Faulty systems that facilitated a multi-million-dollar car rental racket are still in place at the T&T Police Service (TTPS). The systems continue unabated two years after it was detected, a senior police source has revealed. The startling joyride is just one of the unlawful practices discovered and listed in the Special Audit of the Management and Maintenance of Vehicles in the TTPS dated March 8, 2010. The audit was conducted during the period 2006 to 2008, covering 14 police stations. In the 53-page report obtained by Sunday Guardian, the audit frowned upon an abuse of the car rental system, duplicate purchasing payments, breach of the TTPS standing orders, and lack of policy and procurement practices.
Despite recommendations, checks revealed that to date no amendments have been made to the TTPS Standing Orders regarding vehicle rentals and other shortfalls. Data revealed that $86 million was allocated and pumped into the TTPS to boost the police fleet over the three-year period, to assist in the fight against crime. The TTPS fleet comprises trucks (dump and cargo), wreckers, buses, mobile stations, pick-ups, SUVs, cars, motorcycles, tractors and a pirogue. Despite the increase in the fleet, the report stated, additional resources was required to assist with covert operations. Divisional squads responsible for criminal intelligence and crime and operations have been listed as units responsible for conducting covert operations. In the execution of duty such units, the report stated, continued to rent/lease vehicles at a cost of $22.5 million over the three-year-period.
A probe into public complaints about the TTPS’ inability to respond to reports in a timely manner in spite of resources unearthed a major car rental racket. In fact, data for the period 2006/2007 revealed that the actual expenditure for the rental of vehicles exceeded the estimated budget by more than 80 per cent. Overall, 65 vehicles were rented per month during the period December 2007 to February 2009 to enable covert operations. As to how many cars were rented/leased per unit, the audit was unable to ascertain, as information was not forthcoming from the criminal intelligence unit. According to the report, the rental of vehicles was extracted from the recurrent expenditure records maintained by the Police Service Accounting Unit (PSAU).
Expenditure for the financial years 2005/2006, 2006/2007 and 2007/2008 showed that the rental costs continued to increase over the three-year-period. A breakdown of the cost on rental/leased vehicles over the three-year period is as follows:
• 2006-$5.07 million
• 2007-$8.12 million
• 2008-$8.96 million
While the audit revealed three units were responsible for maintaining the rental agreements and weekly status reports of the leasing and renting of vehicles, information was based on records maintained only by divisional squads responsible for crime and operations.
Lack of relevant documentation
In an attempt to justify the lack of transparency, other units described the rental of vehicles as a “confidential facility” used to enable covert operations. However, the far-fetched response failed to satisfy officials. The report stated: “There is a Police Service expectation that vehicles should not be kept for periods exceeding three-months, with the exception of vehicle rentals in Tobago. Despite this, we found that 16 vehicles were rented for a period of 14 continuous months.”
Stressing the need for a coherent policy to be implemented to cease such practices, the report stated: “There was no evidence that the TTPS evaluated the cost and service delivery benefits derived from leasing/renting vehicles.” Noting that the long-term agreements with as many as 20 different suppliers brought no cost benefit to the TTPS—as the rates charged were the same as the going market rate to the average citizen—the audit revealed the following information. • The Police Service did not take advantage of opportunities to negotiate a good deal that should achieve favourable rental terms.
• Evidence of inconsistent application of administrative procedures in that not all vouchers were supported by the relevant vehicle agreements.
• Rental agreements were not seen in 73 per cent of the sample examined.
Questions as to why documentation failed to accompany the authorising of the rental of some of the vehicles also remain unanswered. “There was no evidence of a formalised or documented system in place to manage the rental of vehicles. Vehicles were rented as and when required on a continuous basis. There was no evidence that the rental of vehicles was coordinated at a management level. We found no documented guidelines for contract negotiations or for the selection of suppliers,” the report stated.
“Information on rentals was not maintained in a manner that enabled the number of vehicles rented each year or the cost of vehicles per unit to be easily identified. The responsibility for rental of vehicles and maintaining rental records was not part of the portfolio of the Transport Branch. These systematic weaknesses in the management of leased and rental vehicles have led to administrative problems and potentially life-threatening failures.”
Late payment to suppliers
Further probing also revealed that the failure to pay suppliers in a timely manner also posed a challenge. An example of this, the report stated, was when a supplier threatened to seize a vehicle after a request for approval of a payment for $48,266 was made for rental of a vehicle over a seven-month period—January to July in 2006. There were similar instances during 2005/2006 involving lapse of payments for five invoices.
The report listed the delay in payment as a reflection of poor management of funds. “We found from our sample of 117 payment vouchers that there were several instances where late payments exceeded one year. “We found that vouchers were paid based on letters from suppliers which did not have invoice numbers quoted. Several credit notes each for a sum of $699 were seen among invoices submitted for rental payment. The PSAU was unable to provide us with explanations for these credit notes,” the report stated.
