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Auditor’s report suggests Sage findings hold true ten years on

This is part two of the review of the Office of Auditor-General’s Public Interest Report on the Government’s Response to Covid-19: Travel Authorisation (TA).

Heather Thomas, the Auditor-General (File photograph)

Following on from last week’s review, now we look at Section 5 on pages 10 to 14, “Relevant contracts”.

This very detailed section focuses on conflicts of interest position reports not undertaken by ministers and public officers, relevant contracts’ service/financial details, Codes of Practice for Project Management and Procurement not adhered to, Bermuda Constitution Order 1968 breached in collection of TA fees by the vendor, instead of direct deposit to Government Consolidated Fund, and concerns about the safeguarding and storage of travellers’ personal and health information that, as of the time of the report, still resides with a vendor.

Ministerial Code of Conduct summary (page 10)

Members of the Legislature: 5.1, must disclose potential conflicts between their personal interests and the public interest; 5.1.2, must always be transparent; 5.1.3, members must never use information received in confidence in the course of their legislative duties for the purpose of financial gain or any personal benefit.

Summary of relevant contracts (pages 11 to 13)

The Government signed three contracts (#1 and #2) between March and June 2020, both subsequently combined into #3 at June 16, 2022 with local company vendor/supplier, resPartner Limited www.resQwest.com, co-owned by a consultant to the Government on fintech matters, who appropriately submitted a conflict of interest position to Government. However, no evidence of conflicts of interest disclosure was available for any minister or public officer when the contracts were signed between Ministry of Health and resPartner Ltd.

Calculations of sliding expense costs and fees charged under the contractual agreements of the Travel Authorisation Portal software service arrangement are listed for each contract.

Fees collected by the vendor are itemised in proper reconciliation detail with transfer dates of each cumulative collection transferred to Government recorded accounts, an estimated $20 million-plus with the vendor invoicing $6 million-plus.

Space does not allow further details and now these contracts have ended March 31, 2023. In any event, the ultimate goal of tracking travellers’ Covid-19 exposure was accomplished.

Other relevant current contracts (page 14)

Another agreement of concern during an audit revealed that the Government, represented by the Premier, signed a five-year service agreement with a vendor/supplier, BPMS Ltd, on August 24, 2020, effective September 1, 2020 to August 31, 2025. The company was not registered until February 16, 2021. There was no evidence of any tendering or request for proposals process and no evidence of Cabinet approval obtained.

Six months later the agreement was updated and signed by the Permanent Secretary, Cabinet Office, effective April 12, 2021 to February 21, 2026.

The vendor’s contract for service is in the form of a mobile portal application interactive tool that allows persons to remotely access and pay for public and private goods and services. Examples of mobile services access are: Port of entry paperwork, Virtual permit/licence, Parking, Health tracking, Payments of taxes, tickets, fees, etc.

While the application is not yet operational, according to an audit, Government paid BPMS Ltd $1.7 million through July 2022.

In late December 2022, the vendor filed a writ against Government for non-payment of $525,000 according to the Auditor-General.

Section 6: observations and lessons learnt

The World Health Organisation announced that Covid-19 pandemic was considered officially over on September 14, 2022.

The Government, citizens and residents of Bermuda have been through a lot in the past two years and this experience will live long in the memories of those who survived this difficult period in Bermuda’s history.

However, there remains an urgent call for the Government of Bermuda to revisit their policies and strengthen them in order to meet the changing nature of Covid-19 and future pathogens with pandemic potential.

There are long existing legislations, tools, policies, and procedures in place to ensure transparency and accountability of public officers, however many of these tools and guiding principles were simply ignored.

Multiple violations of the law and the Code of Practice for Project Management and Procurement in the awarding, development, implementation and operation of the Electronic Travel Authorisation Portal and the processing and collection of revenues generated by the use of this facility.

• No competitive bids were pursued

• Other established guidelines were breached or simply ignored, resulting in private-sector service providers in Bermuda being able to commence the provision of service with only verbal agreements, rather than properly executed contracts in place

• Even when contracts were eventually executed, they were not executed in accordance with the Code of Practice for Project Management and Procurement, the Public Treasury (Administration and Payments) Acts 1969, or Financial Instructions

• The use of a non-Government bank account for the receipt and processing of Government’s revenues, rather than these funds being paid directly into the Consolidated Fund, was a direct violation of the Bermuda Constitution Order 1968.

The action of the Government and Public Officers during the Covid-19 pandemic brings to mind the Sage Commission report (October 31, 2013) whose key findings included (among others):

• Lack of accountability

• Lack of performance culture

• Effective policies in place but not utilised

These observations contained in the Sage Report ten years ago still hold true today. Organisational culture lies beneath the surface and often explains how an organisation actually functions, when risks are identified and addressed.

The Government will hopefully have the courage to recognise and accept these root causes in order to implement actions that work to lessen their effects, improve efficiency and effectiveness for Bermuda, create a better organisational culture to attract and retain the right talent, and cultivate future public officers to provide a better public service.

And the public, to whom our Government is ultimately accountable, can find information and funds duly protected and can seek to see tangible results from them.

Information and observations are provided throughout this report. You, the public are encouraged to ask further questions to your ministers and government representatives.

• What steps have been taken to secure the personal information captured in the vendor application?

• After two years, what work is under way to improve readiness for future emergencies and crises?

• What steps have been taken to address the key findings from the Sage review?

I strongly encourage you to take the time to go through this report, carefully and thoughtfully for your April financial literacy project.

See also the extensive Appendix One.

• Find the Auditor-General’s full report under the heading of “Related Media” on this webpage.

Martha Harris Myron, JSM, is a native Bermudian with US connections, an author, financial columnist, and former qualified international financial planner Contact: martha.myron@gmail.com

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Published April 15, 2023 at 8:00 am (Updated April 17, 2023 at 7:58 am)

Auditor’s report suggests Sage findings hold true ten years on

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