Sunday, Oct 13, 2019
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The transparency standard

In The Bahamas, parties in power routinely engage in a theatre of whataboutisms, where standards of performance are often not evaluated against an established benchmark but rather against what the other person in office did or did not do.

When it comes to the issue of transparency, an administration might well be providing the public more than what was given by its predecessor, but that does not necessarily mean it is providing the sum total of what the public ought to have to hold that administration fully accountable on a given issue.

Three examples of this can be seen in the national budget process, the Fiscal Responsibility Act and the process of contingency spending.

Stripping the budget

When the 2014/2015 budget was presented by the previous administration, the budget’s standard personal emoluments documentation was no longer included.

Those personal emoluments documents of the national budget detailed the staff count in each government department or ministry, respective salaries as well as job classifications in the public service.

The documents enable the Parliament and the public to track how many people are being added to or removed from government departments and ministries, how much they are being paid and what they are being paid to do.

Given that the lion’s share of the nation’s recurrent expenditure is earmarked for public service salaries and benefits, the ability to track this information was critical to the process of accountability in government.

At the time, State Minister for Finance Michael Halkitis explained the change as a function of modernizing the budget process. But what it did in effect was take away from the Parliament — to whom the Cabinet is accountable — the ability to hold the government accountable for its handling of the public service.

The change made the budget process decidedly less transparent.

At the time, then opposition leader Dr. Hubert Minnis decried the removal of the documents, suggesting that it represented a “constitutional crisis” and pledging that an FNM government would return the historic documents to the people’s budget.

But the current administration, who upon its election to office railed the previous administration for its number and process of public sector hires, has yet to return those documents and in the current fiscal year added its budgetary modernization module of its own.

In the 2019/2020 budget, separate line items and blocks that previously showed expenditures in various ministries and departments were “rolled up” into single line items — the effect of which is stripping away from Parliament and the public the ability to track expenditure in those areas.

Throughout the budget exercise, opposition members consistently sought clarity on expenditures that were no longer visible due to the new budget reporting process. They were repeatedly met with the response “we rolled it up”, leaving Parliament — to whom the Cabinet is accountable — having to settle for what they were being told as opposed to what they previously had been able to see and track for themselves.

The change, as well-intentioned as it may have been, again made the budget process decidedly less transparent.

Though new fiscal reports in line with the Fiscal Responsibility Act provide a kind of reporting not seen in previous administrations, the national budget authorizes the expenditure of government funds. No form of modernization should limit the Parliament’s and public’s ability to hold government accountable in budgetary spending.

The Fiscal Responsibility Act

A recent wrangling between government and opposition members over the merits of the Fiscal Responsibility Act fails to focus on what is at the heart of the problem with this landmark piece of legislation, which is that the Fiscal Responsibility Council created by the act is not a truly independent body for the same reason the Parliament of The Bahamas is not currently an independent body.

The five-member council, which is appointed by the governor general on the advice of the speaker of the House, is mandated to hold the government accountable in its adherence to the act’s fiscal rules and to the government’s stated fiscal targets.

Part III, Section 22(3) of the act states: “The accounting and administration functions for the council shall be carried out by an accounting officer responsible for accounting for the House of Assembly.”

At present, the accounting officer responsible for accounting for the House of Assembly is the secretary to the Cabinet. Since the secretary to the Cabinet functions at the directive of the prime minister, the act in effect makes the Fiscal Responsibility Council answerable to the very same executive branch of government it is mandated to oversee.

This same separation of powers dilemma exists for the Parliament itself, with the Parliamentary Service Bill 2019, currently in draft form, seeking to address this longstanding roadblock to parliamentary independence.

Moreover, Part III, Section 19(2) of the act empowers the prime minister, after consultation with the leader of the opposition, to appoint the council’s chairman from among its five members.

This provision further erodes what has been touted as the independence of the council. Previous versions of this act vested the power to select a council chairman in the council itself through a majority vote of its members.

Contingency spending

When the government seeks to spend over and above its approved estimates within a budget period, the Financial Administration and Audit Act (FAAA) empowers the minister of finance to authorize such spending from the Contingency Fund.

The FAAA mandates that the minister, as soon as possible after the authorization of such contingency spending, bring to Parliament a supplementary appropriations bill in respect of the expenditure.

The purchase of the Grand Lucayan property in Freeport was a contingency spend for which a supplementary appropriations bill was not brought as required by law.

Perspective questioned finance minister Peter Turnquest on why the government failed to follow the law in this regard and when the required legislation would be brought.

“Notwithstanding the fact that the supplementary appropriations bill for the Lucayan Renewals Holdings transactions has not been submitted, the government has remained transparent in respect to the level of expenditures — ensuring that such amounts are clearly identified in its quarterly fiscal reports to the Bahamian public,” the minister asserted a week after our initial query was made.

While quarterly reports have given some information on expenditure for the Grand Lucayan, the provision of that information does not follow the law with respect to contingency spending. It is an example of providing more information than what may have otherwise been given, but not meeting the standard of transparency and accountability set by existing legislation.

Minister Turnquest pointed out that his ministry is now preparing to deliver this bill to Parliament, adding that in preparation to do so, the ministry discovered that “the last time a supplemental appropriations bill was presented to Parliament was in 2010, although contingency spending clearly has taken place in fiscal years 2011/2012, 2012/2013, 2013/2014, 2014/2015, 2015/2016, 2017/18 and 2018/19”.

He added that a comprehensive exercise had been completed “of all contingency spending for which supplemental appropriations should have been, but were not tabled in Parliament over these last nine years”.

“Our intention is to prepare and table the appropriate bills to cover all such expenditures shortly after Parliament reconvenes following the summer break,” he advised.

“We will set this matter right, once and for all, and ensure strict adherence with the law going forward,” the minister said.

“This exercise will therefore cover all the matters related to Lucayan Renewal Holding Ltd, Bahamas Resolve, Bank of The Bahamas, Bahamasair Holding Ltd, pensions to officials, Water & Sewerage Corporation, special employment project, patrol sea craft, premium tax rebate, Ministry of Tourism obligations, Disaster Relief Fund and public debt servicing interest going back to fiscal year 2011/2012.”

An interesting outcome to Perspective’s query in this regard. We await the promised tabling of these bills.

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