The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Auditor General has urged the Port Department to assess alternative options for its tug boat fleet, branding the over $600,000 spent on repairs as “exorbitant” and not necessarily providing taxpayers with ‘value for money’.

Terrance Bastian and his staff, in their examination of the Port Department’s accounts for the two-year period to end-June 2016, suggested that it either purchase new vessels or outsource tug boat services to the private sector.

They also pointed out that one of the boats, the Snapper, had been out of service for a six-month period.

“During the period under review, it was noted that in excess of $600,000 was spent to repair the Amber Jack and the Snapper tug boats,” the Auditor General’s report said.

“This is rather exorbitant - to continue to make repairs to the tug boats. Further, we have been advised that the Snapper has been inoperable for the past six months.”

The Port Department’s tug boats provide vital services in Nassau harbour, especially when it comes to guiding cruise vessels safely in and out of Prince George’s Dock.

Alive to the financial consequences, the Auditor General’s report said: “Exorbitant spending on repairs of the aged tug boats could result in the Department overspending.

“Therefore, we recommend that management seriously consider the following options: The feasibility of continuing to repair the tug boats; the option of outsourcing the tug boats; or the purchasing of new tug boats.”

Tribune Business exclusively revealed last week how the Port Department has failed to collect almost $5 million in due revenues, the Auditor General revealing that some of the Bahamas’ wealthiest investors - Atlantis and the cruise lines - are among the biggest debtors.

The report also highlights gaps in the “audit trail” and reporting procedures, which undermine accountability and expose the Port Department to “possible misappropriation of funds and/or fraudulent activities”.

The Port Department itself even confessed to the Auditor General its suspicions that funds were being stolen, and criminal activity occurring. However, the latter was unable to verify this because of the agency’s poor systems and record-keeping.

“During our review, we were informed of misappropriation of funds,” the Auditor General’s report said.

“However, they were unable to supply documentation of the same. Hence, due to inadequate recordkeeping, we were unable to substantiate their claims.”

The report also highlighted how the Customs Department was responsible for billing and collecting cruise ship pierage fees, yet did not produce revenue reports to the Port Department.

“We recommend that the Customs Department generate and forward timely revenue reports to the Port Department to ensure accountability and transparency of government revenue, and to facilitate a clear audit trail,” it said.

The Auditor General’s report, in particular, suggested that breakdowns in financial reporting were occurring between the Port Department’s Nassau head office and the Family Islands, creating gaps that could be exploited for fraud and other financial abuses.

Cat Island, Long Island, San Salvador, the Berry Islands and Inagua are just some of the islands where the Port Department has no presence, leaving it reliant on the island administrators to collect due revenue.

“We noted that in many instances, the revenue reports (whether produced monthly, quarterly, bi-annually or annually) were not submitted by the Family Island administrators,” the Auditor General’s report said.

“Further, we were unable to determine the amounts of revenue collected on the Family Islands, or the amount outstanding.”

And, while the Port Department had revenue collecting offices on the larger Family Islands, such as Abaco, Grand Bahama, Eleuthera, Exuma and north Andros, monies were still being taken to the local administrator for deposit to the Consolidated Fund.

“Freeport and Abaco are the only offices that generate monthly revenue reports for onward transmission to the Port Department’s head office in Nassau,” the Auditor General’s report said.

“The last revenue report from Freeport was May 2016, which amounted to $7,750, and Abaco was January 2016, and amounted to $75,968..

“Bimini has a port office. However, no revenue is collected. We were informed by management that revenue is not collected due to the lack of trained staff.”

Calling for the Port Department to ensure it received monthly revenue reports from the Family Islands, and that officers were trained, the Auditor General also demanded more accountability from Family Island administrators.

“During our review of boat registrations, we were informed that there is inadequate communication between personnel responsible for collecting revenue for boat registration in Nassau and the staff with similar responsibility on the Family Islands,” the Auditor General’s report added.

“This lack of internal controls enables the possibility of malfeasance and lack of accountability.... We recommend that a supervisor be engaged with the responsibility for the Family Island port offices to ensure that port officers are adequately trained for their job responsibilities and writing up revenue reports.”

Other concerns included a supervisor’s fear, expressed to the Auditor General’s team, about “the lack of adequate security personnel to cover the Prince George Wharf, ferry boats and Paradise Island”.

This could have major ramifications for the cruise tourism business and the Bahamas’ international standing, especially given that all nations are supposed to be in compliance with the International Ship and Port Facility Security (ISPS) Code, which was introduced in the wake of the 9/11 terror attacks.

The Auditor General’s report also noted the Port Department’s desires to be upgraded to an ‘Authority’ so it could cope with the demands imposed by a “dynamic maritime industry”.

Other goals were for the Department to become computerised via one central database, and to increase its fee structure - the latter of which has already been approved by Cabinet.

“We were informed by management that they are in possession of approval from Cabinet to increase their fees,” the Auditor General’s report said.

“However, they were advised that they must make the necessary update to the docks and ports before implementing the fee increases.”

The Auditor General also noted that the Port Department had outstanding electricity and water bills, respectively, of $232,548 and $140,744, that were owed to Bahamas Power & Light (BPL) and the Water & Sewerage Corporation.

It warned that monthly rental allowances of $1,800 and $3,000, paid to two employees on Abaco and Eleuthera, were “exorbitant” - especially as no ceiling had been set for such allowances.

And, as at end-June 2016, Port Department employees were owed a collective $37,340 in outstanding overtime payments, which were due for the period March-May 2016.