The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government’s top financial watchdog has renewed complaints that some civil servants are breaking the law by obstructing his office’s efforts to uncover misuse of taxpayer monies.

Terrance Bastian, the auditor general, in giving his “perspective” on the audit of the Government’s 2018-2019 financial accounts, warned that his staff’s work “continues to be impeded” by officials in several ministries and departments.

While the guilty parties, both individuals and institutions, were not identified by Mr Bastian, he reiterated that such obstruction in failing to hand over necessary files and documents violates the Financial Administration and Audit Act 2010.

And these barriers are also helping some public officials evade accountability for the waste and mismanagement of increasingly scarce Bahamian taxpayer funds, the auditor general wrote, at a time when the Government needs to achieve value for money with every dollar due to the twin fiscal and economic crises that have been worsened by COVID-19 and Hurricane Dorian.

While both this and under-staffing at the Auditor General’s Office “remain a concern”, Mr Bastian voiced some optimism that implementation of an Integrated Financial Management Information System (IFMIS) is now “underway” across the Government.

However, he warned that potential governance improvements - which should result from the system’s provision of “real-time financial information” - could yet be derailed by the so-called ‘deep state’ of “bureaucracies” and the absence of critical decision-making by “top level civil servants”.

The auditor general’s issues were set out in a November 10, 2021, report by Mr Bastian and his staff that was tabled in the House of Assembly earlier this week. “A matter of concern exists in regards to obtaining access to audit information/documentations within some government departments/ministries,” he wrote.

“Some public officials still appear to be unaware of the provision of Section 41 (1) (a) of the Financial Administration and Audit Act 2010, which entitles the Office of the Auditor General to have access to all books, records, returns and reports related to government accounts.

“As a result, the work of the Auditor General’s Office continues to be impeded in some cases due to the lack of co-operation by officials of various ministries and departments.” The culprits were not identified and, although this is not the first time Mr Bastian has raised such concerns, the fact he has repeated them indicates there has been little improvement in some officials’ approach.

“Some public officers are not being held accountable for their actions, which results in loss or wastage of government funds,” the auditor general added, in a conclusion that will likely come as little surprise to informed observers.

“The belief of public accountability is generally construed as the obligation to answer for the discharge of responsibilities entrusted to government officials/workers. When accountability is present, an organisation operates more efficiently, effectively and economically. In addition, the environment is more conducive to positive growth.”

Mr Bastian then placed great emphasis on efforts to implement an Integrated Financial Management Information (IFMIS) across all government departments and agencies, describing it as an efforts to fully computerise “public financial management processes”.

Noting that execution will “provide a complete audit trail” for his office to follow, he said: “The implementation of IFMIS is underway, and hopefully can be completed in a timely manner..... A fully functioning IMFS can improve governance by providing real-time financial information that financial and other managers can use to administer programmes effectively, formulate budgets and manage resources.

“A sound IFMIS can help the Government gain effective control over its finances, and also enhance transparency and accountability, reducing political discretion and acting as a deterrent to corruption and fraud.”

However, Mr Bastian warned that this effort could run into internal opposition within the Government. He wrote: “Implementing a successful IFMIS is paved with difficulties, such as resistance from the bureaucracies involved and lack of decision-making from the top-level civil servants.”

Besides providing a better, and more true, audit trail, the auditor general said the system’s introduction will provide “timely, accurate and consistent data for management and budget decision-making”, while providing for “greater financial control” and better support for policy decisions.

Finally, Mr Bastian also voiced concerns about manpower needs at his agency. “The Office of the Auditor General continues to operate with minimal staff,” he said. “However, the Government of The Bahamas with the assistance of the Ministry of Finance has allowed the Office of the Auditor General to hire staff on contract and to outsource to private accounting firms.

“We are expecting to continue to the process of hiring by way of contracts in order to increase numbers and upgrade the quality of staff.” 

Elsewhere, the Auditor General’s Office report also voiced concerns about governance at state-owned enterprises (SOEs) that consumed a collective $421.68m in taxpayer subsidies, or 17 percent of the $2.46bn recurrent spending, in the 2018-2019 fiscal year.

The Public Hospitals Authority (PHA), which accounted for $230.23m or 55 percent of this sum, went over budget for that year by $14.23m. Others who burst their subsidy allocations were the Water & Sewerage Corporation, which at $31.01m went over its $25m Budget allocation by $6m, and the University of The Bahamas (UoB), which was $6.98m over-budget at $38.55m.

Pointing out that SOEs were required to table their annual reports and audited financial statements in Parliament annually, although in practice none meet these stipulations, the report said: “The SOEs’ efficiency, effectiveness, transparency and good governance are supreme.

“Accordingly the independent audited financial reporting is integral for all stakeholders. Advancing timely issuance of the same is fundamental.”