As part of the Auditor General’s special forensic audit on the activities of the National Housing and Community Development Trust, the Ministry of Community Services’ offices were shut down for parts of last Thursday and Friday.
The forensic audit, which was requested by the Governor earlier last week, is a result of allegations of malfeasance concerning the NHCDT’s activities since 1 September, 2004.
The NHCDT’s main function is the management of the Affordable Housing Initiative (AHI), which was the subject of much controversy during the administration of former cabinet minister Frank McField.
Auditor General Dan Duguay confirmed that members of his office ‘took control of the scene’ at the Ministry of Community Service’s office in the Government Administration Building, the NHCDT’s office at Elizabethan Square and another small office of the Ministry of Community Services at Cricket Square.
Employees staffing those offices were asked to go home for the day on Thursday, although Mr. Duguay said one office member was asked to stay at each location during the search for evidence.
‘There was always someone from the office there to observe and to direct us in terms of gathering evidence and to answer any questions we had,’ Mr. Duguay said. ‘We received excellent cooperation. Everyone cooperated fully.’
Mr. Duguay said the three offices were entered simultaneously by members of his staff.
Among the evidence taken were all of the office computers, something which is standard procedure, Mr. Duguay said.
The computers were returned on Friday with new hard drives and staff members were also allowed to return to their offices that afternoon.
Some employees at those offices complained that all of their work was on the hard drives that had been taken.
‘Government employees are encouraged to save their documents on the network L-drive,’ said Mr. Duguay. ‘Sometimes, though, work was saved on the computer hard drives. We will work with people to get copies of the stuff they need back to them.’
Mr. Duguay said he realised the procedure was upsetting to staff members of the affected offices and that they tried to be as gentle as possible.
‘We recognise this was an inconvenience, but we have procedures we had to follow,’ he said. ‘We had to maintain the scene to make sure that no evidence was misplaced or otherwise taken.’
Members of Financial Crime Unit of the Royal Cayman Islands Police attended the three offices with the Auditor General’s staff, but Mr. Duguay said they were not conducting a criminal investigation.
‘This is not a police investigation,’ he said. ‘It is solely an investigation of the Auditor General and will continue to be so until circumstances warrant something else.’
‘The police were there to advise us,’ he said. ‘I asked them there on my behalf because they are experts in collecting evidence.’
Mr. Duguay said it is important that any evidence gathered during a forensic audit be admissible in court.
The scope of the Auditor General’s investigation relates only to the NHCDT and the Ministry of Community Services and did not extend to any other ministries, Mr. Duguay said.
‘This was certainly not part of a large scheme,’ he said. ‘Unless we obtain evidence showing another ministry was involved, we have no intention of expanding the investigation to other ministries.’
The focus on the investigation is the performance history and accounts of the NHCDT since last September, which has concentrated on matter relating to Hurricane Ivan.
Many of the AHI homes were destroyed by Hurricane Ivan, and many other required repairs.
Mr. McField announced earlier this year that the severely damaged AHI site off Eastern Avenue would be redeveloped with a three-storey 72-apartment complex.
The project was put out to tender, but the Cayman Contractor’s Association objected because it said there was not enough time allowed to prepare a proper design-and-build bid.
The Contractor’s Association questioned whether a company called Staunch Limited had the inside track to receive the contract.
Staunch Limited is a company 60-per-cent owned by local businessman Reynard Moxam, and 40-per-cent owned by Norwegian-born Dag Egeberg, who currently resides in Cuba.
Both men obtained their shares in the company on 1 November, 2004.
Staunch was the only company to submit a bid by the first deadline, but because of the objections by local contractors, the NHCTD extended the deadline by four weeks.
Four companies, including Staunch, submitted bids by the second deadline, and the NHCTD was only days away from issuing a contract on 11 May, when the People’s Progressive Movement won a majority of Legislative Assembly seats in the general election.
NHCTD manager Roger Bodden told the Caymanian Compass the day after the election that the awarding of the contract was put on hold pending the installation of the new government.
Mr. Bodden was subsequently fired by Mr. McField. He claimed his termination notice was backdated to 12 May, but that he was actually fired because of his statements to the press which appeared on 13 May.
Although no contract has yet been awarded on the AHI Eastern Avenue redevelopment, it has been learned that Staunch Ltd. did receive other contracts to repair other AHI homes damaged during Hurricane Ivan.
Those contracts were not put out to tender.
A reliable source indicated that although a large percentage of the contract prices have been paid over to Staunch, the majority of work remains to be completed.
Staunch has stored materials imported for the jobs on the AHI site near Fairbanks Prison.
Mr. Duguay confirmed that his office had visited that storage site and done other field work as part of the investigation.
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