The highly-anticipated National Insurance Board (NIB) report is now being revealed by The Nassau Guardian.
The report is actually split into two -- one folder addressing in great detail allegations made against (now suspended) NIB Director Algernon Cargill in a November 8, 2012 letter sent to Minister of Labour and National Insurance Shane Gibson by (now former) NIB Chairman Gregory Moss.
The letter advised that the board had voted to terminate Cargill and it outlined a series of damning allegations.
Before determining whether to follow through on the board's decision, the government hired Grant Thornton (chartered accountants) to complete a forensic review and present findings.
The report that we address in today's paper deals with the auditors' findings relating to those allegations made against Cargill, which he has vehemently denied in legal documents filed by his attorneys last November.
The full report (or reports) will be in the public domain once they are tabled in the House of Assembly.
In our articles this week, we will highlight some of the key findings.
Minister Gibson has previously told reporters he found the report "shocking".
We make no judgment on this matter one way or the other and only seek to present the findings of the auditors whose services were paid for by tax dollars.
Taxpayers of course have the right to know how their money was spent, and the general state of their cherished social security agency.
BONUSES
As we reported on our front page today, the auditors concluded that there was no evidence that the former minister responsible for NIB (Hubert Ingraham) approved the bonuses received by Cargill between January 2010 and May 2012.
A legal opinion from Thomas Evans, QC, determined that the NIB Act requires that overbased increases in salary and bonuses for the director and other members of the executive management get the approval of the minister.
Executive bonuses totaling $723,333 were paid during the period January 2010 through May 2012, according to the NIB report.
Executive bonuses in 2010 were in the range of 15 to 71.8 percent of the base salaries of executives.
Cargill received a 71.8 percent bonus on his 2010 base salary of $145,600, the NIB report said.
"It is interesting to note that in 2007, Mr. Lennox McCartney, former NIB director, recommended that bonuses should be 10 percent of salary," the report said.
The legal opinion attached to the report said, "...Nothing has been produced for our inspection to show that the minister had approved any such action (bonuses for Cargill and other executives).
"In these circumstances it is our opinion that such actions were ultra vires both the board (of NIB) and the human resources sub-committee and consequently are void and of no effect."
Grant Thornton requested the legal opinion from Evans to determine whether the authorization and payment of executive salaries and bonuses without the knowledge of the Human Resources Committee, the board of directors and the minister, were in accordance with the rules and regulations of the NIB Act.
Evans also said specific bonuses and salaries paid to executive management personnel, if made without the knowledge of the board of directors or the members of the human resources sub-committee and without the approval of the minister would also be void.
"There is, however, a caveat which arises out of the fact that the board of directors approved the budget that included the salary increases in question," the legal opinion stated.
"It is immaterial that neither [then NIB Chairman Patrick Ward] nor Mr. Cargill nor the human resources V.P. specifically brought these to the attention of the Board since directors owe a duty to the corporation to exercise fair and reasonable diligence in discharging their duties and to act honestly.
"It was therefore incumbent on the directors to ensure that they had all of the details of the budget that they were being asked to approve and not to approve the same unless they were able to justify the same.
"It was their business to ask questions until they were satisfied that they knew fully what was contained in the budget. It may not be therefore open to the directors to now complain of not being told of the salary increase component of the budget."
The auditors devoted 66 pages of their nearly 300-page report to the issue of bonuses and salaries.
Much of it includes board minutes from meetings over several years.
There is no evidence to suggest that HR Committee members, Rev. Etienne Bowleg or Debbie Ferguson knew the details of the executive bonuses paid, the report said.
The new board in 2012 suspended the executive bonus program.
The report said that in an interview with the auditors, Ward stated that management negotiated contracts so that they would get bonuses that would be linked to the bonuses the management union got, with no reference to performance measures or operation/financial targets.
He stated that historically the HR executive review committee handled HR matters for all senior management personnel.
They never openly discussed salaries and bonuses at the board level because of the confidentiality issue, especially with fellow board members who happen to be presidents of three prominent unions.
The board approved the charter (that is, the Human Resources Committee Terms of Reference), which gave the committee full responsibility and authority to deal with matters relating to management's salaries and bonuses, which should be in the board minutes.
Every year as a part of the budgetary process the Board of Directors would be aware of the overall parameters that would be set for the allocation of budgets.
They would not be aware of the individualization or specifics of the annual budget (say for salaries and bonuses) but would be aware of the pool (that is, the total amount).
Grant Thornton determined that the Human Resources Committee and full board should have received specifics and knowledge of the executive bonuses "for proper discussion and decision".
