Yesterday morning, staff and students of the University of the South Pacific received a summary of an independent investigation report written by BDO Auckland. The audit was commissioned in response to damning allegations raised by the Vice Chancellor Pal Ahluwalia, who joined the University in late 2018.
The report was shared with the Daily Post by concerned stakeholders.
Mr Ahluwalia’s allegations became public after they were leaked to Islands Business magazine. This led to a rancorous tit for tat in the media between the Vice Chancellor and Council chair Winston Thompson. The magazine recently reported that Mr Thompson had tried to have the new Vice Chancellor sacked.
The BDO report appears to validate many of the allegations raised. But it adds a caution: The company attempted to trace all 26 allegations using university records, but “due to the level and/or quality of documentation retained by the USP, this wasn’t always possible. As a result, BDO was not able to substantiate a number of the allegations.”
Nonetheless, the report summary cites “serious concerns that require attention and action.”
It mentions inducements offered during contract renewal negotiations in breach of policy. It disclosed that many inducements were offered as a percentage of overall salary, rather than the traditional modest one-off sign-on bonus amounts.
Acting allowances also appear to have been used without proper control or consideration. “BDO found that these allowances have been paid to some staff extensively, with very little policy guidance”.
The summary report suggests that USP’s behaviour was not consistent with other universities.
The same appears to have happened with bonuses. “BDO found that bonuses and, in some cases, multiple bonuses have been paid extensively to staff which is in breach of the USP policies.”
The summary continues, “It appears that a culture of entitlement to bonuses has developed rather than being a mechanism to reward exceptional effort and performance.”
The summary coyly suggests that consulting contracts may also have been abused. “The policy intends to ensure that the USP recovers all costs associated with delivery of the services, however, this was not observed across the agreements that BDO reviewed.”
In short, they could not prove that people had actually done the work they were paid to do.
The report spends a good deal of time outlining the gulf of leadership in Human Resources, stating, “USP’s HR function has been without consistent leadership for many years.”
The summary dodges the most difficult questions. Rather than outright state that Mr Thompson acted outside his authority, as alleged in the Ahluwalia report, the report resorts to stating the negative. “BDO’s view is that a majority of the decisions investigated were made within the boundaries of the VCP’s Ordinance.”
This implies that some of the decisions did fall outside the boundaries.
Even then, BDO Auckland hedges, adding that even though many of his actions weren’t outright breaches, “when critically analysed, the rationale for many of the decisions taken is unclear.”
Most troubling, the summary reminds the University that many of the problems highlighted in the report were known to USP.
“These HR and payroll concerns were reported in accordance with USP’s standard internal audit reporting process across three reports. The conclusions within these reports point clearly to a need for greater oversight, control and management of the HR and payroll functions at the USP. The outcomes of the BDO investigation suggest that the recommendations raised have only been partially implemented, or in some cases, not at all.”
The summary concludes: “While the allegations highlighted in the Paper have arisen in an unfortunate manner, they have raised serious concerns that require attention and action.”