External Consultant Hired to Lead Review of
College of the North Atlantic Overpayments

The Provincial Government has selected an external consultant to oversee a review of overpayments made by College of the North Atlantic to some employees of the Qatar campus. Chartered Accountant Gerry Shortall has been contracted to begin the work immediately. The Honourable Darin King, Minister of Education, made the announcement today and released the scope of work for the contract.

"I am pleased to report that we have selected Mr. Shortall for this project," said Minister King. "He brings extensive professional expertise in public accounting, and has significant direct experience in governance and auditing for public institutions in Newfoundland and Labrador. I am confident that his oversight role in this review will lead to a stronger financial system for College of the North Atlantic."

The consultant will provide professional advice to the Department of Education regarding the work to be undertaken by the Department of Finance's Internal Audit Division. In this capacity, he will supervise the development of the audit work plan, review the results of the audit and make recommendations to the Provincial Government.

The division is conducting an audit that will include a review of the contracts due for renewal to assess whether salary calculations are in accordance with the comprehensive agreement with the State of Qatar; an identification of how the errors occurred; and verification of the overpayment calculations.

"The college is committed to offering Mr. Shortall and the Provincial Government the supports necessary to complete this review process," said Terry Styles, Chair of College of the North Atlantic's Board of Governors. "We welcome this review. It will validate the actions we have taken to correct the overpayment errors and help us move forward with this issue."

Mr. Shortall has over 37 years of public accounting experience and served as a senior audit partner in Ernst & Young LLP in both Newfoundland and Toronto, Ontario. He has also served on the board of directors with Nalcor Energy; Aastra Technologies Limited, based in Toronto, Ontario; the former Newfoundland and Labrador Hydro; as well as Nalcor Oil & Gas Corporation and Bull Arm Site Corporation. The consultant's work is expected to be completed by July 31, 2010.

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BACKGROUNDER
Scope of Work

The consultant shall complete the work and/or perform the following services:

1. To provide advice to the Department of Education regarding the scope of work to
be undertaken by the Department of Finance — Internal Audit Division regarding certain overpayments of salary to employees of the College of the North Atlantic (Qatar Campus);

Department of Finance Audit Scope would consist of but not limited to the following:

Objective 1:
Review current contracts due for renewal to assess whether current salary calculations are in accordance with the Comprehensive Agreement.

Objective 2:
Review of process for determination of how overpayments occurred.

Objective 3:
Perform verification on overpayment calculations (salaries, benefits and management fees) as prepared by CNA

2. Provide advice to ensure the investigation is carried out to the extent necessary to provide assurance on the results.

3. To review the report of the Department of Finance — Internal Audit Division and to provide advice to the Department of Education concerning the report and its recommendations.

4. The consultant will provide a final report on the results of the investigation as expeditiously as possible. The consultant will make himself available on a reasonable basis to discuss the report with government, if requested.

2010 05 20                                                2:55 p.m.