CMU ‘variation cost’ bombshell

Auditor General Pamela Monroe Ellis divulged a shocker yesterday during a meeting of Parliament’s Public Accounts Committee (PAC) when she revealed that the Caribbean Maritime University (CMU) submitted to the education ministry variation costs in the sum of $59 million for doors, windows and stiffeners as part of design-and-build contracts at nine schools across the country.

“…That is why it was a concern to us, because we believe that these were items that should have been properly included in the bill of quantity. It still raises a concern that it is being referred to as contingency,” said Monroe Ellis.

The disclosure raised eyebrows during the committee meeting, with PAC Chairman Mark Golding questioning why basic items such as windows and doors were not included in the original contract sum.

“It all sounds irregular,” he quipped.

Acting permanent secretary in the Ministry of Education, Youth and Information, Dr Grace McLean, sought to clarify the issue, claiming that there was only an $11-million variation cost on a CMU contract at Armadale in Alexandria, St Ann.

The acting permanent secretary said that contingency sums were built into the contracts to “take care of unforeseen circumstances”.

However, Monroe Ellis argued that the $59 million was “honoured and absorbed as contingency. So the ministry decided to classify it as contingency rather than variation”.

She contended that the variation costs had not “evaporated. It still exists. It’s just how it has been split and classified.”

However, McLean again insisted that most of the proposed works that would constitute the variation costs had not been approved by the ministry and, as such, had not been carried out.

The committee was reviewing a $218-million contract with a litany of breaches highlighted by the auditor general in her July 2019 report. Monroe Ellis had said in her report that the total contract sum was expected to increase, with variation costs, to $277 million – a 27 per cent spike.

Under the CMU-implemented contracts, no applications were submitted to the various municipalities for approval of the works carried out at the nine schools. The education ministry and the CMU also failed to get the nod from state agencies such as the Jamaica Fire Brigade, Ministry of Health and Wellness, and the National Environment and Planning Agency.

Schools under the education ministry contracts with the CMU

Inswood High

Dias Infant Centre

Alexander College

Bryce Primary

Nain Highw

New Forest Primary and Junior High

Aberdeen Primary

Brown’s Town High

Westwood High