The Finance Committee learned Monday the auditor general has referred the matter of unsubstantiated financial transactions involving former University College of the Cayman Islands President Hassan Syed to the Royal Cayman Islands Police Financial Crimes Unit.
UCCI Chairman Conor O’Dea testified before the Finance Committee Monday about the sequence of events leading to last week’s revelation that account irregularities had been found at the university during a routine annual audit.
Mr. O’Dea, who became chairman of the UCCI Board of Governors the year after Mr. Syed became president, said he was first made aware there was an issue with the UCCI accounts on 5 May.
‘The auditor general, I believe at the suggestion of the governor, met with me to brief me with his concerns about some unsubstantiated financial transactions,’ he said.
At the time, Mr. Syed had already left the island, having told the UCCI Board of Governors he needed medical treatment.
During that meeting, Mr. O’Dea said Auditor General Dan Duguay told him the audit office had discovered some financial transactions that caused them concern. When the audit office asked for substantiating documentation, they were told it would be forthcoming, but it never came, Mr. O’Dea said he was told. The audit office had therefore labelled the financial transactions unsubstantiated.
Mr. O’Dea said he contacted Mr. Syed by telephone to ask about the unsubstantiated financial transactions.
‘He said they were transactions he would support and provide evidence for,’ Mr. O’Dea said, adding that Mr. Syed expressed the desire to clear his name.
‘Subsequent to our discussion, he tendered his resignation for medical reasons.’
Mr. O’Dea said he decided to do some due diligence on the matter himself and spent some time with the UCCI provost and financial controller looking into the unsubstantiated financial transactions.
‘I determined that some of the transactions might not be legitimate expenditures for the business of the University College of the Cayman Islands,’ he said, adding that he unsubstantiated transactions appeared limited to the office of the president.
Mr. O’Dea informed the rest of the Board of Governors that there was a concern about unsubstantiated financial expenditures on 15 May.
On 30 May, the Financial Crimes Unit contacted Mr. O’Dea to answer some questions about UCCI’s financial controls to support its investigation.
When the UCCI board met on 4 June, members agreed to issue a press release to brief the public on what was happening. Before that release could be made public, the matter came up in Finance Committee on 6 June. The press release was sent out the following day.
Mr. O’Dea said he has not yet seen the auditor general’s report or even a draft report on the matter. However, in advance of receiving that report, the board decided to engage Deloitte to conduct an independent assessment of UCCI’s financial practices, processes and internal controls. In addition, Deloitte will verify the full extent of unsubstantiated financial transactions.
‘An independent review of those expenditures was entirely appropriate,’ he said.
Deloitte started its audit on Monday morning.
Too soon for the FCU?
Mr. O’Dea said that at this point in time, the UCCI Board of Governors did not have enough information to determine if the unsubstantiated financial transactions necessitated a police investigation.
He said the Deloitte audit – which is expected to produce a report within two weeks – could very well come to the same conclusion the auditor general reached; that the matter should be referred to the Financial Crimes Unit.
However, Mr. O’Dea disagreed with the auditor general referring the matter to the FCU even before approaching the UCCI Board of Governors.
‘My personal opinion would be that the board should have been advised before the auditor general spoke to the Financial Crimes Unit,’ Mr. O’Dea said. ‘That doesn’t mean the auditor general didn’t act properly; it’s just my opinion that would have been the proper protocol.’
Opposition MLA Rolston Anglin suggested the auditor general might have acted inappropriately by taking the matter to the FCU before taking it to the university.
‘UCCI is [the audit office’s] client,’ he said. ‘[The auditor general] should have gone to the client first with any issues.’
Mr. Anglin said he intended to take the matter up with the auditor general when he came before Finance Committee to review the audit office’s budget appropriations.
Possible unlawful disclosure of information
Before Mr. O’Dea testified Monday, Minister of Education Alden McLaughlin raised the matter of how Leader of the Opposition McKeeva Bush came by the information he cited when broaching the issue in Finance Committee last Friday.
‘He used in his question information that, even to this point, I don’t know,’ Mr. McLaughlin said. ‘He used figures that [Mr. O’Dea] has still not been apprised of.’
Mr. McLaughlin said the fact Mr. Bush had such information was a matter of great concern, especially since there was a police investigation.
‘There is a real issue with what appears to be unlawful disclosure of information to Mr. Bush,’ he said.
The information Mr. Bush used in some of his questions last Friday could only come from within the UCCI Board of Governors, the university’s administration, from the auditor general’s office or from the police, Mr. McLaughlin suggested.
‘There has been a grave breach of confidentiality and unlawful disclosure of information of the college to Mr. Bush,’ he said. ‘Mr. Bush, in receiving the information, appears to have acted unlawfully in receiving the information.
Mr. McLaughlin called on Finance Committee Chairman Kenneth Jefferson to ask Mr. Bush where he obtained his information.
Mr. Bush said there was nothing in Standing Orders that allowed for Mr. Jefferson to ask him that question or to compel him to respond.
Mr. McLaughlin said he intended to pursue what he deemed the unlawful receipt and disclosure of the information outside of Finance Committee.
‘I’m not afraid of the big, bad wolf,’ Mr. Bush responded. ‘I have a duty to this country and I’m going to do my job the best I can.’
Mr. Bush said he was very concerned with the approach Mr. McLaughlin was taking because it was trying to scare off the Finance Committee from asking questions.
‘A very part of democracy has been challenged,’ he said. ‘A very part of freedom of information has been challenged. A very part of freedom of speech has been challenged.’
No PhD for Syed
During Friday’s Finance Committee meetings, Mr. Bush had inquired as to the proof that Mr. Syed had obtained his doctorate.
UCCI Acting President Brian Chapell said he would look in Mr. Syed’s file for a copy of the degree certificate and bring it to Finance Committee Monday.
On Monday, however, Mr. Chapell reported there was nothing in the file that demonstrated he had a PhD.
Former UCCI President Sam Basdeo told the Caymanian Compass Saturday Mr. Syed had informed him – after he had already been hired as a teacher at UCCI – he had successfully obtained his doctorate at the University of Victoria in British Columbia. However, Mr. Basdeo said he never saw a diploma or certificate to substantiate the claim.
The Graduate Admissions and Records Department of the University of Victoria told the Caymanian Compass Tuesday it had not awarded anyone with the exact name of Hassan Syed a doctorate degree.