The Nassau Guardian previously reported that eight NIB executives and one person on contract collectively received bonuses of $723,333 between January 2010 and May 2012, with Cargill taking home $194,791.66 in bonuses during that period, according to information on NIB's files.
Grant Thornton also said it has seen no correspondence or approval from the minister with responsibility for NIB (Prime Minister Ingraham) to increase Cargill's base salary from $140,000 (per his initial contract dated October 20, 2008) to $163,072.
It said Cargill's base salary was eventually increased to $175,000.
Cargill's employment as NIB director over Mr. Darron Cash and Anthony Curtis, based on documents received by Grant Thornton, appear not to have been reviewed or approved by the Human Resources Committee, the report also said.
CREDIT CARD ISSUE
In his November letter to Minister Gibson, Moss also alleged that Cargill used his corporate credit card to incur in excess of $240,000 in charges over a period of three years for various charges which should otherwise have been subject to the normal purchases effected through the Purchasing Department of NIB.
Grant Thornton concluded that NIB has no documented credit card policy and the Chief Internal Auditor Whitney Patton stated in an interview with Grant Thornton dated November 29, 2012 that he was not aware that a credit card was issued to Cargill.
Purchase of supplies, electronic devices such as cell phones, iPads, iPhones, camera, other IT hardware could have been subjected to the normal purchasing oversight handled by the Purchasing Department instead of at the discretion of Cargill, the report said.
There were two credit cards issued during the year 2009 through 2012. They were issued only to Cargill in January 2009 and Chairman Gregory Moss in July 2012, respectively. Both credit cards had a credit limit of $25,000, according to Grant Thornton.
"We inquired with [Mrs. Sonia Gill, financial controller] if there was a documented authorization to issue credit cards to Mr. Algernon Cargill and Chairman Moss, the report said.
"According to Mrs. Gill, there was no documented authorization to approve the issuance of credit cards to both," it said.
"However, Mrs. Gill provided us with documentation on how the credit card of Mr. Moss was processed and collected from Royal Bank of Canada (RBC). We were not provided with documentation on how the credit card of Mr. Algernon Cargill was processed and collected, as according to Mrs. Gill, she is yet to locate them."
Amid controversy surrounding NIB, Minister Gibson instructed the Board to cancel the credit cards in January.
Total credit card charges from January 1, 2009 through October 31, 2012 totaled $273,541.16 of which $272,493.01 was reported as business expenses and $1,048.15 was reported as personal, the report said.
It said according to Gill, the personal charge of $1,048.15 was recorded as a receivable from an NIB official.
"Based on our review of the expense summary of Mr. Algernon Cargill and its attached supporting documents and correspondences, we found out that the total charges of $272,493.01 were not solely incurred by him but were also incurred by other NIB employees through use of his credit card," Grant Thornton said.
"Also, we were not able to view 24 percent or $65,887.35 of the total credit card charges as the supporting documents were not on the files provided to us."
Grant Thornton also said, "Based on our review of all credit card purchases, we noted that all purchases were not in compliance with the policy on Delegated Authority to Spend Budget Allocations."
Cargill used his credit card for meals in addition to his travel and subsistence allowances, according to the report.
The auditors concluded that NIB's policy on Delegated Authority to Spend Budget Allocations is inadequate as it did not have a policy specific for executive managers and directors in terms of approval of their own requisition of goods or services, replenishment or credit card charges, reimbursement of out-of-pocket expenses and other payments.
Cargill has also denied the allegation that he improperly used his credit card.
In his court-filed affidavit, he said, "On the instructions of Mr. Patrick Davis and Mr. Gregory Moss, NIB's Internal Audit Department, led by Whitney Patton, CPA, and Nakeisha Simms, CPA, reviewed every transaction performed on the credit card from January 2009 to June 2012.
"In their summary of findings, they stated that 'Discussions with Mr. Patrick Ward, former chairman NIB, revealed that approval was given to the director to obtain and use a credit card for the purpose of business development and conduct of Board business, as well as to execute purchases where credit card payment is required; to mitigate against the inherent risk present when in possession of cash; and for use as and when required as is customary in today's business environment'."
Cargill also said, "The Internal Audit Department has completed their review and has not found any misuse of the NIB corporate credit card by me or any NIB executive."
Minister Shane Gibson has said the report from Grant Thornton will be tabled after Cargill gets an opportunity to respond to the findings.
We hope that this happens sooner, rather than later, as the public deserves full access to it, and at the end of the day needs to have confidence in the current and future viability of its social security agency.
We also hope that the NIB saga will improve how that entity as well as how other government departments and corporations are managed.

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