August 28, 2019
By Jariatu S. Bangura
Auditor at the Audit Service Sierra Leone, Samuel L.C. Jarrett, has told the Justice Bankole Thompson Commission of Inquiry that their record shows that the Ministry of Water Resources had overpriced the 14 water bowsers they bought.
He said at the time of audit, they realised that the same specifications of bowsers were bought by Guma Valley Water Company for a much lower price than the one stated by the Ministry of Water Resources, which prompted them to launch an investigation into the project.
He said at the end of the auditing process, they recommended for PCS Holdings Company to refund the amount of Le769, 172, 992 to the Consolidated Revenue Fund.
“The cost per bowser was $310,000 and the 14 bowsers cost $4,340,000. The Pro forma invoice from NRA indicates payment totaling an amount of $651,000 as GST. It is now clear that the GST cost is not inclusive of the sum total of the 14 bowsers as the total contract price in the agreement was $4,991,000 inclusive of GST payment,” he explained.
He stated that the issue raised by the audit team on overpricing was as a result of the unit cost excluding GST.
He agreed that there was a lot of duty waivers during the Ebola crises, but that there was no document to ascertain that duty waivers were given to PCS Holdings Company.
During cross examination by Ady Macauley, the witness admitted that he was part of the audit team that audited the Ministry of Water Resources and that Le14.9 billion was the excess they discovered.
He said Le769, 172, 992 was part of the total variance but could not ascertain as to whether the said amount is a price stated by the manufacturer (Alibaba.com).
“I do know Alibab.com, and I know him to be a foreign based Company while PCS Holdings is a local Company. I know that GST has to be factored into the procurement of the bowsers, but the GST varies depending on the value of the goods. There is no paragraph in the signed contract which states for PCS Holdings to buy from Alibab.com,” he said, thus agreeing that the audit protocol indicates the checklist for tax compliance.
He further stated that the specifications stated in the signed contract does not march any of the company, with the exception of Alibaba which price tag was $83,137,000 excluding GST.
He said the price does not include profit margin either and he accepted that at the time of purchase, it was an emergency period.