Minister Furbert On Efficiency Committee Report

[Updated] “The cost to the tax payer for the work of the Efficiency Committee was approximately $130,000, however with the improvement in efficiency and better controls, the Committee was able to obtain revenue for the tax payer over $12 million,” Minister for the Cabinet Office Wayne Furbert said.

Speaking in the House of Assembly on Friday, Minister Furbert said, “This Committee met 32 times between the dates of 13 March 2018 and March 31, 2019. Its purpose and remit was to review the functioning of all government departments to recommend improvements in the efficiency of operations. ”

The Committee consisted of Minister Wayne Furbert [Chairman], Cherie-Lynn Whitter [Permanent Secretary of Government Reform], Tina Tucker [Director of Budget], Ianthia Fox [Senior Management Consultant], Edward Ball Jr [BPSU Representative] Glenn Simmons [BIU Representative], Senator James Jardine, Richard James, and Karamoko Darrel-Dickens [Government IT Representative].

“At the Office of the Tax Commissioner, the department charged with administering the collection of the taxes and undertaking duties in accordance with legislative requirements, the Committee observed significant deficiencies in the area of the adjudication of stamp duty, collection, staffing levels, as well as IT infrastructure,” the Minister said.

“The Committee identified processing deficiencies that had resulted in $354,972 worth of expired, uncashed checks. One check dated as far back as 2006. Further, ‘Un-adjudicated’ stamp duty on some 1,590 property conveyancing files highlighted a huge backlog of work with the resulting loss in significant amounts of revenue for the Bermuda Government, representing in the region of $8 million. What’s more, some 318 files dated as far back as 2013.

“With the Committee’s intervention, I am pleased to report that the OTC has now recovered a total of $315,578 of the $354,972 expired, check balance. Further, of the $8 million of Un-adjudicated stamps, the OTC has now received $3,859,731 in cash, and a further $2,951,238 has been billed but not yet collected.

“Following a series of meetings with the Tax Commissioner and his management team, which included the review of extensive data points, the Committee advanced recommendations that to date have resulted in the addition of 4 temporary resources and the collection of over $3 million of old debt.

“Also, as a result of the Committee recommendations, the OTC will now recoup about a $800,000 dollars paid in credit card processing fees which has historically been paid out of the consolidated fund.

“The cost to the tax payer for the work of the Efficiency Committee was approximately $130,000. However, with the improvement in efficiency and better controls, the Committee was able to obtain revenue for the tax payer over $12 million dollars, a return of investment of over 9,130%.”

Minister Furbert added that the Committee made 93 recommendations covering a wide range of Departments, which included 24 recommendations for immediate change, and 69 recommendations for medium to long term changes.

Following a question from the OBA’s Pat Gordon Pamplin, Minister Furbert explained that breakdown of costs included $5,000 per month for him as Chairman, and $2,000 a month remuneration for the members.

Later during the sitting of Parliament, OBA MP Michael Dunkley mentioned the payment to Minister Furbert for his work on the Efficiency Committee, saying, “We learn that the Junior Minister at the time was paid $60,000 to conduct work during this Efficiency Committee report.

“The member at the time was an MP and he was Junior Minister within Finance,” Mr Dunkley added, “And on top of that was getting paid $60,000 to work on the Committee.”

Update June 3, 1.50pm: As a point of clarification, while it was stated members received $2,000 per month, it appears not all did, as BPSU Representative Edward Ball has confirmed he “did not receive any public funds of $2000 per month as a member of the Efficiency Committee,” and served on the Committee pro bono; as in for free.

The Minister’s full statement follows below:

Mr. Speaker,

I rise this morning to provide this Honourable House with the outcome of work undertaken by the Efficiency Committee.

Mr. Speaker, Honourable Members will recall that in March 2018 The Premier and Minister of Finance appointed The Efficiency Committee, under the authority of Section 61[4] of the Bermuda Constitution. This Committee met 32 times between the dates of 13 March 2018 and March 31s, 2019.

Its purpose and remit was to review the functioning of all government departments to recommend improvements in the efficiency of operations. This provided an extensive scope for the Committee to structure its approach.

Mr. Speaker, the Committee consisted of the following individuals:

• Wayne Furbert – Junior Minister of Finance [Chairman]
• Ms. Cherie-Lynn Whitter – Permanent Secretary of Government Reform
• Ms. Tina Tucker – Director of Budget
• Ms. Ianthia Fox – Senior Management Consultant
• Edward Ball Jr – BPSU Representative
• Glenn Simmons – BIU Representative
• Senator James S Jardine
• Richard James
• Karamoko Darrel-Dickens – Government IT Representative

Mr. Speaker, the Committee determined to focus on those areas where the greatest value could be achieved.

Its work included reviews of the Office of the Tax Commissioner, Registrar of Companies, Social Insurance, Office of Project Management and Procurement, overtime and wages in various Departments, Boards and Committees, and cross-Ministry expenditure on materials and supplies, to name a few.

