Minnis: There may be good explanation for NIB bonuses
Guardian Staff Reporter
Published: May 08, 2013
Although auditors examining the affairs of the National Insurance Board (NIB) found that bonuses appear to have been improperly paid to Director Algernon Cargill and other executives, Opposition Leader Dr. Hubert Minnis suggested yesterday that the executives may have been awarded for the good management of NIB.
As previously reported, 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.
The NIB report, completed by Grant Thornton, found no evidence that the bonuses and salaries paid to executive management personnel were approved by the minister responsible who was former Prime Minister Hubert Ingraham.
Minnis said he had not yet read the report, but he said there may very well be an explanation as to why the bonuses were paid.
"Maybe they decided that this is how it's done in the private sector where you receive bonuses based on the amount of revenue that you turn," said Minnis, who was a guest on ‘Darold Miller Live’ on Guardian Radio.
"If you follow NIB, I can say that since Cargill [went] there, NIB’s revenue increased dramatically.... Since the revenue stream has gone up and the collection has improved, it shows that he was a good manager.
"I don't know what was the thinking of the board, chairman, or the individuals involved but usually there is an incentive.
“Those incentives, I agree that they appear large, but I don't know what the circumstances were. But they may have been weighing that against the revenue stream that had increased.
"...Sometimes one must weigh the pros and the cons. Is it good business sense to give somebody a bonus knowing that with their input you have an increase of $10 million in revenue to our company, or if you don't give and you find yourself in a situation where rather than having an increase of $10 million, you have a decrease of $5 million?”
Cargill is widely credited with effecting significant operational improvements at NIB. He took a hardline approach to delinquent businesses and was able to significantly improve NIB collections.
Under his leadership, the National Drug Plan and the unemployment benefit program were both established.
In a series of reports this week, The Nassau Guardian revealed some of the findings of the long awaiting NIB reports.
Accountants looking into NIB’s affairs also highlighted reported irregularities in the award of certain NIB contracts for various projects.
The report said that Kenuth’s Electric was NIB’s preferred sole contractor that was engaged for most of the electrical repairs and maintenance for all NIB buildings in Nassau during the years 2008 to 2012.
“There was a lack of tendering on a number of projects/contracts including the project performed by Kenuth’s Electric at the Ministry of Tourism where it would have been prudent to control costs and enhance accountability by sending the project to tender,” the report said.
Minnis said he couldn't respond specifically to that finding. However, he did comment on how things usually work once a contractor is selected.
"Under ordinary circumstances, once a contract is issued to a particular contractor, he determines who his subcontractors are," Minnis said.
"In other words, he subcontracts the plumber, he subcontracts the electricians, he subcontracts...the landscaper.
"My understanding is that the contracts would have gone out to bid. If the contract goes out to bid, then the contractor has the right to select who he or she wants as a subcontractor for different entities."
Last week, Minnis said he believed that the government planned to use the report as ammunition against the former administration, but he believes the report reflects that they were on “the right track”.
“I think the report did not bring forth the follies that they wanted,” he said.
When asked if the recent revelations have caused him to change his position, Minnis said he will make a determination when he gets a copy of the report.
"The newspaper is at a better advantage than I am," he said, referring to The Nassau Guardian.
“They have seen the report; therefore, I would not want to make a comment without seeing the report properly.
“Newspapers can leave out one sentence that would change the whole [context] of the report.”