The Tribune

By AVA TURNQUEST

Tribune Staff Reporter

aturnquest@tribunemedia.net

UNCERTAINTY over the rift between the Public Hospitals Authority Board and its Managing Director looms in the aftermath of a leaked report on alleged policy breaches and organisational deficiencies.

PHA officials remain tightlipped on whether or not there has been any consideration given to recommendations made by accounting firm HLB Galanis & Co on the Authority’s human resources and payroll departments. Several pages of the HLB report, dated February 10, 2014 and addressed to PHA Chairman Senator Frank Smith, were leaked online last week.

Among other deficiencies outlined in the report include “inconsistencies in the requirements for employment, discrepancies in salary adjustments and title changes, employees were on probation for longer than the required period and there were instances where employees were promoted during the period in contravention to established policies”.

In a letter obtained by The Tribune, dated October 22, 2012, Mr Smith directed Herbert Brown, the Managing Director, to ensure the immediate promotion and increments of two individuals, with salaries to be paid with effect from July 1, 2012.

The letter, which begins “I have been asked to direct you”, authorises Mr Brown to promote an Executive Secretary to the position of Manager I; and an Administrative Officer II to the position of Senior Manager-Administration. According to the Authority’s salary scale, both promotions skip over more than three posts and represent just over $9,000 increase in earnings.

The Tribune could not confirm whether the promotions were executed.

HLB’s report accused Mr Brown of several policy breaches in its critical assessment of the regulatory body’s “lax system”. The report accuses Mr Brown of approving “gratuity payments unilaterally in contravention of policy”. However, documents obtained by The Tribune indicate that changes to gratuity policy received the approval of the PHA board in December 2011 under the chairmanship of Tanya McCartney.

HLB’s assessment scope on established policies and procedures of the administrative and financial controls in the human resources and payroll departments, included the period of July 1, 2012 to June 30, 2013.

According to the report, HLB’s team did not conduct a complete evaluation of the operating effectiveness of PHA’s internal controls. It added that its engagement was not designed, and could not be relied upon, to disclose errors, fraud or illegal acts that might exist.

The firm was hired to conduct a review of the Authority’s operating entities and routines at its seven facilities; conduct a review of the employees engaged by the authority such as contractual employees, consultants, month-to-month employees, permanent and pensionable employees; determine whether the Authority is in compliance with guidelines and policies, with focus on the human resources and payroll functions, including an assessment of overtime and promotions of persons reviewed through that period.

The report concluded that it could not be determined whether or not the authority was receiving value for its money, but added that it was “strongly believed that in many cases it is not”. Further it said “we believe that the ultimate responsibility for the deficiencies must lie with the PHA’s leadership.”

Mr Brown was re-instated as head of the PHA – after he had been placed on two weeks administrative leave pending a Board investigation – by order of the Supreme Court in January.

Senior Justice Jon Isaacs ordered that Mr Brown had permission to submit his application and that the decision to place him on unpaid leave was “unlawful” and beyond the powers of the Public Hospitals Authority Act.

The judge further issued an injunction “restraining the chairman and the Board of Directors of the PHA” from placing Mr Brown on leave again, pending the determination of the judicial review.

According to Tribune Business, the Board battle cost the Bahamian people several hundred thousand dollars as it put on hold a $48.3 million bond issue for more than two months.

Sources familiar with the situation told Tribune Business that the PHA’s failure to take the money, and apply it to the purposes for which it was raised, had resulted in the Authority incurring unanticipated interest payment costs.