Wed | Feb 19, 2020

Party cover-up - Expenses recorded as meeting and seminar spending by CMU

Published:Friday | January 17, 2020 | 12:51 AM
Fritz Pinnock addresses a party held for then Education Minister Ruel Reid. An auditor general’s report uncovered that attempts were made to classify expenses related to the party as for a meeting.

A party staged for discarded former education minister Ruel Reid in April 2017 by the Caribbean Maritime University’s (CMU) beleaguered president, Fritz Pinnock, was labelled by the institution as a meeting and seminar.

Pinnock, in April 2017, approved payments totalling $674,930 for a party for Reid, which included $160,000 for rental of boat and $514,930 for decor for the cocktail party on the boat.

“Review of CMU’s general ledger showed that the expenditures were classified as meeting/seminars and marketing activities, respectively. The requisite payment vouchers and cheques for rental of the yacht were not provided for review,” a special audit report from the Auditor General’s Department into allegations of malpractices at the university stated.

The report, seen by The Gleaner, said that on May 29, 2019, the CMU president reported to Parliament’s Public Administration and Appropriations Committee (PAAC) that a debt of US$8,300, which had been incurred by the university in relation to its cheerleading team, was paid by the co-owner of Logistics Company 1.

According to the report, Pinnock asserted that the obligation arose in a context where Logistics Company 1 provided financial assistance. However, the report stated that the CMU was unable to provide the auditor general with evidence that the financial assistance had been provided and that an agreement was in place.

Pinnock had told the PAAC that the businessman was part of a group called ‘Friends of Ruel Reid’ that was organising the soirée to recognise the achievements of the former education minister and wrote to CMU on April 10, 2017, requesting assistance.

And it appeared that the education ministry sought to cover its tracks when it designated payments amounting to more than $400,000 for a party for Pinnock on August 16, 2018, as expenses for an official meeting.

This was uncovered when a team of auditors from the Auditor General’s Department reviewed payment vouchers and supporting documentation for the party that stated that the expenses were for “hosting meeting with the Caribbean Maritime University and the Ministry of Education, Youth and Information on August 16, 2018”.

However, the auditor general’s special audit report was blunt, stating that the then chief education officer (CEO) Dr Grace McLean approved payments totalling $406,747.57 for a surprise birthday party in honour of Pinnock.

Providing a breakdown, the auditor general said that McLean approved hotel charges amounting to $320,082.75, portrait frame of the president in the sum of $11,666.82, music and photography attracting the sum of $45,000, and stand-up comedy for $30,000.

The report called attention to a memorandum dated August 14, 2018, addressed to the then CEO from ‘Project Coordination’ in which a request was made and approved for the payment of $277,290 for hotel expenses. The auditor general said the approval was given by McLean on August 15 and the payment executed on the same day.

In a November 2019 response, the ministry said that “the CEO did not host a party for the president of CMU but merely followed instructions given by the minister to coordinate the activities on behalf of the ministry. The approval of $406,000, the majority of which ($277,000), represented the cost for the venue and was in the allowable amount for signing off by the CEO based on the procurement guidelines and hence no further approval had to be sought. It must be noted that both ministers and permanent secretary at the time attended the party.”