Delays in contract negotiation led to a situation during the government’s 2015/16 budget year where some Department of Tourism contracts were not signed until months after they took effect, according to an internal audit.
The problem was not widespread, but the Internal Audit Service noted in a March 2017 report that three tourism department contracts “were signed at least two months after the provision of agreed services” had begun.
Two of the contracts involved “musician fees,” one for an agreement that began June 30, 2015, that was not signed until September 2015, and another that began Jan. 1, 2016, and went unsigned until March 24, 2016.
A third contract for public relations services was not signed until Oct. 29, 2015, after it started on Sept. 1, 2015.
“When we queried this, we were informed that there were significant delays in the contract negotiation process, including reaching agreement on deliverables [the services provided],” the report stated.
Auditors generally warned the department against proceeding with services rendered for unsigned contracts for a number of reasons, chiefly that legal disputes could arise and that those contracts could become unenforceable in the event of a dispute.
The department agreed with the findings on the musicians’ contracts and said it recognized that “contracts should reflect the dates the services were in effect.” It said the public relations services contract was originally bid on June 2, 2015 – but that only one bid was received and the contract had to be retendered, which resulted in a delay.
The review also discovered one case where a two-year contract was entered into before the completion of a vendor selection process. This contract was effective July 1, 2015, but the vendor selection document was not finalized until about two weeks later.
“We were assured that the services were tendered in accordance with the procurement process,” the audit found. Department officials said the contract was not entered into prior to the end of the vendor selection process, but that there were delays in receiving final approval from the ministry chief officer, which was received on July 13, 2015.
There was a separate issue identified where purchase orders for goods or services were made before the department had officially completed its vendor selection process.
Some of the purchases were for things like staff uniforms, printing costs, computers and “sea turtle stress relievers,” according to government records. The $4,200 purchase for the turtle “stress relievers” raised some concern with auditors.
“It was observed that the quote from [one company bidding for the contract] was provided in January 2016, while quotes for competing vendors were only received in March and April 2016,” auditors stated.
“When we queried this finding, it was explained that the process of obtaining quotes for the above transactions had already been carried out and that the responsible staff member had moved forward with the purchase prior to completion of the approval for quotes form,” the report added.
These audit findings put the tourism department “at risk” of losing money on the purchase order transactions, auditors said.