The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Tax Coalition co-chair has questioned whether the political will exists to improve the quality of government data, due to fears this will “shine a light” on poor spending decisions made in the past.

Gowon Bowe, responding to the findings contained in a report on the Inter-American Development Bank’s (IDB) proposed $45 million project to improve the Government’s financial management, said a “fear of accountability” among the political elite might scupper any effort to move towards evidence-based policymaking.

Mr Bowe described as “astounding”, though not surprising, the IDB report’s revelation that the Ministry of Finance was operating seven different Information Technology (IT) systems, a situation that had grave implications for the smooth co-ordination of the Government’s finances.

And he warned that quality financial reporting systems that monitored and controlled government spending were “paramount to success” when it came to the Bahamas’ fiscal reforms, the IDB report having highlighted systemic weaknesses in this key area that needed urgent attention.

“What was most pertinent and interesting in the analysis done by the IDB,” Mr Bowe told Tribune Business, “was that they questioned whether [government] decisions were being made on hard empirical evidence.

“If you’re making business and financial decisions without the benefit of statistical information, you’re not being prudent and wise, and are making decisions on emotion and gut feeling.

“We all should be demanding that decisions are not made on gut feeling and sentiment, but hard data.”

Mr Bowe, an accountant who in his ‘day job’ is a PricewaterhouseCoopers (PwC) Bahamas partner, said the IDB project report revisited this theme several times, and “also challenges the quality of data used to make decisions”.

He added that the report also questioned whether Cabinet decisions were being effectively implemented and monitored, and said it highlighted that there was little to no evaluation of whether these ultimately proved to be “wise”.

Mr Bowe referred to the New Providence Road Improvement Project as an example of government spending decisions that needed to be constantly evaluated to ensure the Bahamian taxpayer/people received ‘value for money’.

While it had attracted much controversy related to the alleged $100 million overspending, and whether it could have been better managed, Mr Bowe said the pressing issue now was to “track the useful life” of the project.

This, he explained, meant ensuring that if the infrastructure built under the New Providence Road Improvement Project had a 20-year life expectancy (no need for major maintenance during that time), then the quality and workmanship ensured this goal was met.

Describing the IDB report as “consistent” with what the Coalition for Responsible Taxation has been saying, Mr Bowe said: “Paramount to success [with fiscal reform] is having appropriate fiscal reporting systems in place so that decisions are made on statistical and empirical evidence......

“What was astounding to me, and not completely surprising, was the seven IT systems of the Ministry of Finance.”

He added: “When you think about the importance of the Ministry of Finance, they need, at worst, to have their information integrated, and at best to have it all in one enterprise resource planning system.

“At worst it should be integrated or interfaced. If it is not interfaced, are we making decisions based on statistical information or gut feeling?”

The IDB report noted that the civil service payroll was not co-ordinated with the Government’s Budget, and Mr Bowe said the Ministry’s systems had to be integrated if it was to identify potential “areas of waste” and spending inefficiencies when it came to fiscal reform.

He pointed out that the cash-based, manual system relied upon by many government departments was prone to mistakes and fraud.

While policies and procedures on government spending were in place, Mr Bowe said these had “not trickled down to the agencies, so there is no efficiency in purchasing, tendering.

“That results in a lack of economies of scale,” he added. “If they did this in a consolidated fashion, there is no telling what the savings could be.”

The IDB report said the Government’s public procurement systems were not consistent with international best practices, and failed to deliver ‘value for money’ to the taxpayer.

Mr Bowe, though, questioned whether there was the necessary ‘political will’ to base Government decision making on evidence-based policies, given the inevitable transparency and accountability this would demand.

“There may not be the political will to implement quality data and decisions,” he told Tribune Business, “as this will shine a light on previous decisions and how poor they have been.

“There’s a fear to have the spotlight on missteps, and what they’ve previously spent on projects, because of the fear of accountability in an appropriate manner.”

Suggesting that the current system helped ensure scandals and poor spending decisions faded from the public’s memory, Mr Bowe said it also handicapped the Auditor-General when it came to delivering timely reports on the Government’s finances.

The Coalition co-chair also expressed “frustration” with political leaders’ previous suggestions that such reforms, as outlined by the IDB, were only applicable for large countries and not 
“practical” for small nations such as the Bahamas.

“We must stop that excuse of being a small country or not advanced,” Mr Bowe told Tribune Business. “We live a first-world lifestyle, and must have sophisticated systems to match that lifestyle.”