The Tribune

By NICO SCAVELLA

Tribune Staff Reporter

nscavella@tribunemedia.net

THE College of the Bahamas’ cancellation of a $16.1m loan from the Caribbean Development Bank will not deter the institution’s transition into a university, officials said in a statement last night.

The loan agreement was signed in December 2104 to fund specific capacity building and capital development initiatives.

According to the statement, in March COB Dr Rodney Smith met with the CDB President, Dr William Warren Smith, to discuss the terms and conditions of the sovereign loan, which allowed for waiver of pre-conditions.

“One of the pre-conditions of the loan was the submission of outstanding audited financial statements,” COB said. “The reality is, while the college worked diligently on the completion of the audits, CDB fees and interest were accumulating for the undispersed loan funds.”

“As a result of the meeting, the bank indicated their intent to maintain the pre-conditions of the loan and offered further assistance,” the statement said.

“The financially prudent response to this situation was for the college to recommend to the Ministry of Finance to cancel the loan and thereby arrest the accumulation of fees and interest. Both presidents agreed that the cancellation of this loan would not prohibit future engagement of CDB to assist in building the university.”

In September 2015, The Tribune reported exclusively how poor auditing practices at COB had prevented the institution from using the funds from the loan. This newspaper reported at the time how the college was at least four years behind in audits when the Christie administration moved to borrow the funds.

“The college remains steadfast with its transition to university status through the anticipated implementation of the Elucian Banner Data Management System this year,” COB added. “This system will assist the college to better manage its financial administration structures and facilitate the completion of its audits. The campus-wide implementation will take approximately 18 months at a projected cost of $3 million.”

Meanwhile, COB Council member Mark Humes criticised the college’s top brass for failing to appraise sitting council members of its decision to cancel the loan.

In particular, Mr Humes questioned how former COB Council Chairman Alfred Sears would know about the particulars surrounding the loan’s cancellation when he said “a good number of persons from council didn’t know about it”.

Mr Humes said he believed council members would have agreed with COB’s decision to cancel the loan agreement, but added: “I guess they may have thought that a council meeting or getting permission from other council members to make the decision wasn’t necessary.”

Mr Humes’ comments came two days after The Tribune reported that the loan had been cancelled.

After that report was published, Mr Sears told The Nassau Guardian that Dr Smith recommended to the government that it should no longer proceed with the loan agreement with the CDB.

When contacted yesterday, however, Mr Humes said he did not find out about the loan cancellation until an hour or so after a 10am council meeting on Wednesday when he read The Tribune’s story.

“I don’t know all the facts about it, but the little I do know I’d say I would agree it was best to get out of that financially,” Mr Humes said, before COB’s statement was released. “It’s been a drain on us for the past two or three years we’ve been in it. So I’m not concerned about the college getting out of it; I’m just surprised at the way we learned about it. I thought that was poor.

“I’m surprised that Alfred Sears would know this information, and I don’t know who else on council knew, but if the council was just being appraised (Wednesday) that means a good number of persons from council didn’t know about it. So that’s concerning - very concerning. And it is an issue that I have raised concerns about before, publicly.”

When asked if he knew what the situation was like regarding COB’s current audit practices, Mr Humes said: “I know they’ve been working hard to get the audits completed. I think as best I know most of the audits are done.”