USP scam exposed – millions paid in excess salaries, allowances, bonus etc

  • 26th June 2020
  • 2020
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Well known NZ journalist Michael Field has managed to get hold of the suppressed BDO Report which looked into claims by the suspended USP Vice Chancellor Prof Pal Ahluwalia of the financial rort at the regional university under its former vice chancellor.        

The 114 page report exposes: “Academics and staff at the University of the South Pacific in Suva have been paying themselves millions of dollars in salaries and allowances they may not have been entitled to.

“Pacific member nations of the USP, including Nauru, Samoa, Tonga and New Zealand have expressed anger at the way USP staff appear to be helping themselves to aid money intended to educate the people of the Pacific,” says Field.

Some of these beneficiaries are employees known to have “direct ties” to the Fiji First Party, says Field.

Quote: “A number of people cited in the report had direct ties to the Fiji First Party. One received a favoured position at USP without Ahluwalia’s consultation. Another went from a salary of nearly $70,000 to over $200,000 after being given an appointment without advertisement,” alleges Field.

“There are some very serious breaches noted in the appointment…,” said BDO. “It should be noted that his position titles have been changed at rapid pace without any advertisement and formal recruitment or selection process. This is very peculiar for USP renewal processes.”

Another person linked to the government was identified as breaching salary bands which BDO found to be “fiscally irresponsible” and said that it would be very difficult to deliver all these roles adequately.”

The USP scam involves millions paid in excessive allowances, inducement and bonus payments and instances were senior staff were paid well above Council approved salary bands.

$4.3m paid in inducement allowances over a three year period
• $3m over 3 years in responsibility and acting allowances
• Bonus payments of over $1.9m and instances were multiple bonuses were paid.

The BDO report, says Field, shows 13 top staff were paid substantially more via allowance manipulation than their salary band allowed.

One such beneficiary was Derreck Armstrong who earned way over his salary band for three years. He has been named acting Vice Chancellor in the current crisis.

Inducement allowances ranging from 35-60% of salary were paid to 90 employees for over 3 years while 57 received payouts in 2018. The highest amount paid was $214,200.

“We have noted cases where employees have received inducement allowances for many years, some tracing back over a decade spanning multiple contracts, promotions and pay increases,” the report pointed out.

It referred to the case of one staffer who collected a significant number of allowances, and was paid such for nearly 20 years.

Further, 24 employees received $2.1m in “responsibility allowances over a three year period and $828,806 in acting allowances.

“For example, we have noted some staff members who have benefitted from numerous Responsibility and Acting Allowances (at the same time) for long periods,” says the BDO report.

Former Vice Chancellor Rajesh Chandra was himself a beneficiary of the irregularities.

He took a four week “professional development” leave to Melbourne to write a book at the end of his employment contract when he was not entitled to leave. And received over $20,000 in professional allowance which, says BDO, should not have been paid. He was not entitled to it.

Says BDO, “Professor Chandra is effectively performing consulting work by writing a book with the intention of personal commercial gain…. We consider there is potential for profits to be generated from the sale of the book written during USP time. Arguably this is property of the USP that has not been fully considered or addressed.”

The report also notes serious irregularities in the appointment of admin staff. And cites one case of “serious irregularities” in the promotion and so-called backpays of a particular woman appointed directly by Chandra.

“The position was not advertised and the backpay she got was never discussed with her supervisor.” On Chandra’s orders, she started work with “backpay” of $63,008 and an annual salary of $77,748.

The BDO report says Chandra put his housemaid into a student’s married quarters when she already had her own quarters at the VC’s house just because he wanted her moved further away.

It is likely the names of those who benefited from the scam during former VC Rajesh Chandra’s tenure will eventually be revealed.