A 2016 internal audit into a former senior manager at the Water and Sewerage Authority (WASA) has unearthed numerous incidents of misconduct which directly resulted in the water company haemorrhaging millions in salaries and overtime.
Intent on securing some redress for the past wrongs, Public Utilities Minister Marvin Gonzales said the findings contained in the 74-page report which was presented to then acting CEO Alan Poon King; Corporate Secretary Dion Abdool; and Head, Legal Services Paula Maria Fortune – will now be passed to the TTPS for investigation and prosecution.
The report is also expected to be handed to Prime Minister Dr Keith Rowley and WASA’s Executive Director Dr Lennox Sealy.
The audit report, which was obtained by Guardian Media, was led by acting manager of Operational Audit, Leah Guevara and Sonya Wright, acting Audit Officer II.
A total of seven allegations of misconduct were levelled against the former manager.
Among them was an allegation that the former manager failed to follow and/or establish practices for the recruitment and re-hiring of personnel, “at a significant financial cost and burden on the authority, and/or the engagement of daily paid workers in 2014 and 2015 without requisite credentials.”
Another allegation was that during the same period, the former manager acted in breach of WASA’s mandate to reduce staff pursuant to a Voluntary Separation Package (VSEP) loan agreement with the Inter-American Development Bank (IDB), and that he also misled the management, board and ministry with respect to manpower levels within the authority.
Regarding this allegation, the report found that certain employee files did not contain key documents such as updated employment contracts, police certificates of good character, a WASA application form, any form of national identification, an assumption of duty form, a letter of appointment, or a human resources recruitment check list.
Yet another allegation claimed there was also a lack of transparency in the selection criteria of staff in some areas, as 342 people who did not possess the necessary qualifications, knowledge, skills or experience had been appointed in an interim arrangement within the Operations Division.
These appointments saw the overall salary costs of the Operations Division increase from $130,168,706.82 to $157,824,269.28.
The audit was undertaken by the People’s National Movement government following a 2012 report compiled by WASA, which showed that in an attempt to get funding from the IDB – one conditionality was that the authority undertook an urgent staff rationalisation exercise which was completed by the People’s Partnership (PP) during their tenure.
At the time, WASA was tasked to get 2,500 of its 5,000 employees out of the organisation.
Of this figure, –1,000 employees accepted VSEP which cost taxpayers $360 million.
By 2015, however, WASA’s workforce had ballooned to its original figure of 5,000, which triggered WASA to undertake the audit to find out what had led to the rehiring process.
1,474 new hires
A review of the Human Resource Information System (HRIS) in the audit showed that “a total of 1,474 new hires” were made by WASA during 2014/2015 by the senior manager.
This comprised 367 monthly paid workers with 1,107 being daily paid, of which 640 were said to be local labourers.
From March 2012, the variance in manpower levels jumped from 428 to 1,763 by September 2015.
The audit found that the manager failed to report “the actual number of new recruits and also misrepresented the manpower levels in his reports to the Board of Commissioners and Human Resources Committee by repeatedly understating the figures below the actual number.”
Manager reported inaccurate manpower levels to the Board.
The audit found that in 2015, the manager “knowingly reported inaccurate manpower levels in the VSEP 2012/2014 closure report.”
He reported, “that the authority’s pre-VSEP staffing level of 4,386 declined by 961 employees as a result of persons utilising VESP, inferring total manpower levels at the end of August 2014 to be 3,425. This did not reflect the actual manpower levels on the HRIS database of 4,644.”
“These staff levels continued to increase over time to 4,711 in January 2015, the date the VSEP closure report was presented and to 5,114 by the time he proceeded on administrative leave in November 2015.”
It also revealed there was no approved documented guidance established and utilised for the hire of local labour.
In spite of the authority’s effort to reduce staff via the VSEP, the manager “signed and approved requisitions for the hire of at least 137 out of 640 local labourers hired in 2014/2015.”
Workers without ID cards recruited
A review of 13 local labour files showed that “five persons were recruited, although they only possessed ID cards.”
This is contrary to WASA’s Recruitment and Selection Policy-Section 7.7 which requires a candidate to present seven forms of documents ranging from- birth certificate, national IDs, two testimonials, academic certificates, NIS and BIR numbers, certificate of good character and driver’s permit if needed.
A review of the HRIS database also indicated that 455 of the 640 local labourers were hired in 2015, with 185 in 2014.
“Total staff costs including overtime and retroactive payments for the (2011 to 2013 agreements) for these additional employees from the date of hire to July 2016, amounted to $64,317,592.34.”
Salaries increased by $27 million following the VSEP exercise
The audit stated that the “tactics employed” by the manager “in crafting an arrangement pending the approval of the proposed operations structure created loopholes that resulted in an arbitrary upgrade of staff and increased salary cost in sums exceeding $27,655,562.47 during the last two years. If continued, this has the potential to incur an additional monthly financial burden of $1,379, 281.85 which can no longer be sustained,” the audit stated.
This led to an increased financial burden on WASA.
Following the findings, the audit recommended disciplinary action be considered against the senior manager for non-compliance with organisational policies/guidelines.
The manager was also found to be in breach of the authority’s mandate to reduce staff based on the IDB loan agreement.
The audit also discovered the manager “authorised excessive and additional commuted overtime (COT) hours to specific employees on the special interim arrangement, where up to 60 hours in excess of the staff members’ entitlement was approved, resulting in an increase in monthly staff costs of approximately $153,624.57 commencing from January 2013 to varying dates in 2016.”
Excessive overtime paid to unions officials
The audit also discovered the manager also retroactively approved the payments of additional COT hours and special project allowances to six members of the Public Services Association (PSA) WASA section between January 1, 2013, to December 31, 2015.
“These allowances are in excess of those provided to employees of similar ranges and job description and has resulted in an increased monthly financial commitment to the Authority of $31,135.61,” the audit stated.
From January 2013 to December 2015, the excess allowance totalled $947,307.03
Furthermore, this allowance continued beyond December 2015 to July 2016, totalling $195,302.12.
Additionally, the manager also authorised the payment of overtime forgone by the union officials of the National Union of Government Federated Workers (NUGFW) WASA section from January 2011 to December 2014, without seeking approval from the Board and Human Resource Committee.
These payments amounted to $726,718.
The audit stated that there was no documentation to support that the manager had performed due diligence checks to ensure the accuracy and legitimacy of the requested amount to be remitted to these officials.
It further revealed the manager authorised payments of overtime foregone and institutional strengthening allowances to executive members of the NUGFW WASA Section totalling $1,426,718 without seeking approvals from the CEO, Board and Human Resource Committee.
The manager was also alleged to have used his office to approve the allocation of a leased motor care vehicle in addition to the receipt of travelling allowances to three other managers.
In addition, the audit stated that the current operating staff (numbers and costs) of the entire Operations Division needs to be reviewed and a determination of action to be taken against the relevant management where approved processes have not been followed and/or irregularities are identified.
No adherence to tender process
The manager was also accused of not adhering to the authority’s procurement and tendering process in selecting a group life plan with an insurance firm in 2015.
“Documentation received from the Finance Division has revealed that $2,495,923.84 and $1,123,888.58 has been emitted to the insurance firm (named called) for the period June 2015 to July 2016 which represents employer and employee’s contributions respectively,” the audit stated.
The overall conclusion by the internal audit was with the exception of granting approval for the receipt of both travelling allowances and leased motor vehicles by members of staff, “the evidence provided sufficiently supports the allegations presented against” the manager.