Mr. Speaker, at the Office of the Tax Commissioner, the department charged with administering the collection of the taxes and undertaking duties in accordance with legislative requirements, the Committee observed significant deficiencies in the area of the adjudication of stamp duty, collection, staffing levels, as well as IT infrastructure.

The Committee identified processing deficiencies that had resulted in $354,972 worth of expired, uncashed checks. One check dated as far back as 2006. Further, “Un-adjudicated’ stamp duty on some 1,590 property conveyancing files highlighted a huge backlog of work with the resulting loss in significant amounts of revenue for the Bermuda Government, representing in the region of $8 Million. What’s more, some 318 files dated as far back as 2013.

Mr. Speaker with the Committee’s intervention, I am pleased to report that the OTC has now recovered a total of $315,578 of the $354,972 expired, check balance.

Further, of the $8 million of Un-adjudicated stamps, the OTC has now received $3,859,731 in cash, and a further $2,951,238 has been billed but not yet collected.

Mr. Speaker, Parliament should be made aware that the Efficiency committee identified a significant shortage of staff due to the hiring freeze by the former Government. This had a significant impact on Auditing Businesses to ensure that they were paying payroll tax and collecting accounts receivable.

Following a series of meetings with the Tax Commissioner and his management team, which included the review of extensive data points, the Committee advanced recommendations that to date have resulted in the addition of 4 temporary resources and the collection of over $3 Million of old debt.

Mr. Speaker, the support of the Efficiency Committee to the Office of the Tax Commissioner has resulted in the strengthening of administrative processes relative to the adjudication, and collection of taxes with that Office now in a position to complete a full review of its systems requirements and take the necessary steps to maximize efficiency through the further automation of processes.

Also, as a result of the Committee recommendations, the OTC will now recoup about a $800,000 dollars paid in credit card processing fees which has historically been paid out of the consolidated fund.

Mr. Speaker, the Committee’s work at the Office of the Tax Commissioner alone has had a multi-million dollar impact on the consolidated fund.

Mr. Speaker, at the Office of Social Insurance, the Committee reviewed, in consultation with the Director, the matter of outstanding accounts receivable for Social Insurance which as at November 2018 amounted to $44.8 Million of which, at the time some $28.9 million was over 120 days old.

The Committee has advanced a raft of recommendations to address compliance, collection, and IT infrastructure issues at the Office of Social Insurance to arrest this long outstanding debt collection issue. The Committee highlighted the synergy between the Pension Commission and the Social Insurance Department, and have advanced a recommendation that could result in a joint Board to oversee both, as there could be some cost savings in doing this.

Mr. Speaker, the Efficiency Committee worked with the Department of Immigration, other relevant government departments, the Chamber of Commerce Real Estate Division, and a representative from the local legal fraternity to review the processing of Alien Licenses for the purchase of Bermuda property. It had long been advanced that extended processing delays negatively affected sales and as a consequence potential buyers had lost interest and were terminating purchases. The processing impediments represented a loss of revenue to the Government.

Mr. Speaker, based on recommendations from the Efficiency Committee, steps have now been taken to automate the circulation of Alien License files within the Government with a view to reducing the processing time considerably for properly executed submissions.

Further discussions with Realitors lead to a more progressive way of calculating Leases which Government will now receive millions of dollars of additional revenue,

Mr. Speaker, other Efficiency Committee recommendations related to procurement of material and supplies has reignited the drive towards framework agreements for the Government and work is currently in channel via the Office of Project Management and Procurement to consolidate Government’s buying power across a number of areas.

It is expected that the Office of Project Management and Procurement will complete an evaluation of the purchasing of goods and services throughout Government and make recommendations for cost savings to secure the best price and further, to evaluate and implement short, medium and long-term goals and opportunities for cost savings.

Mr. Speaker , the Committee made 93 recommendations covering a wide range of Departments. These included:

• I.Twenty-four [24] recommendations for immediate change;
• II.Sixty-nine [69] recommendations for medium to long term changes.

Mr. Speaker, the cost to the Tax Payer for the work of the Efficiency Committee was approximately $130,000. However, with the improvement in efficiency and better controls, the Committee was able to obtain revenue for the Tax Payer over $12 million dollars, a return of investment of over 9,130%

Mr. Speaker, the Committee remains grateful for the candor and keenness shown by the public officer with whom we met. All expressed an appreciation for the support of the Committee in advancing collaborative recommendations to address long outstanding issues.

Mr. Speaker, in closing, I would like to thank those members of the Efficiency Committee for their time and efforts in this venture, and for their valuable contributions to this process. Their advice was very much appreciated.

Thank you, Mr. Speaker.

Consolidated report of the Efficiency Committee for March 2019 follows below [PDF here]:

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