The report further cited the following reasons for “weak” payment controls:
• Photocopies of invoices were used to effect payments
• Cheque numbers were not recorded on payment vouchers
• Documented rental agreements were not made available
Another instance of the late payment practice was evident in 1996, when the Ministry of National Security leased some 100 vehicles from the National Insurance Property Development Company Ltd (Nipdec) for use by TTPS. Sixty of the 100 vehicles, the lease agreement stated, were rented for a period of 36-months at a monthly rate of $183,214.69. The sum of $168,964.69 represented the rental of the vehicles, while $14,250 was spent on repair and maintenance of the vehicles. However, the TTPS also failed to make timely payments to Nipdec to cover the vehicle rental over the three-year-period, and in 2005 the ministry was informed of an outstanding debt of $788,422.56 that was owed to the company.
Rental vehicles sold and duplicate purchase payments
Financial complications did not end there though, as Nipdec questioned under whose authority permission was granted for leased vehicles to be “apparently sold” by the TTPS without having legal title to the vehicles. No explanation, the report stated, was given for this. The queries continued due to the absence of a paper trail and communication. The ministry was also called upon to explain duplicate payments relating to the purchase of two Hilux vehicles. The audit discovered that the ministry paid the sum of $237,166 for the two vehicles in April 2007 and also in September.
The discrepancy was discovered after both receipts showed the same registration number, engine number and chassis number for the purchase of the two vehicles. The matter, Sunday Guardian learnt, is being investigated at present. Further discrepancies, the report stated, were discovered after the Project Management Unit (PMU) was unable to provide the vouchers for 146 vehicles acquired in 2006. Investigations revealed photocopies of the same Central Tenders Board approvals were used by both the PSAU and the PMU to effect payment for purchases.
‘Police Service should establish procurement policy’
Condemning such practices, the report stated: “The Police Service should ensure that a procurement policy is established, approved and documented as a matter of urgency. The strategy should place an expectation that procurement of vehicles is geared towards obtaining the highest possible quality at the lowest possible price that forms a best fit in delivering an effective and efficient service to the public.” The report also emphasised the need for greater communication between the Transport Branch of the Police Service and the Project Management Unit of the Ministry of National Security. As to why police officers continue to fail to follow the necessary guidelines, the report stated that the present Standing Orders should be updated.
“The Police Service should assess the reasons why officers do not follow the guidelines by the Standing Orders. Where instructions are burdensome, unrealistic, outdated and no longer meet the needs of the increased vehicle fleet, a review is necessary,” the report recommended. In concluding, the report stated the management and maintenance of Police Service vehicles show that management needs to make some strategic decisions on the future of fleet management in the TTPS. In doing so, the report stated that a decision must be made on whether the TTPS would be responsible for full fleet management or for specific areas.
Noting that the Standing Orders on which the TTPS relies for guidance are clear but do not address full fleet management, the report further stated that the strategies in place for purchasing, leasing, disposal and maintenance/repair of vehicles are not adequate. As a result, the following recommendations were made:
• Management should establish a comprehensive and effective fleet management system without delay. The system should include adequate policies and procedures for acquisition, replacement, use, maintenance, repair and disposal of vehicles. The system should include the monitoring at all levels especially by heads of divisions and officers in charge of stations to ensure proper compliance with the policies and procedures. Document strategies would enable understanding by all users and continuity by current and subsequent managers.
• The Standing Orders on which the Police Service relies for guidance with respect to fleet management should be updated.
• The Police Service should put in place a coherent policy that evaluates the cost and service delivery benefits derived from leasing and renting vehicles on a continuous long-term basis as against purchasing vehicles. The arrangements with suppliers should bring cost-benefit to the TTPS. They should negotiate rates to achieve favourable terms.
• The Police Service should ensure that the vehicle fleet policy provides specific guidance on the disposal of vehicles. The policy should give priority to the value for money of all repairs, whether due to age or vehicle failure/damage. Records showing basic information on the historic life, repair and maintenance of vehicles should be maintained in order to allow analysis of the costs associated with depreciation and wear and tear of vehicles and facilitate informed decisions.
• The fleet manger should place urgent and immediate emphasis on the maintenance of records which track each vehicle’s life cycle, a fundamental asset management requirement.
• The paper-based (file) system should be reviewed and if found to be inefficient, urgent consideration should be given to addressing the deficiencies by using a networked computerised fleet management system.
• The Police Service should ensure that the strategy must consider all operating costs and any additional cost to the State when the vehicle is not available for use. While there may be no one standard maintenance guide that will cover all vehicles, preventive maintenance should be developed as it is key to avoiding repair or replacement of costly vehicle components.
• There should be greater communication between the Transport Branch of the Police Service and the PMU of the Ministry of National Security with respect to the acquisition of vehicles for the Police Service.
By a letter dated October 2009, the recommendations were submitted to the office of the acting deputy commissioner of police for information and review. In January 2010, the department responded acknowledging the recommendations indicating plans were on stream to make the necessary changes.
Lee-Assang fails to answer
Questions e-mailed to the director of Public Affairs Unit of the TTPS Sharon Lee-Assang remained unanswered. Contacted Friday, on whether a response would be forthcoming, Lee-Assang questioned how Sunday Guardian was able to obtain a copy of the audit. “You are asking the TTPS to comment on an internal audit. This is confidential information that was leaked. I am trying to get a clear picture of what putting this information in the public domain would do. What is it going to do, you need to explain this to me? This is confidential information.”
