$5.8M wasted on WB school

| 09/07/2012

beulah smith.JPG(CNS): As a result of poor management procedures the government spent six million dollars on what is now an empty lot (left) when it was forced to stop the Beulah Smith High School project in West Bay, the auditor general said in his latest report. Alastair Swarbrick said the ministry gave the order for the contractor to begin work before a contract was signed but had to stop the work two months later. “The Ministry did not protect the interests of the government by ensuring that there was a signed contract in place that would deal with unusual circumstances, such as the order to stop work," he said in his report on his latest assessment of the way government manages major capital projects.

Among the many other problems relating to the school projects Swarbrick also revealed that the school project designs were never formally approved by Cabinet. In yet another damning report over the way the government manages and spends public money, the country’s auditor said the public purse had to shell out $1,397,000, as part of a negotiated settlement to the contractor for the work that was completed before the stop work order was issued.

Using the Government Office Accommodation Project (GOAP) and the three high school projects as case studies to illustrate the myriad problems in government’s management of major projects, Swarbrick pointed out the consequences of the failure of government to have proper processes in place.

“The importance of a Government-wide strategic framework for ensuring that the capital projects align with the government’s strategic objectives and policy priorities and for determining whether they are affordable is demonstrated by the expenditure incurred on the Beulah Smith High School project,” Swarbrick states in the report. “In this instance, the ministry incurred costs $5.9 million before Cabinet decided that the project would not be completed. In the end, value-for-money was not achieved as significant monies were expended for what is now a vacant lot.”

Among the many issues surrounding the high school projects Swarbrick points to the failure to make a proper business case for the schools at the outset, which resulted in multiple changes to the projects and the increasing costs. He said the cost estimate provided in 2005 did not reflect the complete strategy ultimately pursued by the minister of education that changed the design to include a new education delivery philosophy, community and sporting facilities, and hurricane shelters.

“This significant change for the business needs for the school projects would have had a significant impact on the cost of the project and the timeline for their construction. Despite this change, there was no attempt to develop a robust business case at that time,” Swarbrick stated.

The Central Tenders Committee accepted the contractors bid for the Beulah Smith High School in August 2008 but the ministry provided authority for the work to start before a contract was signed. It then had to stop work on that school in December 2008 as a result of the downturn in the economy and government’s falling revenue.

Although Swarbrick states that all steps in the open tender process were followed and the assessment criteria used were supportive of the overall procurement strategy, the evaluation committee did not include government staff with construction project management expertise.

“Where the Ministry had limited expertise in construction project management, the inclusion of such experts could have helped support good decision making during this stage of procurement.”

One issue he said was that there was a significant price differences between the estimate provided by the quantity surveyor and the bid price. Although the lowest bids were accepted, Swarbrick said government never investigated the reason why there was such a major difference in the cost estimates.

However, he points to the decision to allow work to start without an approved contract as a major problem that should not happen again.

Swarbrick also revealed that during his limited assessment of the school projects he found that Cabinet was never presented with nor did they approve the final project designs leading to the tendering process.

“Without Cabinet involvement, we believe there was insufficient oversight and controls to deter abuse of process,” Swarbrick stated.

See full report below.

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Comments (38)

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  1. Anonymous says:

    And you're surprised??

  2. Anonymous says:

    Government does not bother with proper project management. Why it does not would be very interesting.

  3. Anonymous says:

    Alden you should have listened to Arden and Chuckie's advice. Your head too hard BoBo !!! Now you gone into hiding again. No sah !!!

  4. Anonymous says:

    Cayman needs to start printing million dollar bills!

  5. Anonymous says:

    That $6 million could have easily built a good school. Instead of Alden wasting our money because he wants to create a legacy. Dart’s school cost $10 mil and is the best school on the island. PPM or UDP we’re going to be in debt as long as we have these clowns running Cayman.

  6. been there done that says:

    Alden should never be allowed to become Premier in this country,he has no financial business sense.If people are really honest with themselves they can see the many blunders that he personally did while in power.1.Sayid,2.schools.3.the constitution,4.roads,they were cutting non skidding lines at the roundabout near lantern point two days before election,and those roundabouts are still dangerous,people got killed.

    • Anonymous says:

      Roundabouts are not dangerous. People and their pathetic driving skills are the reason for the accidents.
      Get some laws passed concerning tire tread, you may be surprised how many accidents will be prevented.

    • Anonymous says:

      Alden could not possibly be worse than McKeeva. Even if they were true all that you have mentioned pales into insignificance compared to the devastation that McKeeva is wreaking on this country. 

      Please explain how Alden is "personally" responsible for Sayed and for how the roads were built. Sayed was hired under the previous UDP government. His credentials should have been checked out by his predecessor as President of UCCI. Any advances should have been approved by the UCCI Board or at least its chairman. What is the personal connection with Alden? 

      The roads were not under his ministry and in any event he is not a roads engineer.

      Don't bother with political smears, just give us the facts.

       

  7. Just Sayin' says:

    They could have resold the fill and made back a good chunk of that if it hadn’t all been stolen by…..oh nevermind.

