MEMBERS OF Parliament's Public Accounts Committee (PAC) turned up the heat on executives of Fiscal Services Limited (FSL) yesterday, seeking answers for why contracts valuing US$2,241,480 (J$197 million) were awarded to two companies in breach of government's procurement guidelines.

Auditor General Pamela Monroe-Ellis, who raised the issue in her annual report, also questioned the non-deduction of income tax from the emoluments of approximately US$2,976,400 paid to 22 employees in overseas consultancy firms from January 2006 to October 2008.

Strong criticism

Fiscal Services Limited also came in for strong criticism from the PAC for not knowing whether its current contractors were complying with the government requirement of having a tax compliance certificate, a prerequisite for doing business with the State and its agencies.

Dyon Woolcock, acting managing director of FSL, told the PAC in Gordon House yesterday that the company was seeking to correct breaches for future contracts.

"It appears over the years that we have not necessarily stuck to the letter of the law in terms of the procurement guidelines," Woolcock admitted, pointing out that since the auditor general raised the issue in her annual report, the agency was now seeking to get its house in order.

The FSL head said the agency had since written to the Taxpayer Audit and Assessment Department seeking guidance on the matter.

Follow-on contract

To date, she said the company had received one approval from the National Contracts Commission for a follow-on contract.

Woolcock, who was accompanied by Barrington Senior, director of finance and administration, sought to explain why the current contracts were not in compliance with the procurement rules.

She said FSL engaged the services of companies with specialised skills from as far back as 1997, prior to the introduction of the procurement guidelines.

The FSL executive said technical skills were needed to execute the contracts and the company found it useful to work with contractors who were already involved in certain projects. This approach, she said was more cost effective and efficient.

FSL has multiple contracts with two foreign companies.

On the issue of tax compliance, committee Chairman Dr Omar Davies chided the company's director of finance for being ignorant about the status of its contractors in relation to their tax compliance.

edmond.campbell@gleanerjm.com