State of the Union

President of the Bermuda Industrial Union (BIU), Chris Furbert, is mistaken when he comments to the press that the issue of the BIU not completing or forwarding its accounts to the Registrar General for almost a decade is “old news” or that it is not any business of Michael Fahy, Chairman of the One Bermuda Alliance, who has been calling attention to the situation. Actually, it is everyone’s business because the BIU plays a critical role in the community when it comes to the protection of employees; and the effect it has on the country when industrial action is taken. The membership of the BIU includes many Bermudian workers and, by extension, their families; so, if things go wrong with the BIU, then many in the community are at risk of being adversely affected. Ensuring that our businesses, organisations, and institutions demonstrate good governance, sound financial responsibility, and ethical behaviour is a huge reflection on the island’s reputation, which  must be safeguarded. Mr. Furbert might not like being questioned about this latest episode with the BIU, but it is a gravely serious matter that is not to be dismissed.

“The records show that BIU officers have not filed any accounts with the Registrar General since 2003, as required by law under the 1965 Trade Union Act. In addition, the accounts filed for the period from 1999 to 2002 were rejected for not meeting the requirements of the law. In other words, union members have not been able to see approved financial statements for the union for approximately 12 years. This is against the law. It also is just plain unacceptable.”

Michael Fahy, quoted in The Royal Gazette on June 27th 2011.

If there was a delay of months due to mitigating circumstances, then it would be reasonable to expect the Registrar General to permit a brief extension, but a decade of non-compliance is beyond appalling. Every BIU member should be concerned by this issue because it is one of governance and the financial management of their money; and they should be asking the BIU leadership questions. How can anyone reasonably know whether the organisation is being operated properly without approved, audited financial statements? What is the financial status of the BIU? Are there sufficient funds to support members if the need arises amid industrial action or other trying circumstances? What is happening with their membership contributions? And are members getting value for money, in terms of financial management, investment decisions, and management performance? It might be that the BIU is in very good financial health and that members are financially protected, but without knowing the status of the BIU accounts, members have no way of confirming this…and not knowing for certain for over a decade is shocking.

Questions also must be asked of the office of the Registrar General. Why have they allowed this to go on for so long? Why has the BIU not been held accountable for non-compliance? When organisations have problems, as indicated, the Registrar General should work with them where this can be reasonably expected; however, delays of this magnitude – the better part of a decade – are inexcusable. Further, this debacle also calls into question whether there are other organisations that the Registrar General has allowed to forgo submission of accounts for lengthy periods; and should serve to put them on notice if they are similarly delinquent.

As for the management of the BIU, where does the buck stop?

The Financial Controller of the BIU must be held accountable. Mr. Furbert bears some responsibility, as well, since this has happened on his watch. As head of the union, he should have some general knowledge about the accounts of the organisation and whether financial and reporting obligations are being met.

Members should be looking more closely at how the union is being run and take a more active role in ensuring that financial information is presented to them regularly and that they clearly understand that information. Does the BIU have Annual General Meetings that include the membership? Is financial information reviewed for the benefit of the members if there are such meetings? Are there regular board or executive meetings, keeping an eye on financial information, reporting, and regulatory obligations? What checks and balances are in place and, moving forward, will accounts be presented to the membership at regular intervals, so all are aware of the financial position of the union and, more specifically, how member contributions are being allocated, invested, or accounted?

For members who are not sure what specific queries they should be making when they do see the financial statements, here are a few basics to get you started:

  1. Is the BIU in the red or the black?  Is it losing money or making money?  Why?
  2. What is the change in its financial position since the last financial reporting period?  Has it improved or deteriorated?  Why?
  3. How much is owed to the BIU and how much does it owe to its creditors?
  4. How does what the BIU owes compare with what it is owed and what is the state of its ability to meet its loan (owed) commitments?
  5. How much in membership dues has been collected for the financial period being reviewed?
  6. How much have membership dues grown or reduced since previous reporting periods?  Why?
  7. How and where are membership dues being invested and is a satisfactory return being made?
  8. What other investment and purchasing decisions have been made by the organisation and what are the implications for such decisions in the current economic climate?

These are only a few general questions and other individuals might suggest further, helpful questions to guide members. Also, these questions should not be solely for the BIU, but should be asked by anyone of any institution when reviewing their financial statements. Certainly, more complex questions will be asked based on a person’s knowledge of Finance and accounting standards and practices. If nothing else, perhaps this dilemma with the BIU’s financial statements can serve as an opportunity to encourage Bermuda residents to take a more active approach to reviewing the finances of organisations and businesses they are involved with. It helps to bring about better governance and accountability on all fronts.

The right thing for Mr. Furbert and his team at the BIU to do is resolve the situation immediately; ensure that the membership has access to up-to-date, accurate financial information on the Union; and to reassess the management of the organisation. The BIU must be held accountable for non-compliance and the Registrar General must similarly be held accountable for lack of enforcement. It would be important to hear from the Ministry of Finance on this matter, as well, so that the public can be confident that it is being appropriately addressed.

The seriousness of the situation is compounded by the fact that the Bermuda Government released the BIU from its significant obligation concerning the Performance Bond re the highly controversial Proactive contract for the building of The Berkeley Institute Senior School a few years ago (see below). This left a bad enough taste in the mouths of many residents of Bermuda who felt the government should never have done this in the first place. Personally, I do not wish to see the downfall or failure of the BIU, but I do believe it must be held accountable for its actions and if that means failure, then that is the consequence it must face. Great lessons can be learned from failure and sometimes it is the only way that some will learn.

Incidentally, I was looking for more information online about the BIU and it appears there are scant details available other than news reports. (A website for the BIU would be a good tool for disseminating information to members and promoting the organisation in ways they best serve its members, by the way. It should be part of a much-needed modernising process for the BIU.) However, I did come across the following video clip on YouTube posted in 2009:

Here, Mr. Furbert is correct when he states that people make mistakes and that they learn from them. However, this is about, what should be, the professional management of an important organisation which demands a high degree of competence, knowledge, and skill. Major errors in judgement or questionable management performance are not befitting analogies to childlike mistakes. It makes one wonder if the BIU leadership has learned anything from their past blunders.

It is time for better governance and management. The BIU members and Bermuda deserve this much…at least.

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~ by Carol-Ann Simmons on June 28, 2011.

7 Responses to “State of the Union”

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