CI News believes the fund was initially classed as a loan but was later regarded as a “guarantee”.
In a letter to CISNOC this week, financial secretary Garth Henderson confirmed the debt was “now being written off under section 42 of the MFEM Act”.
Finance minister Mark Brown said government had been sympathetic to the financial position of CISNOC in relation to the funding they provided in 2011.
“CISNOC revenue from government is provided for through the Allsports funds (received via Tattslotto). This amounts to a payment of $120,000 per annum,” Brown said.
“However, the Allsports revenue most years has exceeded this amount and as a result the surplus has gone into the crown accounts rather than being passed to CISNOC.
“Since 2012, this surplus amount has exceeded $128,000 – in effect, similar to the loan amount.”
Brown said that as far as government is concerned, the money provided to CISNOC in 2011 has in effect been recovered through surplus Allsports funds being retained by government.
“Additionally, I should clarify that what the Cook Islands government provided was a guarantee, not a loan, and so the cost for this expense fell in the year it was provided (2011) and therefore there is no interest,” he said.
“This is not a technical ‘writeoff’ from government books, but the government ensured an effective recovery, in the public interest, by not passing on fully the Tattslotto revenues.”
CISNOC president Hugh Graham thanked the government for its goodwill gesture in writing off the debt.
At the CISNOC AGM on Thursday, he said the members unanimously agreed that he write a letter to thank the minister and the financial secretary for the writeoff.
“The debt has been an issue that was raised time and time again over the last six AGM under my leadership and we are thankful to the government for this writeoff,” said Graham. “It will no longer appear in our books, which makes the finance of CISNOC look more favourable.
“Although CISNOC survives on grants and funding from IOC (International Olympic Committee), as well as the ongoing commitment by our government, we still need to look at a third source of funding in order to supplement the funding from IOC and the government for the betterment of our athletes.”