ORG highlights areas for improvement in tabled Public Finance Management Bill
The Organization for Responsible Governance (ORG) has identified 32 areas government should reconsider as it prepares to further develop and debate the Public Finance Management Bill, 2023 recently tabled in Parliament.
During his mid-year budget communication last month, Prime Minister Philip Davis tabled the long-awaited bill, which is intended to repeal and replace the Public Finance Management Act, 2021; repeal the Fiscal Responsibility Act, 2018; and sections of the Financial Administration and Audit Act. Those bills, the Davis administration has lamented, were flawed, making it challenging for public servants to operate within the legal framework.
ORG, however, highlight several aspects of the new bill which it said leaves an opportunity for strengthening.
It highlighed section 136 of the new bill, which speaks to conflict of interests and states that “A public officer or other person with responsibility for public resources who is employed in a revenue and taxing agency shall not without written authorization from the principal accounting officer act as an agent for any person seeking to transact with any revenue and taxing agency,” and “may be subject to disciplinary action” if they are found to do so.
ORG said the language in the section does not reflect a high level of accountability.
“The sole mention of sanctions for acting as an agent without written approval are that the party may be subject to disciplinary action. This does not seem commensurate to the listed potential sanctions in the prior section. The 2021 act referred to instances that equaled financial misconduct and established some level of consequence. Inclusion of these in the 2023 bill establishes a critical level of integrity and accountability,” ORG stated in a lengthy document.
“Additionally, reflecting a commensurate level of sanction and liability establishes equity and suitable mechanisms for enforcement and adherence to the mandates of the legislation (an example is the members of the Fiscal Responsibility Council are at risk of a fine not to exceed $50,000 for a breach of confidentiality, whereas the language from the 2021 act references no criminal offense or fine for financial misconduct). Inclusion of this language in the 2023 bill would reflect a higher level of accountability.”
It recommended government restore reference to specific offenses and potential penalties and sanctions, and ensure that the penalties are consistent with other referenced penalties in this legislation and substantial enough to support adherence to the legislation.
Additionally, the governance watchdog pointed to section 25 of the 2023 bill, which speaks to deviation from fiscal objectives.
The bill states that “The government may deviate from the fiscal objectives where that deviation is due to a significant unforeseeable event that cannot be accommodated through the use of other measures provided for in this act or prudent fiscal policy adjustments,” and if the deviation “has not been cured prior to the mid-year review or the annual budget…the government shall outline (within those exercises)…the measures it intends to take to return to compliance…”.
ORG said government should restore administrative sanctions provided under the current laws and consider enhancements.
“Inclusion in the 2023 bill of the requirement to report to Parliament the reasons for departure from fiscal objectives and the time line enhances accountability and transparency as per best practices. This was noted by the IDB as the sole administrative sanction in the 2019 act and it also was recommended to be enhanced to ensure adherence,” ORG said.
Elsewhere in the document, ORG highlighted two sections which include the auditor general among the list of people that operate in accordance of the act. ORG said that should be reviewed against the constitution and revised.
“The 2023 bill seems to limit the capacity of the auditor general to question the merit of policy objectives or government business enterprises seemingly in contrast to Article 136 in the Bahamas Constitution that ‘the auditor-general shall not be subject to the direction or control of any other person or authority’, ORG said.
