Wednesday, May 8, 2013

Audit Report: The National Insurance Board (NIB) Salaries and Bonuses were Unauthorised

Report: NIB Salaries and Bonuses Unauthorised

By Ianthia Smith
Jines Bahamas

The National Insurance Board (NIB) audit report noted that former Chairman of the NIB Board of Directors Patrick Ward increased suspended Director Algernon Cargill’s base salary from $140,000 to $171,225.50 from October 20, 2008 to October 19, 2011 without the proper approval.

According to the controversial and scathing report the increases were given without the approval of former Prime Minister and NIB Minister Hubert Ingraham, NIB board of directors and human resources.

The auditors from Grant Thornton sought advice from Thomas Evans QC, senior partner at Evans and Co. Attorneys at Law to determine whether the authorisation and payments of executive salaries and bonuses by Mr. Ward without the knowledge of the proper authorities were in accordance with the NIB act.

But in his opinion, the attorney indicated that Mr. Ward, in approving these payments without the full knowledge of the NIB board and the human resources committee.

That such actions were ultra vires, or beyond the powers of both the board and human resources and consequently are void and of no effect.

Additionally, Mr. Evans said in the report that Mr. Cargill and Human Resources Vice President Richenda King in submitting the proposal for salary increases to Chairman Ward for authiorisation may lead to an inference that they were complicit in the ultra vires conduct of the chairman.

Also from the scathing report Grant Thornton outlined the findings of an interview the company did with Mr. Ward and is reported as saying, “I believe that I did not do anything illegal or unethical and I would certainly react very strongly if someone tried to tarnish my reputation.”

The interview also said Grant Thornton asked Mr. Ward why the Board was not informed about Mr. Cargill’s increases.

According to the report, he replied, “We did not discuss details of the executive remuneration at the full Board meetings. The minister does not approve annual increases. The minister approves the initial contract/terms of the contract,” he continued.

“You cannot run to the minister every time for salary increases. The previous minister didn’t and as far as I’m aware, it has never been done.”

The report also noted that Mr. Cargill took home more than $915,000 from 2011 to early 2013 acting as an NIB representative on the Commonwealth Brewery Limited, Cable Bahamas Limited and Bank of The Bahamas Limited boards.

May 08, 2013

The Bahama Journal