Commission Of Inquiry Into Auditor’s Report

December 29, 2015

[Updated with video] A Commission of Inquiry will be formed “to investigate the issues raised” in the Report of the Auditor General, Premier Michael Dunkley announced today [Dec 29].

The Auditor General’s report on the Government’s Consolidated Fund for the years ended March 31, 2010, 2011 and 2012, included information on instances of overspending, expenditures not having the required Cabinet approval, contracts not being tendered, duplicate payments being made and other issues pertaining to tens of millions of dollars.

Premier Dunkley said, “The report describes serious problems of accountability and control in the administration of the public purse. These are problems that have harmed the financial wellbeing of Bermuda.

Michael Dunkley 151229

“The most serious area of concern identified by the Auditor General was government failure to obey its own Financial Instructions. These instructions exist to impose financial controls that are consistent with international best practice and essential to upholding principles of accountability, value for money, fairness and transparency.

“The Auditor General was clear about the seriousness of the situation: Financial controls, she said, “are ignored or overridden, with those responsible seemingly immune to the imposition of penalties and sanctions…”

“The consequence of these and other identified failings appears to have fostered a culture of negligence, in which basic rules and practices for the sound management of the people’s money were not applied.

“The Auditor General, as a result, reported millions of dollars spent without Cabinet approval, millions of dollars paid without signed contracts, tens of millions of dollars committed to contracts not tendered and millions paid to consultants without prior approval.

“The findings are disturbing. There is no future for Bermuda, as we know it, if there are no adequate safeguards to prevent the practices described by the Auditor General from taking place again.

“They have contributed to the unsustainable spending deficits that have pushed public debt to the absolute limits of our ability to manage it. The situation is a danger to our international reputation, our solvency, even our self-government. We need to be sure that we have the right controls in place for the future.

“I will therefore, by the authority of the recently amended Commission of Inquiry Act 1935, and with the support of the Governor and the Head of the Civil Service, form a Commission of Inquiry to investigate the issues raised in the Report of the Auditor General on the Consolidated Fund of the Government of Bermuda for the Financial Years ending March 31 in 2010, 2011 and 2012.”

“The Commission, which will be appointed in mid January, will examine the context of transactions to determine whether unacceptable conduct has occurred or not.

“It will have the power to summon witnesses, examine them under oath and call for the production of documents. Its meetings will be held in camera and its report made public in a timely fashion.”

“In taking this step, I am hoping to break the back of bad habits, to heighten public understanding of the issues and to return the principle of accountability to the centre of government business at every level.”

The Premier’s full remarks are below:

Good morning and thank you for coming.

Just last month, the Report of the Auditor General on the Consolidated Fund of the Government of Bermuda was tabled in the House of Assembly.

The Consolidated Fund is the Government’s general operating fund – the place where all taxpayer dollars go to pay for all government business and services. The Auditor General’s report covers the Financial Years ending March 31 in 2010, 2011 and 2012 and contains her opinion on the integrity of the financial statements of the Consolidated Fund.

In conducting an audit, the Auditor General evaluates the risk of misstatements in the documents being audited, whether by fraud or by error. This is normal practice and leads either to an unqualified auditor’s opinion, which means the financial statements are deemed to present a true and fair picture of the Consolidated Fund, or to a qualified opinion, which means the statements reflect concerns that prevent the Auditor from giving her stamp of approval.

This latest Auditor’s report, culminating in 2012, marks the fifth straight year that government financial statements have been given a qualified opinion; that’s five straight years in which the Auditor General could not say that the financial statements of the government of the day presented a true and fair picture of its management of the people’s money.

The report describes serious problems of accountability and control in the administration of the public purse. These are problems that have harmed the financial wellbeing of Bermuda.

The Auditor General, for example, described a budget process that contributed to and perpetuated inefficiencies and ineffectiveness across government.

She pointed to an “ingrained” tendency within government to overspend budgets in ways that raised questions about the credibility of the budget process, spending control and cash management.

The most serious area of concern identified by the Auditor General was government failure to obey its own Financial Instructions. These instructions exist to impose financial controls that are consistent with international best practice and essential to upholding principles of accountability, value for money, fairness and transparency.

The Auditor General was clear about the seriousness of the situation: Financial controls, she said, “are ignored or overridden, with those responsible seemingly immune to the imposition of penalties and sanctions…”

The consequence of these and other identified failings appears to have fostered a culture of negligence, in which basic rules and practices for the sound management of the people’s money were not applied.

The Auditor General, as a result, reported millions of dollars spent without Cabinet approval, millions of dollars paid without signed contracts, tens of millions of dollars committed to contracts not tendered and millions paid to consultants without prior approval.

The findings are disturbing. There is no future for Bermuda, as we know it, if there are no adequate safeguards to prevent the practices described by the Auditor General from taking place again. They have contributed to the unsustainable spending deficits that have pushed public debt to the absolute limits of our ability to manage it. The situation is a danger to our international reputation, our solvency, even our self-government. We need to be sure that we have the right controls in place for the future.

