Cricket West Indies (CWI) President, Ricky Skerritt yesterday denied that there had been any cover-up of a damning audit report of the board under his predecessor which raised concerns about money-laundering and other transgressions and said a series of recommendations are already being implemented.
In a statement following the publication in Stabroek News of some of the major findings of the audit by Pannell Kerr Foster (PKF), Skerritt said that CWI has since been in the process of implementing recommendations as swiftly as it could and several of these have already been fully incorporated into the organisation’s day-to-day operations, including:
● reinforcing the President’s role as Non-Executive Chairman of the Board, with responsibility for strategic policy and governance, while empowering and supporting the CEO and his management team with full responsibility for all operational aspects of the organization;
● realigning the organisation’s leadership, reporting, and functional structure, to enhance accountability and reestablish clear lines of authority and responsibility;
● strengthening internal controls and ensuring timely reconciliation and reporting of all accounts; and
● modifying fundamental management practices to ensure transparency, and best practices.
● discontinuing the operations of the Executive Committee of The Board
● reporting to the Board on a timely basis, the accurate financial situation.
He said that upon assuming office in April 2019 in keeping with the theme of “Cricket First”, and promises of governance reform and financial transparency, he and his Vice President, Kishore Swallow (with the support of the Directors of CWI) “immediately undertook” the process of seeking to systematically address and rectify several areas across the organization which they believed were cause for concern.
He said that one of the first three of these actions was the review of the CWI team selection system, which was successfully undertaken by a Task Force led by the Vice President, which began in May, over a three-month period. Simultaneously, PKF was engaged for a six-month period to conduct a business situation assessment and review of the organisation’s financial management systems, and to offer recommendations for addressing any shortcomings.
Additionally, and not long after, Skerritt said that another Task Force was established, led by Don Wehby of Jamaica. The mandate of that Task Force was to review the governance system and practices of the organization, and to make recommendations to tackle any needed reforms. The final Wehby governance reform report is expected to come to hand soon, Skerritt added.
In carrying out its assessments, Skerritt said that PKF uncovered “some illustrations of questionable executive standards and practices”. He added that it verified and emphasized the need for drastic operational reorganization and realignment, with an urgent need for improved risk assessment and cash flow management. The PKF consultants, he said, presented their report in person to the CWI Board of Directors in December; and their 28 recommendations were unanimously adopted. He said that publishing the document was never considered by the Board, as the report is an internal report.
He said that since the adoption of the PKF report six months ago, numerous references to it have been made in media statements and interviews by the CWI CEO, Vice President, and myself.
“I can confidently assure you that at no time was there any decision taken by the Board or anyone associated with CWI to `hide’, `conceal’, `withhold’ or `hold-back’ the PKF report. However, in light of an apparent recent access to some of its contents by the media, the CWI Board will now have to contemplate whether it may be appropriate at this time for the report to be shared publicly”, Skerritt said.
He added: “I want to assure all stakeholders of West Indies cricket that whether the PKF report is made public or not, CWI will not be distracted from correcting, and learning from, any identifiable missteps or shortcomings of the past. I am determined as the President of this Board, to ensure that CWI conducts its business with integrity, accountability and transparency and without fear or favor, affection or ill-will”.
Skerritt’s statement yesterday did not say how CWI had pursued or if it intended to do so, concerns that had been raised about possible money laundering under the previous administration. In the report, seen by Stabroek News, PKF said several matters had caused it consternation in relation to whether a former CWI employee was acting in the best interest of CWI.
The PKF report said that CWI received US$134,000 from a betting company via Switzerland on or about the 8th of August 2018 on behalf of the Dominica Cricket Association (DCA) from a third party.
“It appears to be an offshore corporation. It is unclear why the funds did not go directly to DCA. This money was paid over to DCA in three tranches – US$104,100 on 16th November 2018, US$15,700 on 2nd August 2019, and US$14,400 on 21st September 2019”, the report said.
It listed the following underlying concerns about the transaction: What due diligence was performed to ensure that the source of these funds was legitimate and the funds “clean” from an anti-money laundering compliance perspective? What measures were taken to minimize the risk that CWI may have (been touched) by money laundering?
It noted that the auditors were unable to find an executed agreement/bona fides for the transactions, and while the funds were supposedly earmarked for “cricket development” in Dominica, there is no evidence that CWI obtained confirmation from the DCA that the funds were used as directed.
Further, the PKF report said that in 2018, CWI entered into a five-year contract for a series of exhibition matches in Miami to coincide with the visit by an Indian team. The PKF report said “We understand that ICC (International Cricket Council) approved the venue and that this contract necessitated an upfront ICC sanctioning fee of US$200,000 with respect to the particular venue”. The report said that this initiative was championed by the former CWI employee but that PKF has not seen any substantive analysis tabled before the board indicating the potential benefits and risks for such an “untested financial commitment over a protracted term”.
The PKF report also on homed in on a loan from Digicel to a St Lucian international business company associated with the former CWI employee. The PKF report said that the loan of US$125,000 was made by CWI’s main sponsor Digicel to Resiliere Inc, where the beneficial owner was believed to be the former CWI employee. The loan was made nine months after the reputed beneficial owner was employed by CWI.
PKF said: “At a very minimum, this transaction appears to be a real or perceived conflict of interest situation that may be determined to be (a) breach of (the former employee’s) fiduciary duties”. The PKF report said that the core issues are whether the board was proactively aware of and sanctioned the transaction, the rationale of the board if it did give approval and any legal exposure that CWI might attract from the transaction. Underlining that CWI has been in a cash flow crisis on a recurring basis, the PKF report has also focused on poor governance by the board while recommending a series of changes to enable accountability and transparency.
The PKF report said that there are “fundamental problems” in the core accounting system so that information needed to effectively run CWI takes too long to retrieve to be of use in decision-making.
