Auditor general urges serious study of recommendations for CMU

Auditor general urges serious study of recommendations for CMU

Senior staff reporter

Sunday, January 19, 2020

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Auditor General Pamela Monroe Ellis has urged the Caribbean Maritime University (CMU) and the Ministry of Education, Youth and Information (MoEYI) to seriously consider her recommendations to resolve certain weaknesses identified in the internal control mechanism at the university.

In her special audit report (SAR) which is to be tabled in the House of Representations on Tuesday by Speaker Pearnel Charles, Monroe Ellis insisted that if the weaknesses in the CMU's internal control environment, which were identified in her department's audit of the institution completed last year, are left unresolved they could “expose the university to financial losses.

“Further, CMU and MoEYI should determine whether expenditure, specified in the report represent proper charges on the university, with a view to recovering said amounts from the officers responsible for the payments made,” she added.

She said that the audit found weaknesses in the university's governance practices and internal control environment, which were manifested by a lack of financial transparency, breaches of human resource policy, minimal adherence to Government's guidelines, and limited accountability by the university's leadership.

“In some instances, questionable decisions by the president resulted in expenditures that created no apparent value to the university,” she added.

Former Education Minister Ruel Reid, his wife, Sharen, their daughter, Sharelle, and president of the CMU, Professor Fritz Pinnock, were arrested in October, in relation to allegations of corruption, fraud and misappropriation of public funds involving the Ministry of Education and the CMU.

Councillor for the Brown's Town Division of the St Ann Parish Council, Kim Brown Lawrence was also arrested.

The arrests followed a long probe by the Major Organised Crime Agency (MOCA), the Financial Investigation Division (FID), and the Constabulary Financial Unit of the Counter Terrorism and Organised Crime Division (CTOC) into the allegations.

Reid resigned on March 20 last year amid the corruption allegations, following the intervention of Prime Minister Andrew Holness, and Pinnock went on special leave with immediate effect pending the outcome of the probe the day before he was arrested. MOCA confirmed that the investigations involved allegations of corruption, fraud and misappropriation of public funds.

The auditor general said in her SAR that she had conducted special audits of the university for the period 2016-17 to 2018-19, “in response to public concerns regarding allegations of malpractice at the CMU”.

Parliament received 20 documents for tabling during its Christmas break, of which 19, including the Auditor General's Annual Report for 2019, were tabled at its first meeting after the break, last week Tuesday, January 14.

Leader of Opposition Business, Dr Morais Guy, asked the Speaker why the report on the MoEYI/CMU was not among the items tabled. The Speaker said he would table it when he “receives” it. It was not clear whether the Speaker meant that he was not aware of the presence of the document at Gordon House, or he had not read it. However, this raised alarm bells, as Monroe Ellis had informed the Public Accounts Committee (PAC) of the House, during its meeting earlier that morning, that the CMU SAR had been sent to the Speaker.

Charles could not be contacted by the Sunday Observer as there was no response to calls made to his phone. However, late Wednesday, Gordon House issued a brief statement from him which read:

“I wish to clarify information placed in the public domain concerning the tabling of a particular auditor general's report in Parliament. Any exchange on the matter should not be construed as reluctance to table the report. I intend to have it tabled at the next sitting of the House of Representatives.”

Although parliamentary procedures require that the report should be tabled as early as possible, it does give the Speaker some room to consult in a situation where the House is resuming after a long break. The next sitting of the House of Representatives will be on Tuesday, January 21. After the report is tabled it will be referred to Parliament's Public Accounts Committee (PAC), which is chaired by Opposition MP Mark Golding, for review after which the committee will send a report to the House for approval.

Reports from the auditor general to the Parliament are not released to the media until after they are tabled. However, on this occasion copies of this special report did reach some media personnel and was immediately reported on, despite the procedure not being followed that it be tabled before being made public.

Responding to the Sunday Observer, lawyer for Reid and Pinnock, Hugh Wildman suggested that the media carried the reports “at your own risk.

“Parliamentarians can get away with it because they are protected inside Parliament, but the media is not protected, and they [Reid and Pinnock] are concerned about these reports. They are not pleased at all, and you publish at your own risk,” he responded.

Monroe Ellis, in her report, said that the rationale for the audit was to ascertain whether the operational activities, governance and monitoring framework at the CMU were consistent with the principles of good financial management, and whether the procurement and contracts management practices accorded with government guidelines and good practice to attain value for money.

She noted that it focused on four areas: governance practices and oversight; procurement and contracts management; accounting practices; and human resources practices.

She said that the fieldwork was conducted between March 2019 and September 2019 to gather sufficient and appropriate audit evidence on which her department based its conclusions.

She recommended, among other things, that the responsible permanent secretary should ensure that an appropriate arrangement be established to effectively monitor the CMU, in keeping with the Government's accountability framework.

She suggested that the arrangement should include a system that ensures that board minutes and reports are reviewed, and other specified reports faithfully submitted to the portfolio ministry.

“The permanent secretary should ensure that such board minutes and reports are reviewed and the portfolio minister is formally apprised of significant issues that may affect the performance of the CMU, in order to enable the minister to take appropriate actions regarding the performance of the [CMU] council.

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