Day: July 23, 2018

December 2014- SporTT Squandermania

In December 2014, a special audit into the operations of the Sports Company of Trinidad and Tobago (SporTT) done by the Office of the Auditor General found hundreds of millions that were paid out over the years by the company for incomplete sporting facilities, escalated costs, unjustified expenses for high-capital projects, wasted millions on recreation grounds, duplication and a history of expensive litigation relating to staff.

The report painted a damning picture of the special purposes state enterprise which had been set up in 2004 under the PNM to facilitate the implementation of sport policy and remains in operation.

The Auditor General found:

  •  A total of $411 million was spent from 2009 to 2013 on sporting facilities meant to provide “sport for all”, but that purported goal had not been achieved
  •  $2.3 billion in projects under the management of SporTT, but had no sound means of measuring progress on its objectives, gaps in records and had committed reporting breaches
  • $7.5 million in legal and other costs arose from one mass cull of staff in 2011. In five of nine cases, SporTT has no record of its contracts with the litigants, although all the terminated staff  have their contracts in their possession. 
  •  In one litigation matter the company lost, a former employee was awarded $90,000 though the employee worked “less than a day” at SporTT
  • $2.5 million has been paid to contractors/consultants for a recreation ground facility at Grand Riviere though it remains incomplete and is currently deteriorating

The Auditor General noted that SporTT was managing 182 projects at the time, including planned national facilities such as an aquatic centre; a cycle velodrome; a tennis centre; and three “multi-purpose” centres. Also under management were regional recreation grounds; local corporation grounds; and stadia.

While millions had been allocated for the highly-touted aquatic centre, velodrome and tennis centre, the Auditor General found Sportt was unable to justify high levels of expenditure for these projects.

“ Neither the Ministry of Sport nor Sportt was able to provide a ‘Sport for All’ rationale for selecting high expenditure National Facility projects in cycling, swimming and tennis.”

She further stated that measures were not in place to collect or analyse the data related to membership and participation from the national sporting organisations for each of these three and other disciplines. Additionally, SporTT did not have performance indicators to measure potential growth in these sporting disciplines to inform the construction of these projects. The projects were further dogged by delays and escalating costs.

The Report stated, “From 2005, the Ministry of Sport had sought and received approvals from Cabinet for a range of projects that were yet to be delivered. In all the high expenditure projects that were reviewed, progress had been slow.

The Auditor General found that the slow rate of progress, in all instances, had significantly increased estimated costs and that the overall conclusion was that Sportt was not giving sufficient attention to financial planning and risk management in the development and implementation of important projects, which had impacted the economy, efficiency and effectiveness of delivery of the sporting facilities. The Report also stated that the company has a high turnover on staff which had hurt its efficiency.

“Five Chief Executive Officers left the organisation over the ten-year period: the services of three were terminated and two resigned. Typically, the appointment of a new Chief Executive Officer was slow.”

Over the ten-year period, SporTT was without a Chief Executive Officer for five periods totalling three years and six months. In one instance, the post was vacant for almost 21 months: from July 6, 2008 to 31, 2010.

The Auditor General remarked: “The absence and frequent changes of Chief Executive Officer adversely affected Sportt’s administration and operations.” For example, projects were not being delivered; financial statements had not been produced; annual general meetings were not held and there was a lack of strategic approach. The billion-dollar company also had no records of confirmed board minutes prior to November 2011. There was an expensive restructuring of staff done by a consultant but the company had no records of its contractual agreement with this consultant.

“The year 2011 presented challenges, with more than 58 percent of staff leaving,” the Report stated. “This resulted from an Organisational Review and Redesign Exercise implemented by Sportt’s Board of Directors, in January 2011. De Edge Consulting Limited was engaged for this exercise. SporTT did not keep records of the contractual agreement, consultant reports or payments made to them.” The cost of the exercise was determined to be $1 million. After the exercise, 32 of the 75 staff members, including the Chief Executive Officer, were dismissed. Litigation followed, the bills for which were still being paid three years later.

“Individual staff, whose employment at Sportt was terminated, took legal action for compensation,” the Auditor General stated. In one of the concluded cases, a former employee, who worked for less than one day was awarded $90,000 in a claim for unfair dismissal. SporTT expected further payments of about $6 million. Legal representation for one case alone was $137,000. None of the lawsuits were reported to the Ministry of Finance before April 2014, in breach of public sector reporting requirements.

Of the Grand Riviere Recreation Ground project, the Report stated, “In February 2007, Sportt awarded a contract to D&L Contracting, for just over $2.4 million, to undertake construction works at Grande Riviere Recreation Ground. The completion date was April 2008. Payments in excess of $2 million (93 percent of the contract value) were made, but Sportt did not ensure completion of the works.”

Further, “In March 2012, Sportt awarded a contract for almost a quarter of a million dollars to Exeqtech Limited for consultancy services. Sportt paid $125,000, but the project was not completed.” Then, “In March 2013, Sportt contracted another company at a cost of $307,000 for design works.” Three companies later, the works are unfinished and deteriorating.

The audit involved interviews, a focus group, review of documentation, site visits, analysis of financial data and discussions with key personnel at the Ministry of Sport and at SporTT. Work was done from October 2013 to March 2014.

However, the report failed to include the controversial Lifesport programme which was, in part, administered by SporTT. That programme was shutdown after a Government-ordered review found possible instances of fraud, theft, and maladministration.