The government-run Nutrition Products Limited paid $143 million to companies and individuals connected to board members and management staff to provide a range of services, expenditures which have raised red flags for the Auditor-General. According to an Auditor-General’s Report tabled Tuesday in the House of Representatives, the funds were used to cover services such as transportation, repairs, maintenance and sanitation. Auditor-General Pamela Munroe Ellis noted that, while related party transactions are not prohibited by law, the nature of the transactions at Nutrition Products Limited is likely to create potential conflicts of interest. The Auditor-General found instances in which Nutrition Products Limited breached the procurement law in the manner in which it engaged service providers. It was noted that board members acted contrary to ethical standards and fiduciary responsibility by failing to disclose connected party relationships. In one instance, the company paid a distribution company $69.6 million, during the period November 2010 to January this year, to provide transportation and haulage services. The audit revealed that the registered owner of three trucks used by the distribution company was an investment company, of which the former chairman of Nutrition Products is a director and shareholder. The former chairman served two tenures on the state entity’s board: 2007 to 2013 and 2017 to December 2020. Payments to the distribution company stopped in 2013, when his first tenure ended, and restarted in 2017. The Auditor-General reported that the distribution company received delivery routes with the highest rates and was the only haulage contractor assigned to perform shuttle services. This resulted from the decision to centralize the distribution of meals to schools, from the Kingston plant. The Auditor-General said the risk of conflict of interest increased as the former chairman was involved in the decision to centralize the distribution process. Mrs Munroe Ellis reported that the decision to centralize the distribution process turned out to be a costly option for Nutrition Products Limited, demonstrating that the former chairman ignored the principles of fiduciary responsibility and duty of care. Repairs and Maintenance The Auditor-General also discovered that Nutrition Products Limited relied on external service providers to carryout routine repairs and maintenance of its plant and machinery, instead of utilizing its internal maintenance technicians. She reported that the repairs and maintenance were mostly in an unplanned manner. The Auditor-General reported that from 2017 to this year, Nutrition Products Limited paid an individual $49 million to undertake repairs and maintenance work, many of which should have been performed by its internal maintenance technicians, based on their job descriptions. There was no evidence that the company assessed the cost-effectiveness of using external service providers instead of internal maintenance technicians to ensure it received value for money, the report revealed.