Sep 19, 2019 Last Updated 12:50 AM, Sep 19, 2019

By Samantha Magick

The Auckland-based accounting firm tasked with investigating allegations of mismanagement at the University of the South Pacific appears to have vindicated the University’s new Vice Chancellor, who first raised concerns about hiring, human resources and remuneration practices.

BDO has also stated that “further investigation is required” into the allegations and has made a significant number of recommendations relating to processes and policies at USP.

BDO was asked to conduct the investigation following allegations made by the recently appointed Vice Chancellor Professor Pal Ahluwalia about decisions made by his predecessor and other senior USP staff over a ten year period.

It says “oversight, governance and control of remuneration  is a key weakness across the university” and that four remuneration  mechanisms—inducement allowances, responsibility and acting allowances, bonuses and consultancy arrangements—“have collectively been exploited and have led to significant cash leakage across USP over a number of years.”

In a summary of its report released this morning, BDO says while the majority of decisions investigated were made within the powers of the (former) Vice Chancellor, “the rationale for many of the decisions taken is unclear.”

The summary does not state what decisions may have fallen outside this “majority of decisions.”

BDO says it’s clear that the USP’s human resources function has been “without consistent leadership for many years” and concludes “this lack of leadership has contributed to the weaknesses” across HR.

BDO says it was not able to trace all the allegations through documents because of the “level and/or quality of the documentation retained by USP…As a result BDO was not able to substantiate a number of the allegations.”

The summary does not state for which allegations the documentation held by USP was either inadequate or unavailable.

BDO also states that similar concerns had been identified by the USP’s internal audit service provider over the past few years, but it appears “the recommendations [made by the auditors] had been only partially implemented, or in some cases, not at all.”

BDO recommends:

  • A full review of the USP’s approach to inducement allowances
  • Development of a single, comprehensive policy for staff setting out its approach to responsibility and acting allowances
  • A full review of bonus calculations and payments
  • A forensic review of consultancy agreements that are currently active, or have been recently completed
  • A comprehensive structural review of the USP’s human resources function
  • A full review and amendment of the USP’s approach to the employment of people who have reached retirement age
  • Expansion of the role of the Remuneration Committee to include succession planning for all key senior roles across the USP.

BDO says with the airing of the allegations, USP has the “opportunity to reflect and take corrective action that will ultimately improve the culture and quality of education and research at USP.”

The Council of the University of the South Pacific has appointed a committee to implement the recommendations of BDO Auckland.

Exclusive

By Samisoni Pareti

Winston Thompson, the besieged pro chancellor of the University of the South Pacific has sought the suspension of the USP vice chancellor and president, Professor Pal Ahluwalia.

Ambassador Thompson made the request in a confidential paper he submitted to the USP Council yesterday. The council is currently meeting at a hotel in Nadi, Fiji.

At this point,  IB Online is yet to confirm whether the Council is deliberating on Thompson's proposal. All that we were told was the Council meeting finished late yesterday evening because of Thompson's presentation.

It is believed that his 17-page submission concludes with eight recommendations, and that they include a call for the immediate suspension of Professor Ahluwalia and for an investigation into his performance at the regional university.

Thompson accuses the Canadian academic of tarnishing the reputation of the USP and working to undermine its operations.

The confidential paper confirms what the retired Fijian diplomat had told Islands Business magazine in May; that it was his personal wish that Professor Ahluwalia be dismissed.

It follows the leaking of a confidential report authored by Ahluwalia, which makes allegations of gross abuse and mismanagement against high level managers at the university. 

The uproar triggered by the Ahluwalia report forced the USP Council to commission an independent investigation into the allegations when they met in May in Vanuatu .

That investigation is complete, but reports reaching IB Online say the BDO Auckland report was—at least initially—not tabled when the Council meeting began in Nadi yesterday.

The Council secretariat instead opted to circulate hardcopy versions of a report compiled by the USP Council's Audit & Risk Compliance committee on the BDO report.

The Compliance committee is headed by Mahmood Khan of Fiji, who is a retired partner of a BDO franchise in New Zealand.

The Council meeting in Nadi is expected to conclude later today.

The University of the South Pacific has invited four Auckland-based accounting firms to bid for the task of undertaking an independent investigation into allegations by the USP’s current Vice Chancellor and President Professor Pal Ahluwalia.

The allegations are raised in a paper “Issues, Concerns and Breaches of Past Management and Financial Decisions” which questions the circumstances around a number of appointments and financial decisions during the tenure of the previous VC.

Bids to conduct the investigation will close on Monday and the USP’s  Audit and Risk Committee will meet on Tuesday to appoint the investigator.

Meanwhile Fiji’s Attorney General, Aiyaz Sayed-Khaiyum has told parliament it wouldn’t be prudent to comment on the matter. Fiji is USP’s largest funder and provides the majority of its students.

Australia’s High Commission in Suva has also declined to comment on the matter.

The report of the Independent Investigator is due by August 16.

For detailed coverage of the controversy at USP, pick up a copy of the June issue of Islands Business.

The final report of an independent investigation into allegations of mismanagement and abuse of process at the University of the South Pacific (USP) is due by August 16.

The terms of reference for the investigation have been drawn up, and sent to Council members for their approval.

In a statement released today, USP’s Deputy Pro-Chancellor Aloma Johansson and the Chair of the USP Audit and Risk Committee Mahmood Khan state that once the TOR is approved, the risk and audit committee will invite several independent investigators to register their interest, with a view to starting the investigation by June 20.

The Fiji Independent Commission Against Corruption is conducting its own investigation into the allegations, which were first reported by Islands Business  last month.

The allegations are detailed in a lengthy document which questions allegedly speedy appointments and contract renewals for at least eleven senior members of the university staff, most of them Fiji nationals working at the main campus in Suva.

Since the allegations were first aired, USP’s second largest funder, New Zealand’s foreign minister has said his government is asking for explanations over the matter.

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