Audit Finds Delta Petroleum Limited In Breach of Agreement With Government of Montserrat

The Office of the Auditor General is pleased to announce that its report entitled The Government of Montserrat’s 2010 Agreement with Delta Petroleum (Montserrat) Limited was presented to the Legislative Assembly on 26 October 2021.   

Background

In July 2010, the Government of Montserrat and the Managing Director of Delta Petroleum Limited, signed an Agreement for the purchase and ownership of a 3,500-gallon Tank Wagon. This followed the Cabinet’s Decision 150/10 dated 15th April, 2010, in which the Council agreed: [1] the GOM’s purchase of a tank wagon in partnership with Delta Petroleum Limited at a cost of approximately EC$450,000, the GOM’s share being fifty percent (50%) of the costs; and [2] that the GOM would settle the outstanding Liquid Petroleum Gas losses of approximately EC$188,886.91 to Delta Petroleum (Montserrat) Limited. 

The Council also agreed the following: [1] that a cost of approximately EC$0.06 per gallon be included in the pricing of diesel and gasoline over the next 5 years to finance those costs and [2] that the GOM should enter into an agreement with Delta Petroleum (Montserrat) Limited for 50% ownership of the tank wagon.

Key Findings 

·       The Office of the Auditor General was unable to verify whether the amount paid for the truck cost more or less than the EC$450,000.00 specified in the agreement as a receipt was not presented for review.  Additionally, some source documents were not presented for review for varying reasons to include documents were damaged and subsequently discarded.

·       Delta Petroleum has breached the Agreement by exceeding the time-limit for charging the additional $0.06 per gallon on the cost of Diesel and Gasoline for the purpose of the GOM’s reimbursement.

·       A statement of Excess Charge dated 9 March 2021, from the Department of Trade shows that there had been a cumulative overpayment to Delta Petroleum (Montserrat) Limited of $299,708.00.    

Recommendations

Based on the findings, The Office of the Auditor General recommends the following:

That the Delta Petroleum (Montserrat) Limited cease charging the $0.06 per gallon with immediate effect as the duration specified in the agreement has long expired, in excess of five (5) years.     

 That the GOM make the necessary arrangement to recoup the excess charges from the Delta Petroleum (Montserrat) Limited immediately.

The report in its entirety can be found at the Montserrat Public Library, on the Office of the Auditor General Website and Facebook Pages or by requesting an electronic copy from the Office of the Auditor General, located upstairs Angelo’s Complex, Brades. E-mail: audit@gov.ms; Telephone: (664) 491 - 3460 or 491 – 4569.