The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Governance reformers yesterday urged that fiscal accountability and transparency are “not lost and watered down” through a comprehensive reform package unveiled by the Prime Minister.

Matt Aubry, the Organisation for Responsible Governance’s executive director, voiced concern that key elements in the existing Fiscal Responsibility Act and Public Financial Management Act be retained in the 108-page Public Finance Management Bill 2023 that was tabled in the House of Assembly yesterday.

The Bill, which had its first reading, was introduced by Philip Davis KC as he slammed the existing fiscal regulatory regime for “severely hampering the legitimate operations of the Government” through not being aligned with the practical realities that exist in The Bahamas.

Accusing the former Minnis administration of being on “autopilot” by its enactment of the Public Procurement Act, Public Finance Management Act, Public Debt Management Act and the Fiscal Responsibility Act package in their current forms, the Prime Minister charged: “None of the legislation reflects the situation which actually exists within The Bahamas, and their provisions severely hampered the legitimate operations of the Government.....

“There is no shame in borrowing ideas, concepts and even language in the drafting process. However, those in leadership have the responsibility to ensure that what is being adopted reflects the Bahamian reality. That was not done, and so it was that in September 2021, the Ministry of Finance was not equipped to comply with the new legislation.

“The required information systems were outdated or completely lacking, but the reality has changed and the Ministry of Finance is now well on its way to achieve full compliance,” he added. “The Government has acquired, and is now using, a best-in-class software to provide the many reports required under the Public Procurement Act.

“The Government is also acquiring a best-in-class financial information system to replace two legacy systems. For the first time, we are introducing true automation to our human resource systems. This is a significant achievement, and we are proud to have led the way in making government finances more transparent and accountable.”

The Public Finance Management Bill’s “objects and reasons” section pledges that it includes the “material provisions” from the laws it is designed to replace. “This Act repeals and replaces the Public Financial Management Act 2021, repeals the Fiscal Responsibility Act 2018 and sections of the Financial Administration and Audit Act,” the Bill said.

“Finally, this Act incorporates material provisions of the foregoing repealed enactments into a consolidated public finance and fiscal responsibility framework.” Mr Aubry acknowledged that government has a duty to make existing laws more “cohesive” and function better in their actual execution/implementation, as well as align them with practical realities, but urged that the new Bill not depart from the existing Acts’ core principles and provisions.

Noting that the Davis administration had previously served notice of its intent to reform both the Fiscal Responsibility Act and Public Financial Management Act, the ORG chief told this newspaper: “I don’t think we understood it would be put in a larger, more comprehensive piece of legislation...

“ORG, and a lot of other entities, contributed some pretty detailed feedback on the Fiscal Responsibility Act, Public Financial Management Act and Public Procurement Act. It’s important these pieces of legislation are cohesive, but there are key components of transparency and accountability put in those Bills and a level of adherence that raised certain standards and expectations of decision-making and reporting to the public.

“In looking at the new legislation, it will be important to pay attention to the fact these things are not lost.” Pointing to the revised Public Procurement Bill, Mr Aubry said ORG’s benchmarking review of the new legislation identified a mixed bag, with some provisions new and enhanced, others retained from the present Act, and a few where it appeared that standards may have eased.

Acknowledging that laws must be “user friendly” as well as achieving any enforcement objectives, he also warned against revamping critical legislation every five years when administrations change because this could rob the initiative of momentum and impact.

“The mechanism was built out five years ago,” Mr Aubry said of the Fiscal Responsibility Act, “and, if we’re going to rebuild it, it inhibits momentum sometimes. The hope is that doesn’t continue. We want the right legislation, we want it to be functional and enacted, but don’t want it to be someone looking at it five years later, saying it’s not our legislation, and redoing it. The success and outcomes of this need to be paramount.

“We also hope there is available time and resources for consultation; not just with the technocrats, not just those looking at actuarial tables and accrual reporting, but with day-to-day citizens so that this information is made tangible and meaningful.”

Michael Pintard, the Opposition’s leader, yesterday questioned whether the Public Finance Management Bill had been “peer reviewed” and been subject to consultation. “The thing that occurred to us right away is: Was it peer reviewed,” he added of the Bill. “Was this shared internally prior to them making the final decision?

“When we had introduced the package of Bills they went through a series of peer reviews. One of the questions is: Was that Bill put out for consultation? Our Bill was circulated, and we received technical assistance from CARTEC (the IMF’s regional facility). It would be really interesting to find out to what extent the Public Finance Management Bill went out for consultation and who they consulted with in that regard. I don’t think it was. Certainly no one I spoke to.”

Mr Pintard said he had spoken to a former finance minister, who he did not name, and who had yet to see the Bill tabled by the Prime Minister yesterday.