Auditor says $500,000 has not been paid to app developer in legal dispute with Government
More than $500,000 of payments earmarked for a company — understood to have been hired by the Government to deliver a mobile application — remained in the Consolidated Fund when the Auditor-General compiled her latest report, she said.
Heather Thomas told The Royal Gazette that $1.7 million was “raised” in a financial records system but that only $1.2 million was transferred to the firm, BPMS Ltd.
She was speaking after a report released by her last month said that the Government made payments to the vendor totalling $1.7 million by July 2022.
A spokesman for BPMS, a mobile software company that would fund a not-for-profit incubator on the island for technology start-ups, said later: “Contrary to the report, BPMS was paid just under $1.2 million in February 2022 for invoices submitted for agreed services provided from April to October 2021.
“No further payments have been received and have been a matter for the writ currently filed against the Government.”
The Auditor-General’s report, Government of Bermuda’s Response to Covid-19: Travel Authorisation, said reviews of documents “revealed that the Government, represented by the Premier, signed a service agreement with vendor/supplier, BPMS Limited” effective from August 24, 2020.
It added: “The service agreement was later updated and signed by the Permanent Secretary, Cabinet Office, effective from April 12, 2021 (commencement date of March 8, 2021 and completion date of February 21, 2026).
“There was no evidence of any tendering or request for proposals process and there was no evidence of Cabinet approval.”
The report said the service to be provided under the contract was “in the form of a mobile portal application being an interactive tool that allows persons to remotely access and pay for public and private goods and services”.
It added: “It should be noted that although the application has not yet been put into operation, the Government has been making payments to the vendor ($1.7 million so far, in July 2022).
“The Code of Practice for Project Management and Procurement, and Financial Instructions were not complied with in relation to this project and as such public funds have not been utilised with due care.”
Ms Thomas explained last week: “$1.7 million has been raised in the government reporting, in terms of what we have in the government system of J̃. D. Edwards [resource planning software].
“$1.2 million was actually electronically transmitted and $525,000 was actually held back.”
She added that the money would have been “sitting” in the Consolidated Fund — the Government’s general operating fund.
Asked for comment last week, a government spokeswoman said: “At this time, we cannot provide any further information as matters related to it are before the court.”
BPMS is one of three linked organisations that launched legal action against the Government last year.
The company was listed as a plaintiff, along with InnoFund and the InnoFund Innovation Incubator, in a writ that claimed for loss and damage.
It was alleged that the Government failed to pay for services and products provided after agreements were made.
Operations at the incubator were suspended last December amid the dispute.
The BPMS spokesman said last week: “BPMS demonstrated the platform to various government officials prior to entering into the final agreement and did its best to confirm that all procurement practices were followed by insisting that the relevant language confirming as much was included in the service agreement.”
He added: “The BPMS platform and portal has been available for use since the agreement dated April 12, 2021.”
The spokesman said: “BPMS, InnoFund and the InnoFund Innovation Incubator — i3 — continue to stand by their commitments and agreements and remain open to resolving the dispute with the Government.”
David Burt, the Premier and Minister of Finance, told the Gazette earlier that his initial review of the Auditor-General’s report showed “a number of factual errors and incorrect inferences, which could have easily been clarified” if her office "would have reached out for clarification in advance of publication”.
Asked specifically about reference to the BPMS agreement, he added then: “As has been stated, the Government is currently in the courts on matters related to the contracts referred to in this section and, therefore, no further information can be provided at this time.”
A speedy response was required in the face of the coronavirus pandemic but there was a need to return to standard practices later, the Auditor-General said.
Heather Thomas told The Royal Gazette that her office acknowledged there was no road map or handbook for how to tackle the Covid-19 crisis.
It came after an Auditor-General’s report, Government of Bermuda’s Response to Covid-19: Travel Authorisation, noted: “Multiple violations of the law and the Code of Practice for Project Management and Procurement in the awarding, development, implementation and operation of the electronic travel authorisation portal and the processing and collection of revenues generated by the use of this facility.”
The portal was the subject of a contract between the Bermuda Government and resPartner Ltd and resulted in invoice payments to the company of more than $6 million, the findings said.
About $21 million was said to be collected in revenue from inception of the platform to October 2022, “contributing a significant amount of revenue source to the Government’s Consolidated Fund account”.
Ms Thomas said last week: “When we’re speaking about the pandemic, it has been recognised by this office multiple times that it required a swift response and we’re talking about people’s lives that were at stake, so it required an immediate response.
“We had recognised that there may have been protocols that were actually put aside to address the matter at hand, as it should be.
“At the same time, at some point later down the road, there was a necessity to go back to the norm, because those rules and regulations are in place to not only protect the public but also the public purse.”
She added: “We recognise at the time there was no handbook, there was no road map.
“The Government was reacting to ensure the safety of the Bermudian citizens, as they should.”
David Burt, the Premier and Minister of Finance, said earlier that his “initial review” of the report showed “a number of factual errors and incorrect inferences, which could have easily been clarified if the Office of the Auditor-General would have reached out for clarification in advance of publication”.
He added: “This report discusses actions taken by the Government while addressing a once-in-a-century pandemic taken to protect the health of residents while trying to find ways to address the severe economic and financial challenges.
“It is recognised, accepted and has been stated by Cabinet that in some cases, given the urgent need to address critical matters on an often expedited basis, not all of the standard steps were followed.
“These matters were subject to review and appropriate corrective action taken.”
Ms Thomas said she had no response to the Premier’s comments and was not aware of what, specifically, he referred to.
She added that “we share our entire report to all relevant stakeholders that were either interviewed or touched by it, to give everyone an opportunity to review the report in entirety and to provide comment; that was done also with this report”.
Ms Thomas confirmed that reports were not presented to the Premier until they were laid in the House of Assembly.
She explained that by “stakeholders” she meant government public service employees.
Ms Thomas hoped members of the public took note of reports released by the Auditor-General’s office.
She said: “Our office does not drive the change.
“Our office provides that information to allow persons to take it and then ask their relevant MPs or other public servants the questions.”
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