I will therefore, by the authority of the recently amended Commission of Inquiry Act 1935, and with the support of the Governor and the Head of the Civil Service, form a Commission of Inquiry to investigate the issues raised in the Report of the Auditor General on the Consolidated Fund of the Government of Bermuda for the Financial Years ending March 31 in 2010, 2011 and 2012.

More specifically, the Commission will:

  • Identify breaches of Financial Instructions and how they arose
  • Consider the adequacy of safeguards and the system of accountability
  • Make recommendations to prevent recurrences and to mitigate financial, operational and reputational risks
  • Refer any evidence of possible criminal activity, which the Commission may identify, to the Director of Public Prosecutions or the Police
  • Draw to the attention of the Minister of Finance and the Attorney General any scope, which the Commission may identify, to secure recompense under the Public Treasury Act, including Financial Instructions, and Civil Asset Recovery.

The Commission, which will be appointed in mid January, will examine the context of transactions to determine whether unacceptable conduct has occurred or not. It will have the power to summon witnesses, examine them under oath and call for the production of documents. Its meetings will be held in camera and its report made public in a timely fashion.

In taking this step, I am hoping to break the back of bad habits, to heighten public understanding of the issues and to return the principle of accountability to the centre of government business at every level.

In considering this matter, I have also been concerned that the Auditor General’s report has cast a cloud over the management of the Civil Service. This is unfair to the thousands of competent, caring and honourable public service professionals doing a good job, and I am confident that the Commission’s findings and recommendations will bring clarity and reassurance to them. But the findings of the Auditor General are serious enough to warrant this kind of action.

As I’ve said, it is our intention for the Commission to report quickly. The Commission will be independent and its conclusions will be open, providing answers to questions many Bermudians have been asking.

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Comments (52)

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  1. aceboy says:

    The people on this Commission need to be completely independent. We do not want or need another PAC-like sweeping of issues under the rug because the Chairman doesn’t want to discuss specific matters.

    • Yo da says:

      Out of Burt’s hands taken has it.

      • Izzypop says:

        Yes agree should totally independent.

        • How about de U.B.P. days and this current F!@#ed up excuse for a Government.

          • It's about time! says:

            Somebody sounds nervous…..

          • Sickofantz says:

            You don’t sound like you are very keen to discover how all these cost over runs occurred? And how the Bermuda tax Payer lost so much money? Are you actually Bermudian?

          • Try It says:

            @ Onion Smell, cause they didn’t screw the population like some other party . U want a F!@#ed up excuse for a govt watch the rats scramble off the ship

          • bluwater says:

            How about them? Why didn’t the PLP have an inquiry into those?

            PLP/OBA must respect the People’s money.

  2. Toodle-oo says:

    Most people are sick and tired of hearing platitudes about ‘We want to find out what went wrong’ , ‘We want to find out why procedures weren’t followed’ , ‘We want to make sure this doesn’t happen again’ and blah blah blah

    We , the public KNOW that something very serious happened and we demand to know exactly who took how much and where it went and how we’re going to get it back . Not to mention wanting to know what is going to happen to them other than nothing .

    We deserve nothing less .

  3. Kangoocar says:

    Finally!!!!!! Thank you Premier Dunkley, for setting up this commission of inquiry concerning the Auditors report, hopefully now any malpheasance will be exposed and those responsible will be held accountable??? Once the commission has completed its report and those are held accountable, I truly beleive that will be our first day on reconciliation for all of Bermuda and we then we will move on to brighter and better things?? I am sure their are a few nervous ex government cabinet ministers, right about now????

    • sage says:

      Question marks go at the end of questions, it’s not that difficult.

      • Kangoocar says:

        Here we have $800 MILLION missing or unaccounted along with about $100 MILLION more that was spent with no backup documents by the previous government, and you are worried about question marks??? You really are a simpleton aren’t you????

        • sage says:

          And you claim to be a “job creator” and operate a business? Proves you can be a boss and simultaneously be a dunce.

          • Kangoocar says:

            And it took you over 24 hrs to come up with that lame response, say again who the dunce is?? Let me help the slow, aka you!!! I do actually oporate a business I started from nothing and do employ until now a 100% Bermudian staff, so that make me a GIVER to the government and the whole economy, what do you contribute or as I highly suspect, are you a NET taker??? Be honest now!!!

    • Triangle Drifter says:

      There must be a few lawyers rubbing their hands with glee right about now. Lets make sure the public gets paid back first, before any lawyers for the crooks.

      It will be interesting to see who holds what in the form of asset holding shelf companys here, there & anywhere else.

      • Then we might as well fire Scotland Yard.

        • aceboy says:

          Why? Because you bought the line that they have investigated all potential wrongdoing by the PLP? You’ll believe anything I guess.

