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Credit Union forensic audit reveals financial peculiarities

by Barbados Today
5 min read

A forensic audit of the Barbados Public Workers’ Co-operative Credit Union Ltd. (BPWCCUL) Mile-and-a-Quarter, St. Peter branch has revealed several infractions that have caused unrest among its membership.

The virtual annual general meeting (AGM) last Saturday became heated when many of the details of the report of the audit, carried out by respected firm Ernst & Young, were revealed.

Barbados TODAY understands that captured within the 66-page document, titled Review of the Mile-and-a-Quarter Project – Final Report and dated June 15, 2021, were several discrepancies in the credit union’s governance oversight model. The report stated that while serving on the board, a top official constructed a building on his land and then negotiated a lease agreement for the credit union to rent the building from him. According to the report, the initial estimated cost to set up the northern branch on the same site was $528,000, but when the project was completed, the final cost was $2.3 million.

Activist Marsha Hinds-Layne, the spokesperson for a group dubbed ‘Concerned Members of the Credit Union’, was among those voicing displeasure during the meeting.

Speaking on the report, an incensed Hinds-Layne told Barbados TODAY that for years her group had been paying attention to some questionable developments within the credit union. She claimed that each time they raised those concerns they were dismissed, so a forensic audit of the opening of the Mile-and-a-Quarter branch was triggered last year.

During last weekend’s AGM, Hinds-Layne attempted to move a motion calling for the strengthening of the by-laws to be in line with the recommendations of the forensic audit and for term limits to be introduced. However, that was deemed to be inappropriately proposed.

Hinds-Layne insisted that term limits were particularly necessary because, for far too long, there has been a revolving door of the same individuals allegedly “enabling and turning a blind eye” to what was taking place within the movement.

Some of the key recommendations in the document speak to the credit union’s limited governance oversight when it comes to money. In terms of project management, it suggested that they should sign and clearly define specific internal roles and responsibilities for the management of capital projects; and develop capabilities to facilitate the assignment of qualified and experienced Public Worker’s Co-operative Credit Union Ltd. project managers for all major capital projects.

Hinds-Layne believes that the Mile-and-a-Quarter situation was a snapshot of a general issue in the credit union. This was a point supported on Page 16 of the report, which suggested that there were systemic issues with internal control.

This internal control, the report stated, was not robust, resulting in “non-compliance to approved policies and procedures, unclear reporting structures and inadequate document retention”. There were also gaps in the procurement policy manual, the report indicated.

Hinds-Layne urged Barbadians to pay attention to what is taking place within their financial institutions, as she drew reference to the collapse of CLICO International Life Insurance.

“I think what has happened is the growth of the credit union has outstripped our ability to be able to think about the management that needs to be in place to make it a safe organization. So, we’re much bigger and we’re doing much more than the laws and accountability mechanisms that we had in place anticipated, and there are a few individuals who are using that for their personal gain. It is unfortunate and it is disappointing,” she said.

Explaining why she decided to speak publicly on the matter, Hinds-Layne said that after a decade of fighting for stronger mechanisms to ensure that the savings of Barbadians are safeguarded in the credit union, she has no hope it will get better.

“Over those ten years I have been shot down at meetings, I have been dismissed, I have been disrespected — you name it, and I have faced it in the name of the people of the Barbados Public Workers’ Credit Union. . . . There is a group of people who have decided that it is their right to use the money of the credit union with abandon. You’re not supposed to ask them about it, you’re not to question them about it and when you do that, you’re the one who is offensive. And I have no evidence that that is stopping so that is why we have to speak about it in public now. For ten years I have been trying. People can go back and get the [minutes] of the annual general meetings; this has not now started,” she said.

Barbados TODAY reached out to immediate past president Glendon Belle, who presided over the credit union during the period of the audit report, but he declined to address the issues.

“I am not in that official capacity anymore. I don’t have anything to say. You may want to speak to the CEO or current president,” he said.

When contacted, newly-installed president Lydia Lewis said a board meeting was planned for this Thursday and she would “get back” to Barbados TODAY then.

Former director Cedric Murrell also declined to comment.

“I will not be able to speak to you because I’m not the president and I don’t hold a post on the Board any longer,” he said.

Although admitting that he was a Board member during the period under review, Murrell said he was “not a principal player”.

Group Chief Executive Officer Glyne Harrison said that under the credit union’s governance framework, the matter falls under the direct remit of the supervisory committee and he was not authorized to speak on it. (KC)

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