The Auditor General's Office has recommended that a detailed investigation should be conducted on how the Ministry of Trade and Industry awarded a consultancy contract of $500,000 for the restructure of Rewa Cooperative Dairy Company to Aliz Pacific.
It has been highlighted in the Auditor General's Report for 2010 that the contract was given without going through an open public tender process.
According to the Auditor General a tender must be called for the procurement of goods, services or works valued at $30,001 and more.
The report states that in a meeting held on 27th April 2010, cabinet approved the restructure of Rewa Dairy and that a sum of $500,000 be sourced from the National Export Strategy budget held with the Ministry of Trade and Industry for restructure.
Following the cabinet decision, the ministry on the 9th of July 2010, signed a Memorandum of Agreement with Aliz Pacific Chartered Accountants and Business Advisors to implement the restructure of Rewa Dairy.
The Auditor General noted that the project for the restructuring of Rewa Dairy involved a substantial sum of public funds and was not put out for public tender.
The audit report also states that from initial discussions with the officials of the Ministry, the audit team was informed that Rewa Dairy facilitated the tender process.
Upon enquiry with the company, the Auditor General's Office noted that they did not call or facilitate any tender.
However the report said Rewa Dairy did put out an Expression of Interest in February 2009 to facilitate a strategic seminar workshop, provide a draft Corporate Governance Policy and provide a draft Risk Management Policy.
Aliz Pacific was engaged for the Strategic Planning Process including facilitating a workshop for management and stakeholders at a cost of $35,450 to Rewa Dairy.
The Ministry says the proposed restructure was discussed and agreed to as the way forward followed by the cabinet decision which identified the Project Team to undertake and oversee the process. The Ministry said cabinet also identified consultants, Aliz Pacific to be part of the Project Team.
It also said that it should be noted that prior approval of the Solicitor General's Office was sought before finalizing the contract with the consultants.
The Ministry said it was guided by the cabinet decision which had already identified the consultants and as such there was no need for the tender process.
However the Office of the Auditor General says the tender awarded to Aliz Pacific in 2009 was only for the Strategic Planning Process which included facilitating a workshop for management and stakeholders. It says tenders were not called for the restructure of Rewa Dairy.
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