    • Impressive says:

      No Problem,, One question Kangoocar. If this Commission completes it thorough and intense exercise and no one that you are expecting to be brought to justice is named or identified, will you then offer to apologize for your public assumptions? By the way, I welcome the commission and I look forward to the findings.

      • It's about time! says:

        Another problem…apologise to WHOM??? Has he/she (Kangoocar) publicly named any individuals that are thought to be responsible??? I don’t think so…which means you’re just blowing smoke…

  4. Hey says:

    D-Day is finally here.

    • Toodle-oo says:

      As nice as that would be I’m sure that in the end it’s going to be a huge let down

  5. John E. Thorne says:

    At the end of the day, I do not want to hear that although some unethical things took place, none of them were illegal under Bermuda’s laws and therefore, nothing is going to be done about it!

  6. Rick Olson says:

    The deflection will be fierce and nasty.

    • Little says:

      Hence, party split and by-election… heads have started rolling…

  7. NCM says:

    There are sitting MPs who were allegedly involved in the shenanigans that took place during the years covered in the Auditor’s Reports. Perhaps we might have another by-election in the next year or two.

  8. O'Brien says:

    Now we’re talking!!!

  9. swing voter says:

    This inquiry is a Waste of money. We know the money was burnt. Thats why there had to be a change in 2021…

  10. Betty Boop says:

    I sure hope some go to jail over this, or at least are made to pay the money back to us…we’ll see.

  11. Truth is killin' me... says:

    Some shredders have been working hot to the point of melting point over the Christmas Holidays creating unseasonable warm temperatures for this time of year. BELCO even had a spike in kilowatt hour usage in many households during the break. Police should be checking those homes first!

    • Andrew Little says:

      Lock down the airport, post an extra guard at the departures gates…

      • Try It says:

        I bet some have already assets stashed overseas or in property, swiss and cayman accounts and private planes at the ready.

    • high road says:

      As funny as this is, it probably isn’t too far from the truth.

  12. PATI says:

    Bad boys, bad boys, what you gonna do? what ya gonna do when they come for you?

  13. IslandTeacher says:

    Let’s welcome Sir Robin on the BA flight.

    • aceboy says:

      Brave brave brave Sir Robin?

      Minstral: He is not in the least afraid to be smashed into a pulp. Or to have his eyes gouged out and his elbows broken. To have his knee caps split and his body burned away….

      Brave brave brave brave Sir Robin.

      Sir Robin: Uh…that’s enough singing for now lads.

  14. Widget says:

    Have you ever noticed how some individuals avoid commenting on certain issues? Whit that said we need “honest forthright people sitting on this commission, no exceptions.

  15. San George says:

    The price you pay for not maintaining the status quo! If no one is going to jail – please don’t waste our time and more money. This should take about two years – the results will be revealed just prior to the calling of the next election. Back to the future!

  16. Find our money says:

    I hope this does not get whitewashed. In my *opinion* this is FRAUD and should be prosecuted. The long arm of the LAW should bring all concerned to justice, PLEASE! So that our hard earned taxes can be recovered and used for the benefit of all, not just those with their fingers in the till and those that permit it.

  17. Vote for Me says:

    An interesting turn of events.

    Civil Servants approve payments… not Ministers.

    We must also remember that in setting up the Commission, the Premier is setting a precedent that will make it harder to refuse Commissions for any transactions since 2012.

    Let the chips fall where they may.

  18. paperboy says:

    About time – two of the key variables to the success of this initiative will be who accepts an appointment and the terms of reference. Will it be independent and will it have any teeth?

  19. Mr. Premier, All of Bermuda thanks you for what you are doing, but just berfore you have this commission, was there not a call for a commission on gangs and guns, and the need to look into why 33 young black people have been murdered in Bermuda? Just thiking out loud, people first, than money, than things. We are still looking for the money.

    • Zevon says:

      And the deflecting begins. By the way, it’s ‘then’, not ‘than’.

      • Interesting, that you would rather correct me then to comment on my statement of 33 black lives lost. Is finding out where the money went, more important then the lives of our children? We had asked for a commission on this issue long before the auditor’s report.

        • Zevon says:

          So why male an irrelvant point! Are you deliberately being stupid?
          The commission is designed to find out about who has been stealing money from the country. If we could prevent that it makes life better for all of us. Including black people, because as far as I know black people pay taxes as well.

        • Zevon says:

          And if ypu wanted a commission so long ago, why didn’t it happen?
          Oh yeah. You lot have ideas all the time, and never actually do them. “we thought of that ages ago”. Your favourite saying isn’t it.

  20. PATI says:

    Anyone who may be guilty of a crime should come forward now to the police or DPP, before the Inquiry and ask for leniency in return for their testimony that may be used against others higher up the chain!

  21. UmJustSaying says:

    The biggest unanswered question is. WHERE IS THE MONEY? Looking for the TRUTH.

  22. investigator says:

    Go get them Dano!

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