The Tribune

By RASHAD ROLLE

Tribune Staff Reporter

rrolle@tribunemedia.net

EFFORTS to improve how the government manages its affairs gained a boost yesterday with the launch of the Public Financial Management & Performance Monitoring Reform Project, an ambitious project funded by a $33m loan from the Inter-American Development Bank that aims to transform a sector often resistant to change.

Deputy Prime Minister and Finance Minister K Peter Turnquest, anticipating some resistance within the civil service, said the IDB project will affect public service workers the most.

“This project is one which will impact your usual processes and your day-to-day activities,” he said. “It will create new institutions, new rules and new routines. It will also create new responsibilities. However, it will also institute improved clarity upon processes and procedures and create a renewed sense of ownership in your work as you will see the fruits of your labour as more projects deliver results.

“This project in all its elements requires a strong change mindset.”

“This is not easy work and those of you who are in the public sector know that change does not come easy and there is tremendous resistance whenever you talk about moving my cheese.”

Parliament approved the IDB loan for Public Financial Management (PFM) in February 2016.

Yesterday’s launch of the project could give Moody’s some insight into the government’s fiscal consolidation plans, though Mr Turnquest emphasised that the project is for Bahamians, not international credit rating agencies.

“We are not necessarily focused on managing for the rating agencies, but for the Bahamian people,” he said. “Through these efforts, intense review of expenditures, enhancing and shoring revenue collection tools, we could provide growth in government revenue collection and reduce costs of doing business.”

Among the benefits of the project, The Bahamas could save $13.1m a year through public procurement improvements, IDB country representative Maria Florencia Attademo Hirt said at the Hilton Hotel where the project was launched.

The public procurement process has been so decentralised, different government ministries have paid different prices for the same product, IDB statistics have found; and the US, in its annual country reports, has repeatedly criticised the system as opaque and susceptible to corruption.

“You’ve seen over the last couple of weeks the overspending that has occurred because of the lack of transparency in the procurement process,” Mr Turnquest said, adding a new e-tender service and supplier registration system will be introduced.

Additionally, the project aims to create an autonomous Department of Statistics that is better resourced and capable of providing “timely economic and fiscal data,” Mr Turnquest said.

The project’s largest component will be its strengthening of the public financial management system, a process that will involve transitioning to accrual based accounting.

This would provide more comprehensive and accurate information about the country’s financial position and, Mr Turnquest said, prevent new administrations from entering into office and discovering new bills piling up from throughout the public sector.

Eugenia Cartwright, Bahamas treasurer and member of the PFM’s steering committee, said it should not be difficult getting government departments to apply some accrual accounting principles. In 1995, she said, a system was established allowing departments to account for revenue and expenses before cash is received or paid.

Though all departments are linked to this system and can put financial data through it, she said: “The government has a tendency to go out and commit without putting (commitments) into the financial system.”

“If you go and negotiate a contract and you didn’t put it in the system, that still becomes an obligation to the government,” she said. “It will take a mindset change to make sure people are utilising the system fully.”

The most challenging part of transitioning to accrual based accounting will be accounting for the assets of the country, Ms Cartwright said.

“Bringing those on the books is going to be a tremendous amount of work and cost in terms of assessing them and determining where and what they are.”

The accounting system would prevent administrations from transferring assets such as land without revealing the financial implications of such moves.

Ms Cartwright said it will take about five years to complete the transfer to accrual based accounting.