The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The COVID food initiative’s 8 percent administrative costs ratio is “far below” the typical international benchmark for non-profits, a governance reformer revealed yesterday.

Matt Aubry, the Organisation for Responsible Governance’s (ORG) executive director, told Tribune Business that the sum allocated by the National Food Distribution Task Force’s administrative overheads was almost half the typical 15-20 percent ratio incurred by non-governmental organisations (NGOs) worldwide.

Speaking after the Prime Minister voiced outrage that some $4.77m, or 9 percent, of the $53m worth of taxpayer monies allocated to the COVID feeding initiative went to cover administrative and start-up costs, he asserted that there needs to be greater “understanding” of the work NGOs perform and how they are financed.

Mr Aubry, who helped to set-up and structure an initiative that fed thousands of Bahamians at the pandemic’s height, said 15-20 percent of financial resources going to cover administrative costs was the normal global average.

“The Task Force took it to much less than globally recognised benchmarks,” he told this newspaper. “Eight percent is definitely far below in that space. That is a very responsible percentage. That model by any measure is not excessive.

“The other thing to understand is that effective NGOs are professionally run. They have structures in place to do these things. If you think about businesses and government as an alternative, when you look at the Government’s Budget - just the most recent one - you can see administrative costs represent between 13-15 percent of how government monies are used.”

By way of further comparison, the Food Task Force’s 8 percent administrative costs ratio is about one-third of that incurred by the National Insurance Board (NIB), which typically consumes between 20-25 percent of its contribution income in this area.

Mr Aubry said another way of looking at the administrative cost ratio was that between 91-92 percent of the $53m in taxpayer funding allocated to the National Food Distribution Task Force went to providing Bahamians with much-needed food to sustain themselves after the economy was shut down virtually overnight.

“There’s not a lot of understanding about how a non-profit functions,” the ORG chief added. “What are the costs that go in, and the costs that go out? Think about a model where 91-92 percent goes on the actual services.”

He explained that members of the Food Task Force, which included NGOs such as Bahamas Feeding Network, Hands for Hunger, the One Eleuthera Foundation and the Red Cross, had to cover transportation costs involved in getting resources to where it was needed as well as pay volunteers for their time and efforts.

Mr Aubry spoke out after Philip Davis QC yesterday launched another attack on the Food Task Force, singling out in particular the 8 percent of funds that went to administrative costs as well as a further 1 percent that went on “start-up” costs.

The Prime Minister also noted that Susan Larson, the Task Force’s chair, was paid a $7,000 monthly salary - equivalent to $1,750 per week or $84,000 per year - by the Government for her work. “Did we know that? Did we expect that?” he asked. “It appears she was not required to report to anyone on how that money [$53m] was spent.”

Mrs Larson’s compensation, though, certainly pales in comparison to that received by Kay Forbes-Smith in her role as the Disaster Reconstruction Authority’s (DRA) managing director. However, Mr Davis was not finished with the Food Task Force.

He referred to a Zoom call and accompanying presentation by Mrs Larson, part of which he held up in the House of Assembly yesterday, which showed the initiative was being structured with the respective allocations to start-up and administrative costs.

“That sounds like 9 percent,” the Prime Minister asserted. “We should all ask the question: That looks like $4.77m. That’s what it looks like. I thought that would be something where the say NGOs in that situation are volunteers.... I didn’t expect anyone to be paid to do this job.”

Amid shouts from his parliamentary colleagues that such services should be free, Mr Davis asserted that both the director of social services and Ministry of Social Services permanent secretary were excluded from the design of the Food Task Force - something that Tribune Business sources later suggested was incorrect.

And he added that the likes of churches and the Red Cross appeared to have been excluded from participating in the initiative, as they would have provided their services for free, even though Mr Aubry said the latter had been involved. 

The 8 percent figure, though, is no surprise. Michael Pintard, the Opposition’s leader, last year told Tribune Business that the Minnis administration had sought to keep the food programme’s administration costs as low as possible with just 8 percent of monies used for this purpose on New Providence.

This rose to 12 percent on the Family Islands, and 18 percent on Abaco where infrastructure had been devastated by Hurricane Dorian. And Mr Pintard said both the United Nations Development Programme (UNDP) and the World Food Programme had been involved in helping to structure and execute the initiative, and drawing up the criteria used to determine who would receive help.

While Mr Davis yesterday said he only wanted to confirm how the $53m provided by Bahamian taxpayers had been spent, and if the Government received value for money, the ORG chief said it was vital that the report into the Food Task Force be published so all Bahamians can draw their own conclusions.

Tribune Business understands that the external auditor conducting the probe is Kershala Albury, a former executive with Commonwealth Bank and Family Guardian, who is now president and principal consultant at her own firm, ATI Company Ltd.

Mr Aubry said: “This is why I think the critical need is to have this evaluation done in an as objective a way as possible, and the full report presented so that we understand this in its full context. We have to learn from this, adjust, and be as efficient and effective as possible, particularly when working with the Government to execute taxpayer monies.”