The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

“Beleaguered taxpayers” will pay the price of the corruption exposed at the Department of Social Services, a well-known ‘fiscal hawk’ yesterday saying: “It’s just mind-boggling.”

Rick Lowe, an executive with the Nassau Institute think-tank, told Tribune Business that the Bahamas faced “a slow meltdown” if the “egregious acts” identified in the latest Auditor-General’s report were typical of what was happening across the Government’s multiple agencies.

“It shows the lack of accountability and the lack of transparency in public policy,” Mr Lowe told Tribune Business of the two-year audit findings on the Department of Social Services.

“Thank goodness that the Auditor-General seems to be doing what the Auditor-General is supposed to do, instead of not seeing these things, as has happened sometimes in the past.”

Terrance Bastian and his team slammed the Department of Social Services for “gross negligence” in allowing $4.237 million to be paid to suppliers without proper authorisation, exposing it to potential fraud and corruption.

A review of the Department’s accounts for the 24 months to end-June 2015 found that seven payments, ranging in size from $365,212 to $909,810, lacked the necessary sign-offs from senior executives, leading the Auditor-General to criticise management for a “lack of accountability”.

Department of Social Services employees were also accused of shredding accounting records “to conceal” corruption and wrongdoing, including a fraud involving food stamps normally issued to poor Bahamians.

The Auditor-General’s findings also indicated that the incidents of fraud uncovered by the audit may just be ‘the tip of the iceberg’ where the Department of Social Services is concerned.

The report details how the department’s executive management informed the Auditor General of an incident in August 2015, where staff members used pre-printed food stamps - intended to assist 10 low income Bahamians with maintaining a reasonable standard of living - to purchase $1,134 of groceries for themselves.

One staff member was terminated after confessing to the scam, while another two have been placed on administrative leave amid a continuing investigation.

Mr Lowe told Tribune Business that such acts cost every Bahamian money, since taxpayers were inevitably called upon to cover incidents of waste, fraud and inefficiency. And, in the case of the Department of Social Services, the poorest Bahamians - and those in need of assistance the most - had been deprived of help and funding.

“Obviously, it’s going to end up being more taxes for an already beleaguered taxpayer,” Mr Lowe said, “and if they allow these things to continue without prosecution, it’s just a slow implosion.

“It’s so sad sometimes. You just can’t say the word. It’s mind boggling. Unfortunately, so many people brush it off. We’ve had so many reports over the years, and nothing has materialised from them,” he continued.

“You hear of no prosecutions, no one forced to pay back the money they took. It’s just brushed under the rug, and people are encouraged to do more.

“If we don’t start making people think there are consequences, there will be more and more of this. They’ve got to let the law run its course and start to make people believe they need to be accountable.”

Mr Lowe also blamed the deeply-ingrained system of political patronage for encouraging and aiding wrongdoing within the public sector, given the reluctance of politicians from all parties to take action against their family, friends and political supporters.

The audit, which covered the 24 months to end-July 2015, found that the Department of Social Services was wide-open to fraud, corruption and multiple forms of financial abuse, due to an almost-total lack of internal controls and management oversight.

The Auditor-General’s report again highlights how the Bahamian people, especially taxpayers, are denied ‘value for money’ and strong public services at numerous government agencies, due to fraud, inefficiency and wasteful spending.

This, in turn, results in the Government demanding ever-increasing revenues, helping to drive initiatives such as Value-Added Tax’s (VAT) implementation.