The Tribune

By LAMECH JOHNSON

Tribune Staff Reporter

ljohnson@tribunemedia.net

POLICE have received a complaint that an employee of The College of The Bahamas has allegedly defrauded the institution out of at least $25,000, The Tribune has learned.

Though the institution did not go into explicit details about the matter in a statement issued on Friday because it was “limited with respect to its ability to disclose further information,” the college did confirm that police were brought in to conduct the investigation.

COB added that once it received details of the alleged “violation,” officials suspended the individual in question without pay pending the outcome of the police probe.

However, according to well-placed sources, multiple people were being questioned by police concerning the fraud. The source also believes the $25,000 figure may increase as the investigation progresses.

“They claim the individual(s) altered records so that they were paying themselves a large amount of money, about $25,000 that the college is aware of so far,” one source said.

“So for people who died, retired, or left the college, this ring was (allegedly) still processing monthly payrolls and sending the salaries to accounts and then withdrawing the money,” the source added.

Attempts to reach the Commercial Crimes Unit at the Central Detective Unit were unsuccessful yesterday.

In Friday’s statement from COB, the college said: “Upon receipt of information of the suspected violation, the college immediately suspended the individual without pay pending further investigation, alerted the relevant authorities and requested a full and thorough investigation.”

“The college will now let the criminal justice system take its course. This is in keeping with the institution’s fiduciary responsibility to uphold public trust. The college will always stand for transparent and efficient corporate governance,” the statement added.

Last month, The Tribune reported on an audit of COB completed this year by Baker Tilly & Gomez (BTG) for the period ending June 30, 2011 that provided insight on areas of weak internal controls at the institution.

The 36-page document obtained by The Tribune lists a litany of faults found in COB’s internal control processes and procedures, ranging from failures to conduct timely bank reconciliation procedures to failure to adequately train staff.

One practice by the college, the report noted, could have even resulted in theft.

“When a payment that is made incorrectly, such as $3,500 is keyed instead of $350, the supervisor deletes the entry and the correct entry is then made,” the report noted, adding: “This could result in entries being deleted after cash is received and could result in theft…We recommend that a reversing entry be made of -$3,500 and the correct amount of $350 be keyed in. This will provide a proper paper trail.”

With respect to financial statements, the report described instances where inaccurate bookkeeping resulted in overstatements and understatements of certain accounts to the tune of hundreds of thousands of dollars.

With regard to funds allocated for restricted purposes, auditors were unable to “trace back how the balances (were) allocated” and how the funds were used.

COB’s President Dr Rodney Smith, in a subsequent interview with this newspaper, acknowledged “systemic” problems in COB’s past financial management and stressed that the institution will not repeat past mistakes as it transitions to a university.

However, on the key question of whether someone should be held accountable for COB’s concerning fiscal management over the years, he said no, adding that the problem was not the fault of any particular person.

“The honest answer to that is that it is historically systemic. When I say that, keep in mind, again, the circumstances surrounding the events. We live in a country where whenever we change a government we actually start all over. I think that with the University of Bahamas Bill we are trying to move into the direction of continuity so that that wouldn’t keep happening.”