Investigation highlights 'entitlement culture' at U.S.P.
The University of the South Pacific (U.S.P.) has been beset by a “culture of entitlement” including the alleged exploitation of staff allowances and bonuses causing “significant cash leakage”, an independent investigation has found.
The findings are contained in a report by the Auckland branch of leading international auditors, BDO, which was presented to the Board of the University of the South Pacific (U.S.P.) last month.
The University’s Executive commissioned the independent review to examine 26 separate allegations of mismanagement made by the University’s Vice Chancellor and President, Pal Ahluwalia, against his predecessor.
The allegations made included improper hiring procedures and the misuse of entitlements by senior staff.
The former Vice Chancellor, Professor Rajesh Chandra, had been in charge of the University for ten years.
The review by the BDO found that the payment of staff salaries, bonuses and allowances was a key weakness of governance at the U.S.P. and guided by policies that were “overly complex, fragmented and outdated.”
“Remuneration mechanisms have collectively been exploited and have led to significant cash leakage across the U.S.P. over a number of years,” the report found.
This mismanagement extended to the payment of generous “inducement allowances” to staff members when renewing their contracts often “in contradiction of the conditions and intent of the Inducement Allowance Policy”.
Similarly, BDO found that allowances were “extensively” paid to some members of staff acting in senior roles and without regard to policy guidelines.
The allowances had the effect of inflating certain staff members’ remuneration to a level that exceeded university benchmarks.
“Bonuses and, in some cases, multiple bonuses have been paid extensively to staff which is in breach of the U.S.P. policies,” the auditors found.
“It appears that a culture of entitlement to bonuses has developed rather than being a mechanism to reward exceptional effort and performance”.
In addition to the financial issues raised, BDO also found that the university’s approach to hiring was inconsistent and short-sighted; the university’s human resources department had four leaders in the space of 24 months.
The auditors found a lack of consistent leadership helped drive the management issues identified.
The University was found to be too dependent on senior members of staff and have re-appointed senior members of staff multiple times after they reached retirement age.
In his initial report to the U.S.P. Executive, Professor Ahluwalia alleged that several key appointments were made prior to his assumption of the Vice Chancellor’s role this January in a “very fast” manner that included “gross violation of recruitment policies”.
He alleged a litany of senior staff were appointed to senior roles or promoted often while receiving additional responsibility bonuses of up to $7300 tala-equivalent per month. Another member of staff was alleged to have requested and received back pay to the equivalent of $77,000 tala after a promotion was backdated.
Professor Ahluwalia also alleges his predecessor requested a payment of 117 days professional development leave after taking 28 days’ leave across last September and October and receiving a per diem allowance equivalent to $24,000 tala.
A phone call and e-mails to Professor Rajesh Chandra, who is now the Chancellor of Fiji National University, were not returned.
But in an opinion piece published in the Fiji Sun earlier this month, which had been reprinted by the Sunday Samoan two weeks ago, he said he was vindicated by the report.
“All my decisions were taken during the lawful exercise of my duty and authority as the Vice-Chancellor under the direction and supervision of Council,” Professor Chandra wrote.
“The Report did not find any fraud, corruption or abuse of office against me personally.
“This is because I had led and managed U.S.P. for 10 and half years as Vice-Chancellor always within the Statute governing the delegations of the Vice-Chancellor, the Staff Ordinance, and other relevant Ordinances and policies.”
The BDO report concludes by noting that a lack of documentary evidence left the firm unable to substantiate the “majority” of the allegations made.
“BDO’s view is that a majority of the decisions investigated were made within the boundaries of the VCP’s Ordinance. However when critically analysed many of the decisions taken do not appear to make commercial sense,” the report reads.
The firm recommended further investigation.
The University has appointed a commission of senior leaders from across the region to lead a review and implement BDO’s findings and recommendations. The Commission will be chaired by Samoa’s Deputy Prime Minister, Fiame Naomi Mata’afa and include the Prime Minister of the Cook Islands, Henry Puna, and the Attorney General of Fiji, Hon Aiyaz Sayed- Khaiyum.
The U.S.P. operates campuses in a dozen countries across the region, including its Alafua Campus.
Australia contributed US$13 million to the USP in 2017, New Zealand $3.5 million the European Union $1.5 million, Japan $2.3 million and other partners $2 million.
New Zealand’s Foreign Minister, Vaovasamanaia Winston Peters, said he would be seeking an explanation about the alleged mismanagement.