  8. Anonymous says:

    Another reason to vote YES on July 18th and vote for anyone else other than a PPM or UDP party member in 2013.  Thank you Mr. Swarbrick!  We soooo badly needed someone like you when the UDP booted Day Duguay out and we thought all hope was lost.  Thank you for following in his footsteps and keeping us up to date on things we otherwise would have no clue was going on.  Can you please make sure the votes get counted properly on July 18th too!  We know all too well what could happen there!

  9. Thunder Storm says:

    Well time has proven exactly what I thought!!

     

    All you PPM members that boast about your 'qualifications and experience" is far worse that me without a qualification.

     

    Qualification (pure theory) and no common sense is far worse and detrimental thatn someone with years of great practical experience and knowledge – obviously you dont fit into this category.

     

    The WORSE of it all is that the 2008 Education Minister is also a Lawyer so tell me something, where is your knowledge on CONTRACT LAW???

     

    Here's one case the evidence has proven that you lack the knowledge of law, accounting, cost quantitative procedures, cost management, financial management, – geesh the whole nine yards…….and come think of it, the bunch of unni proud pompous men (PPM) believe unni can do a better job than most of us. 

     

    Well kiss mi grannie!!!

     

     

    • Anonymous says:

      Er, the current Minister of Education is an accountant, not a lawyer.

      It’s well known that lawyers are not usually good at math. I’m not sure what excuse Rollie has for what has happened on his watch.

    • Anonymous says:

      People often make the mistake of assuming that because a person lacks education it must mean they must have been endowed with common sense or 'granny wits'. The current premier proves that you can be uneducated and also have no common sense.  

  10. noname says:

    PPM the finger is pointed at you, we can not elect you morons all over again to destroy the public purse  no way!

  11. Anon says:

    Does anyone is Cayman have a head to run this country properly? We seem to have fallen back to the lawless times in our history.

    Thank God for the Auditor General, he seems to be the only one doing his job. 

     

  12. Jacky Boatside from Oldbush says:

    This money has not been wasted infact every dime has been spent in Las Vegas Nevada at the tables by those who got it and has been used to promote Caymanians to "Whale Status" in Sin City that must count for sum ting!

  13. Anonymous says:

    I hear the UK knocking on the door i guess it time to let them in. Another example of a disfunctional government.

  14. Anonymous says:

    Just for the record this report is referring to the PPM Administration. That was who wasted the money.

  15. Anonymous says:

    WHATEVER!!!

     

    The need for good schools to educate your children to get the jobs that Caymanians are always braying for should be TOP priority!  Right up there with that is the need for good educators and a curriculum that is valid for this era. And NOT religion based! Leave that to the churches that have all of our 'Nation Building' money.

    Quit trying to leave that responsibility up to the banks, accounting firms and law firms. You expect your kids to break through a glass ceilng starting in the mail room!

    • Anonymous says:

      Actualy, you need good teachers. This is particularly true given the lack of education levels / history of Cayman. For instance, you cannot compare ICCI to Cambridge. The money should be used to hire the best teachers and place everyone in a modest building. Not good enough?

  16. Anonymous says:

    so who's going to be sacked are held responsible???

  17. Anonymous says:

    And this is the former minister for education who now wishes to be premier. Lord help us.

  18. Anonymous says:

    Having read the complete AG report, I believe that he may have missed an important point regarding Beulah Smith High School.

    What he said is that the contract should not have been allowed to proceed at all without a contract being signed. Which I wholeheartedly agree with.

    However, if a contract had been signed before work started, in the same form as those signed for the other two schools, and then worked had to be stopped due to budget constraints, the Ministry would have been on the hook for the Contractor’s overhead and profit on the unexecuted Works, i.e. the overhead and profit on nearly the whole contract value, a sum of around $ 8 – 10M (this is a WAG, I don’t happen to know how much it was as a matter of fact).

    The point is that the Ministry therefore, by accident and/or incompetence, dodged a big bullet in Beulah Smith’s case, by not following procedure and not signing a contract.

    • Yep... says:

      You can "thumbs down" this comment all you like – but the fact remains, under a standard AIA contract which the government normally use on capital projects, this chap is correct!

    • Anonymous says:

      It seems he was learning from the prewious gowerment.

  19. Truth Hurts says:

    At least one Government department is providing value for money – the office of the Auditor General!

  20. Anonymous says:

    CI currency needs to be changed to marshmallows, much less costly when thrown away. There would have to be room however in the introduction costs to include the finance ministers signature emblazoned on them so we couldn't get forgerys from the grocery stores. . . Imagine that Mac, could then be credited going down in history as the Honouable Marshmallow Minister

  21. Anonymous says:

    Get rid of the UDP morons Cayman.

  22. Dishonourable MacShambles says:

    No problem. I will just raise taxes (ahem “fees”).

  23. Anonymous says:

    There is a clear need for much more effective controls on the way all politicians spend government money. Wasteful and inappropriate behaviour is not limited to the membership of any party. We have gone far past the days when the vestrymen made operational decisions but our government structures have clearly not caught up with present needs.

  24. Truth says:

    Caymankind strikes again.  And again.  And again.  Hire Caymanian?  Only if its Caymanian money being spent(lost).  Again.