The time of state-owned enterprises (SOE) operating without key performance indicators (KPI) will end with the passage of the new Public Financial Management Act (PFM) in July, Acting Financial Secretary Marlon Johnson said yesterday, adding that all government entities will soon be held accountable for how their money is used.
Johnson, who spoke on the subject during an appearance on Guardian Radio talk show “The Hit Back with Nahaja Black”, said while the measures required by the PFM will not be immediately seen, subsequent budget years will require ministers of government agencies to report on their plans, KPIs and successes.
“We do not have the KPIs so what has happened is the new Public Financial Management Act, that comes into effect in July, mandates that both state-owned enterprises and government entities report on management metrics, on KPIs, on objectives and goals, so you will see that in the new Public Financial Management Act 2021,” said Johnson.
“This new year they (SOEs) have to get ready, but in the subsequent period you will start to see that not only do they have to provide new goals, but their ministers have to report on their KPIs and their attainment, so that the public can start to ask, ‘what is happening with the money that they are allocating for these state-owned enterprises?’”
Johnson said SOEs have to move to a cost recovery method, as the government cracks down on SOE expenditure as the country’s debt level mounts.
He said agencies like Bahamasair have already began to adjust their affairs and operations in a move to balance their books. The COVID-19 pandemic wreaked havoc on Bahamasair’s financial position last year, costing the airline millions of dollars because of
Johnson said SOEs will begin to become more balanced businesses under the PFM.
“Certainly, SOEs have to be rationalized, they have to be made more accountable and the PFM will move them towards accountability,” he said.
“And certainly, as the government sort of pulls back on its subventions, they would have to be able to pay for themselves.”