The Bermuda Industrial Union (BIU) has filed audited accounts with the Registry General for the first time in almost a decade — but it is still five years behind in its financial reporting.

The union filed a general statement of income, expenditure, funds and effects covering the period from October 1999 to September 2002 on October 10 last year.

The statement gives little insight into the union's current financial state or whether it can cope with paying out the $6.8 million it is understood to owe Government following arbitration between the latter and Pro-Active, the company sacked from the new Berkeley Institute project in 2004.

The union told its members in 2004 that it might be called on to "foot the bill" for a $6.8 million surety its wholly-owned subsidiary, Union Asset Holdings Ltd. (UAH), pledged on the project, in addition to $4 million it said it pumped into the development. Arbitrators have now ruled in favour of Government and the BIU is understood to be liable for the surety; Pro-Active is seeking to appeal the outcome in court.

The BIU statement filed with the Registry General in October shows only that as of September 30, 2002, the BIU had about $10.89 million in assets, with about $2 million of that in cash and the rest divided up into buildings, land and other items.

An accountant who looked at the statement for The Royal Gazette said: "They wouldn't be able to pay $6.8 million in cash tomorrow. If it was called against them, they'd have to sell something or borrow it. That's the bottom line."

The accountant pointed out, though, that the stated assets might not reveal the full extent of the union's worth.

"This statement doesn't give enough information. From looking at these, you can't assess how the assets were valued. You also can't tell if they have any obligations or reserved cash."

It is not clear why the union is still so behind in its reporting or whether Ernst & Young, the auditors who signed off the latest statement, conducted a full audit to bring it up to date to the end of 2007. But it is believed that more comprehensive financial statements have been drawn up which may be available to union members on request.

BIU president Chris Furbert failed to respond to questions on Friday and it was not possible to contact anyone at Ernst & Young.

Meanwhile, the BIU's Credit Union — which exists to help union members save and provide them with credit at a reasonable rate of interest — is thought to be at least a year behind in its financial reporting.

Two separate sources have told this newspaper that it is currently not giving out loans to members.

The Credit Union made an illegal loan of almost $3 million to Union Asset Holdings in 2003. The Credit Union's financial statement for 2004 states: "The amount due from Union Asset Holding (sic) was repaid in full in 2004."

Under the Credit Unions Act 1982, the Credit Union is required to deliver audited statements to Bermuda Monetary Authority (BMA) no later than three months after the end of each financial year. The BMA would not answer a series of questions last week about the Credit Union or confirm when it last filed accounts but The Royal Gazette understands that it has not filed its 2006 report yet.

An attempt by this newspaper to view the Credit Union's accounts at the BMA failed on Friday. We were told nobody was available to help with our request.

BMA chief executive officer Matthew Elderfield would say only in a statement that there had been delays "in the past" with the Credit Union meeting its statutory obligation to file its audited accounts.

He added: "The Bermuda Monetary Authority is fully aware of this and has been in discussion with the Credit Union's management as part of its monitoring of the level of reporting and other obligations required of the organisation.

"The authority is bound by confidentiality provisions under the law with respect to disclosing details of that supervisory dialogue.

"However, with the agreement of the Credit Union, we can confirm that we are in close contact with management regarding this matter; we are receiving frequent and regular financial statements from the organisation; and that the organisation is functioning within its mandate."

Deputy Premier and Finance Minister Paula Cox, responding to questions from this newspaper, said it was "not customary for the Ministry of Finance to divulge details relating to regulatory interventions of supervised entities" and that it was the BMA's job to monitor the Credit Union's compliance with relevant legislation and keep the Ministry advised.

She added that it was a matter of public record that "compliance concerns" about the Credit Union in 2003 were resolved and said the Ministry of Finance understood that the Credit Union was now making progress in bringing its filing of financial statements up to date.

Graham Nesbitt, chairman of the Credit Union, did not return calls on Friday.

* Are you a member of the Credit Union who has been turned down for a loan? Or a BIU member who knows more about the union's finances and would like to share the information with the public? Call Sam Strangeways on 278-0155 or email sstrangeways@royalgazette.bm.