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Teachers owe $410m - Gov’t to sue them for failing to repay bonds

54% of teachers haven’t serviced loans — auditor general

BY ALICIA DUNKLEY-WILLIS Senior staff reporter dunkleya@jamaicaobserver.com

Wednesday, March 27, 2013    

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NINETY-SIX of 212 delinquent teachers who cumulatively owe the Ministry of Education $410 million in bond payments are to be slapped with lawsuits in short order.

The education ministry said the decision was taken following Auditor General Pamela Monroe Ellis' report from an audit done early last year. It is estimated that some of the monies are owed from as far back as the 1990s.

According to the auditor general, as at March 31, 2012, a total of $410.096 million was owed to the ministry by 212 teachers who failed to honour their commitment. Of this number, 114, or 54 per cent, have not made a single payment to reduce their obligations. She said the ministry was advised by the attorney general to prepare suits for 96 delinquents, but up to the time of the report this was not done.

Yesterday, newly appointed Permanent Secretary Elaine Foster- Allen was unable to provide the timeline along which the teachers became indebted, but said the ministry has "recognised that there were some weaknesses in regard to how the procedures were implemented".

"We realised that only one person was in charge of the bonding process, and we realised that this is just not enough capacity. We have set up a unit and we have been working with our legal unit to review all the files, with the help of five paralegal students," Foster Allen told the Public Accounts Committee of Parliament.

"We realise that the vast majority of the outstanding sums owed to the ministry are really to do with the 25 per cent interest rate currently being charged. We are speaking with the Ministry of Finance to find out if the rate could be looked at and reduced to the current seven per cent going rate," she said further.

Under the bonding arrangement, teachers are sent on paid study leave. The ministry, in order to ensure that they return to the system, bond them to a written agreement stating that they will return to the system, and should they not return, it is at liberty to recover the amounts paid to them during the study leave. Persons who return are expected to stay in the public school system for three years to work for the Government.

Yesterday, committee members across the divide expressed frustration with the situation which, they say, is "a recurring decimal", and the inability of the ministry officials to provide more information as to how much of the $410 million was interest.

"We don't seem to be serious about collecting. The actions appear to be recent, whereas this issue -- looking at the interest rates -- existed from the '90s. What has happened over the last number of years?" Government committee member Julian Robinson wanted to know.

"What is even more difficult to appreciate is that 54 per cent of the delinquents have not paid a single dollar to date. The stewardship of public resources is what is at stake here. It has been allowed to continue from the '90s to date. I know you are new and I am not being hard on you, but I am hard on the ministry," Opposition committee member Edmund Bartlett said.

The permanent secretary, responding to the concerns, said the bonding policy is to be reviewed. She also said the ministry's efforts to get guarantors to repay have not been successful. According to Foster Allen, among the reasons persons default is what is said in the bonding agreement, in some instances including changes in programmes during the time of study.

Diane Campbell, senior director for human resource management and administration in the ministry, said the ministry is challenged.

"Under the former permanent secretary, we had taken the decision that we should advertise the names of persons who are delinquent, we did that through the post offices. We had wanted to publish the names in the newspaper, however, we were advised by the Attorney General's Department that we should not," she said.

Campbell also said a newspaper call had been made, which had seen an increase in the amount collected.

Yesterday, Monroe Ellis said 54 per cent of the 212 teachers have never serviced the loans and these are persons who are believed to have left the system. She said 11 per cent provide some kind of servicing and 35 per cent are inadequate or inconsistent.

Yesterday, to the chagrin of committee members, the ministry officials could not provide an overall figure for the persons who have benefited from the bonding policy, or say what percentage the 212 represented. It, however, said it was still approving bond agreements.

After the body failed to get figures as to the number of persons who had benefited from bonds, Committee Chairman Audley Shaw ordered the ministry to provide a special report on the bond issue. In the meantime, he said the 25 per cent interest charged also needed to be reviewed, suggesting instead that the government treasury bill rate be applied.

Campbell said the 25 per cent was for delinquents and was meant to be punitive.

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