Cyprus Mail

And who watches the audit watchdog?

Chrystalla Yiorghadji was Auditor General from 1998 till 2014

By Angelos Anastasiou

THE audit service has uncovered a case of possible irregularities in the construction and maintenance of its own office building, which has been housing it since 2006, it was reported yesterday.

According to a letter dated last Friday, February 13, and sent to the government’s Technical Services, with a copy forwarded to the finance ministry, the nearly CYP£6 million (some €9m) contract for the construction and maintenance for 15 years of the audit service’s building was awarded to the successful bidder in 2004.

The contract’s original clause was for payment over 15 years after completion, but the contractor was paid in full in just two years in 12 bi-monthly instalments.

And this, despite the fact that the bid included a funding-risk item of nearly £1m – as payment was to be made in foreign currency – with no maintenance costs, but which the government was saddled with in the end.

Additionally, the audit service has found no good-execution guarantee by the contractor.

Calling on the technical services to look into the issues raised and to respond, the audit service also requested a detailed breakdown of the contract costs, the reasons for the renegotiation of the method of payment, the way of safeguarding the proper execution of maintenance by the contractor since no funds have been withheld as guarantee, and any possible liability of public officials with regard to the changes.

Technical Services acting director Chrystalla Mallouppa acknowledged receipt of the letter and confirmed a probe would be launched, although she said practical issues make investigation difficult.

“This is a project that dates back to 2004, and most of the officials involved are retired now,” Mallouppa told the Cyprus Mail. “We are going to retrieve all the paperwork and have a look to see what we can find out.”

The Technical Services boss said she has already assigned a department official to look into the case, and noted that the building’s maintenance is being carried out as agreed annually – although the point raised by the audit service was not that it wasn’t being carried out, but that no ‘good-execution’ clause was included in the contract.

She added that certain aspects of the issues raised by the Audit service are the remit of the Finance ministry, which had negotiated the payment arrangements.
“The Finance ministry has been copied in, and should provide the answers to the financial aspects,” Mallouppa said.

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