PLP: CedarBridge and Saltus contract is disturbing

"The decision by the Cedarbridge Academy Board of Governors to award a financial management services contract to Saltus Grammar School is a disturbing development that merits closer public scrutiny. I am well aware of the challenges Cedarbridge faced in terms of its financial reporting and related matters and therefore recognize the urgent need to find a workable solution.

Having carefully reviewed the relevant factors, I have come to the conclusion this decision harms the interests of Cedarbridge, its stakeholders and public education more generally.  The harm can be seen in three areas.

First is the intangible and immeasurable harm caused by farming out the Controller function to Saltus. At a time when many of us are working to build public confidence in public education the CBA board sends the message that CBA needs the help of a private school to manage its financial affairs. The fact is every other public school has its financial affairs well managed through internal or public resources. A board sensitive to the importance of building public confidence would not have made such a decision.

If the board wanted lessons from the private sector they would know Ace would not contract out its accounting to XL and Cedarbridge should not be doing so to Saltus. When Bank of Bermuda and Butterfield Bank saw an opportunity to save money by working together they formed a separate company to do this.

Secondly, there is the issue of fundraising. Any fundraising undertaken by CBA will be readily known to Saltus. This knowledge can be used to the advantage to Saltus at the expense of CBA—hampering future opportunities for fundraising.

Thirdly, there is the related area of sponsorship. Any sponsorship partner secured by CBA can be used subsequently by Saltus in its own sponsorship activities. Because the pool of such funds is always limited there, again, is the potential for CBA interests to be adversely affected.

Finally, there is the area of overseas affiliations. Any relationship CBA structures with an overseas organization which has a financial component, again, will be known to Saltus and can be used by Saltus to its advantage and contrary to the interests of CBA.

To be clear, I do not believe Saltus had any of these issues in mind when they submitted their proposal in response to a publicly issued RFP process. Because the two schools share the same professional space, however, the potential for Saltus to use inside CBA knowledge to its advantage is high. This is another reason why the contract award is highly problematic and the Board should have been more sensitized to these issues.