The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The National Sports Authority (NSA) has pleaded with the Auditor General’s Office to “support” efforts to change its governance structure in the wake of damning audit findings.

The NSA, in its response to the auditor general’s six-and-a-half year audit of its operations since inception, argued that its bid to address all identified weaknesses would receive a major boost if all its funding was based on an “approved budget” and received directly from the Ministry of Finance.

“A further improvement in the governance structure could be achieved if all government funding for the NSA is directly from the Ministry of Finance based on an approved budget,” the NSA management’s response to the Auditor General’s findings said.

“We continue to lobby for this change so that we can carry on operations as provided for in the Sports Authority Act. In light of your audit findings, your support of this change in the way the NSA is funded could be helpful.”

The Government, meaning Bahamian taxpayers, injected a total $7.167m subsidy into the NSA over the six-year period between July 2011 and June 2017 to fund its operations as well as cover essential maintenance and capital improvements associated with the staging of events such as the IAAF World Relays.

However, the Auditor General’s report, which was tabled in Parliament yesterday, detailed the all-too-familiar issues with a state-owned enterprise (SOE) - lack of taxpayer “value for money” on funds spent; political interference; inadequate controls; the absence of proper procedures; poor transparency and accountability; and breaches of both its own Sports Authority Act 2011 as well as the Financial Administration and Audit Act.

While none of the companies and employees referenced in the Auditor General’s report were mentioned by name, it referred to a $193,548 contract awarded to an entity called “Company B”.

“We noted that a contract was signed by a senior government official on October 8, 2014,” the report said. “We observed that no document on file giving approval to pay the above amount other than a copy of an invoice.

“We further noted that neither the Board nor the executive team seem to have been made aware of the engagement. Additionally, the deliverables in the contract were vague and provided no timeline for completion. As this expenditure seemed not to have been budgeted for, it could have placed a strain on the finances of the organisation to meet its fixed operation cost.”

The Auditor General’s report also pointed to $1.03m paid to “Company G” over a three-and-a-half year period to January 24, 2018, with “none of the works put out to tender” for competition with rival vendors.

As a result, the Government’s financial watchdog said it was “not satisfied that proper value was obtained”, adding: “Because of the number of services the company performed, the risk involved of not having contracts for each job was high and NSA could have found itself paying additional cost.

“It is recommended that all works be accompanied by an official contract. It is further recommended that the practice of approving payments without going through the proper channels be ceased immediately.”

The Auditor General’s report added, in relation to a “Company H”, that NSA management “may have over-extended their authority to have” three cheques totalling $109,471 signed on the same date. This was seen as a way of getting around the requirement that all payments worth $50,000 or more must be signed by a Ministry of Youth, Sports and Culture official.

And “Company K” was paid $33,500, or 12.13 percent more, than the $275,000 contracted amount to install fencing at the National Stadium.

Turning to governance, the Auditor General said a Ministry of Youth, Sports and Culture official served on the NSA Board between July 2015 to June 2016, and July 2016 to June 2017, receiving $12,283 for their services even though the Authority’s own Act makes no provision for senior civil servants to occupy such a position.

As for employee matters, the report referenced an “Employee E” who signed an employment contract with the NSA to be paid $5,000 per month, or $60,000 annually, from October 1, 2012, to June 30, 2015. Over the total contract, this would amount to $165,000.

However, the Auditor General’s report said: “We observed that invoice were submitted in Employee E’s company’s name. Prior to the start of VAT, Employee E requested to have cheques written in the company’s name.

“As payment of government taxes (VAT) was mandatory at the beginning of January 1, 2015, the total amount paid to Employee E during the period January 1, 2012, through January 6, 2016, was $333,398.”