards are based on dif­fer­ent gal­lon re­quire­ments.”

Two con­trac­tors (names iden­ti­fied) were award­ed con­tracts to sup­ply 27 of the 45 trucks for the south­ern re­gion.

“These con­trac­tors did not present any 1200 gal­lon tanks/trucks for in­spec­tion and, as such, were award­ed 1600 and 2400 gal­lon. All oth­er con­trac­tors were award­ed con­tracts for 1200 gal­lons. We do not know what WASA’s needs are (up­front) and there­fore if the eval­u­a­tion process was car­ried out with the req­ui­site lev­el of ob­jec­tiv­i­ty,” EY stat­ed.

The two con­trac­tors sub­mit­ted bids rang­ing from $124, $140, $142 and $150 for the de­liv­ery of 1600 gal­lons of wa­ter in the San Fer­nan­do/Na­pari­ma, Pe­nal and Cou­va ar­eas. Oth­er con­trac­tors sub­mit­ted bids be­tween $168 to $199.

How­ev­er, fol­low­ing their in­ves­ti­ga­tions, EY dis­cov­ered that “both con­trac­tors are close­ly re­lat­ed, as they shared the same ad­dress, have at least one com­mon di­rec­tor, sub­mit­ted bids close to each oth­er and were col­lec­tive­ly able to win 27 of 45 trucks award­ed con­tracts.” The price sub­mit­ted by these two con­trac­tors were much low­er than oth­er con­trac­tors in ar­eas where al­ter­na­tive hy­drants were be­ing used.

“These two in­stances are tan­ta­mount to con­tract and pro­cure­ment fraud,” the re­port stat­ed.

EY al­so found that one con­trac­tor had sub­mit­ted 97 de­liv­ery notes for a to­tal of 543 trips be­tween May 1 and June 5, 2009. How­ev­er, WASA’s de­liv­ery sheets on­ly ac­count­ed for 14 per cent of those trips.

There were in­di­ca­tions that sev­er­al al­ter­na­tive fill­ing bays were not used.

“This was not de­clared in the ten­der pack­age. This in­for­ma­tion (which is not dis­trib­uted to ten­der­ers) will af­fect the prices that con­trac­tors sub­mit. This is be­cause the costs in­curred in short­er trips are less, and al­so short­er dis­tances can ac­com­mo­date more trips (ce­teris paribus) there­by gen­er­at­ing more rev­enue, cre­at­ing a more ad­van­ta­geous pric­ing struc­ture,” the re­port not­ed

EY said WASA’s process for de­liv­ery of truck borne wa­ter was long­wind­ed and in­ef­fi­cient which al­lowed for easy ma­nip­u­la­tion by mo­ti­vat­ed in­di­vid­u­als.

“Ac­count­abil­i­ty in the process is al­most non-ex­is­tent and this is ex­ac­er­bat­ed by the bulk­i­ness of the process de­sign. Giv­en the fact that cor­re­la­tion of the wa­ter truck­ing in­for­ma­tion is cen­tred around one key in­di­vid­ual (the dis­patch­er) and there is very lit­tle mon­i­tor­ing at the su­per­vi­so­ry lev­el, it is dif­fi­cult to place much em­pha­sis on the doc­u­men­ta­tion be­ing pro­duced,” the re­port stat­ed.

EY de­scribed the prac­tice of WASA’s truck­ing su­per­vi­sor call­ing the con­trac­tor to con­firm the num­ber of trips made a month as ab­surd.

“This em­pha­sis­es that WASA’s in­ter­nal process is un­re­li­able and cre­ates the op­por­tu­ni­ty for the con­trac­tor to mis­rep­re­sent the work car­ried out,” the com­pa­ny said.

The re­port found that op­er­a­tions in the north­ern re­gion al­lowed one con­trac­tor to op­er­ate au­tonomous­ly.

In sum­ma­ry, EY high­light­ed many ir­reg­u­lar­i­ties fu­elled by poor mon­i­tor­ing and over­sight at the su­per­vi­so­ry lev­el and a lack of doc­u­ment­ed poli­cies and pro­ce­dures to dri­ve the process.

“The in­abil­i­ty of em­pow­ered in­di­vid­u­als in­volved in the process, to ques­tion the es­tab­lished norm and lack of mon­i­tor­ing and prop­er over­sight has lead to a break­down in con­trols with­in the sys­tem. This has re­sult­ed in the sub­mis­sion of in­com­plete doc­u­men­ta­tion, in­cor­rect doc­u­men­ta­tion and mis­place­ment of key doc­u­men­ta­tion which af­fect­ed the com­plete­ness of our re­view.”

EY al­so stat­ed that wa­ter truck­ing op­er­a­tions in the north­ern re­gion were dif­fer­ent from the south­ern op­er­a­tions,

Among the ac­count­ing firm’s rec­om­men­da­tion was that de­liv­ery of truck borne wa­ter to cus­tomers be gov­erned by es­tab­lished poli­cies and pro­ce­dures, WASA es­tab­lish a wa­ter truck­ing di­vi­sion pri­mar­i­ly re­spon­si­ble for wa­ter de­liv­ery and the se­lec­tion and mon­i­tor­ing of con­tract­ed wa­ter truck­ers, that GPS track­ers in­stalled on wa­ter tankers and hand­held de­vices be used to log de­liv­er­ies to cus­tomers.