Let’s end inefficient bureaucracy
I read John Barritt’s recent column regarding the Constitution and questioning the need for greater protection from political interference for certain key post-holders. Existing post-holders with such constitutional protections include the Director of Public Prosecutions, the Auditor-General and the Ombudsman. Mr Barritt suggested that the Public Accounts Committee be afforded the same protection.
The main purpose of the non-partisan PAC — which is always chaired by the Leader of the Opposition — is to examine, consider and report on the audited government financial accounts after they have been presented to and accepted by the House of Assembly. These financials reflect all spending of public funds that have been granted by the legislature.
After the audited financial statements of the Consolidated Fund and the Auditor-General’s Audit Report thereon are tabled, the PAC reviews them and issues its own report to the House, which then requires the Minister of Finance to respond to the recommendations. During its review, the PAC may make inquiries of accounting officers and request the appearance of any person to address significant concerns. The PAC has an important oversight role and holds government officials to account for the economy, efficiency and effectiveness of public spending.
As Mr Barritt rightly pointed out, the PAC continues to be nowhere near as effective as it should be. We know this to be true because the Auditor-General’s reports keep raising the same red flags, the same warnings about lack of financial accountability year after year, no matter who is the government. In its defence, the PAC has repeatedly called for more funding for human resources to assist in its role of financial oversight and research, but to no avail. This, it says, has affected the ability to perform its oversight function in a timely manner.
Our auditor-general continues to emphasise that it is essential that PAC reports to the House are timely so that ongoing discussions in the House on her financial reports are not delayed to the point of being no longer relevant. The Auditor-General also warns us that the risk of fraud increases with long delays in accounts reconciliation.
We have heard from the Office of the Auditor-General that there has also been insufficient budget funding for its own staff requirements, which certainly shows that our finance ministers — over several government administrations — do not appear to place a high priority on the scrutinisation of expenditures from the public purse, which in itself is rather surprising and should be of concern to every Bermudian.
Mr Barritt suggests that the PAC be elevated to equal status in the Constitution Order, and afforded the same protection as the Auditor-General, but I feel we can achieve a similar result using a different solution: the PAC and the independent Office of the Auditor-General are critical, but they are two separate administrative entities. While the PAC is non-partisan in theory, I cannot help but sense that party politics gets in the way of its progress. On the other hand, the Auditor-General’s office is and has shown itself to be an efficient, impartial and highly respected “watchdog” of the public purse for decades, yet many of its financial/procedural recommendations are never implemented by the government of the day.
Given that the constitutionally protected, independent Office of the Auditor-General produces the annual report on the state of our government finances, I believe this office should be allowed to absorb the PAC oversight role. It should be given adequate staff/funding to enable it to take on the additional but related role of reviewing and resolving the already identified financial discrepancies. With this scenario, we take away a layer of inefficient bureaucracy — the PAC — the potential for political interference becomes less of an issue and oversight of the implementation of all the Auditor-General’s recommendations becomes the responsibility of that office.
The Auditor-General’s office has had a stellar record for decades reporting annually on the way the public purse is used. Her annual reports include instances of failure to follow financial instructions, late and incomplete reporting and, most recently, the highly irregular use — from June 2020 to February 2022 — of a non-government bank account for the initial receipt and processing of millions of dollars of government revenue; ie, Travel Authorisation fees. Our auditor-general stated that this is a direct violation of the Bermuda Constitution Order of 1968, which requires all government revenues to be paid directly into the Consolidated Fund. Requirements of the Public Treasury (Administration and Payments) Act 1969 reinforce this.
Also, our auditor-general identified that the Government transferred $1.2 million through July 2022 to an initially unregistered company for an online/mobile portal payment contract — a contract secured without Cabinet approval and which, as of April 2023, was not operational. Owing to a payment row between the vendor and the Government, this matter is now before the courts.
It is here that I must credit the existing PAC for its February 2023 report, which reviewed the most recent Auditor-General special report on the Government’s fiscal management during the two years of Covid-19 and further examined its fiscal response to the pandemic. It was a report that uncovered continued administrative inefficiency, poor co-ordination between ministries, outdated laws, no plans or training in crisis management, and a lack of business-continuity plans.
During the two-year Covid period, weekly emergency-management meetings had no formal minutes on record and an emergency budget was not established through the Ministry of Finance. Some private-sector service providers to the Government were able to commence the provision of such services with only verbal agreements. It was revealed that only Cabinet conclusions and ministerial approvals on spending of more than $100,000 were formally recorded. The PAC thus concluded that the full cost to the taxpayer of the pandemic most likely will never be known because no special payment instructions were documented and there was no indication that the Code of Practice was in place.
So, yes, there are some incidences of PAC effectiveness, but generally its function is sporadic and often delayed. Given the large amount of financial discrepancies that are outlined in each Auditor-General annual report, the PAC is just scratching the surface of a fiscal iceberg that reaches deep below the surface. While I have been focusing on the performance of the administrative government, here is a reminder of the Government’s ministerial code of conduct:
“As the political head of a ministry, the minister is responsible for all of its acts and omissions, and must bear the consequences of any defect of administration or any aspect of policy which may be criticised in the legislature [hereinafter “Parliament”], whether personally responsible or not.”
This brings to mind the Auditor-General’s March 2023 Travel Authorisation report I mentioned above. Who “authorised” the use of that non-government account for the initial processing of what amounted to millions of dollars in revenues raised by the Travel Authorisation portal? Will there be any consequences for violating the Bermuda Constitution Order? (Remember, at present, it is not the Auditor-General’s role to ensure the resolution of identified discrepancies and maladministration.) It should be noted that the Premier has disagreed with the Auditor-General on some matters in her report, but things have been awfully quiet on this subject, since the police announced they would be meeting with the Auditor-General to discuss her findings.
Our present auditor-general, Heather Thomas, continues to express the hope that members of the public would take note of the reports released by her office. Several months ago, she wrote: “Our office does not drive the change. Our office provides that information to allow persons to take it and then ask their relevant MPs or other public servants the questions.”
Again, I ask, why not give the Office of the Auditor-General more constitutional authority and provide the resources for her to drive the change? Because:
1, This is the office that uncovers and identifies the problems
2, It seems no one other than the Auditor-General has demonstrated a keen interest in resolving them
An amendment to the Constitution would be necessary to achieve this. Both t he people and the Government can and should drive this change.
One thing is clear: the legacy of the damning 2013 Sage report continues to live on in infamy.