Column: COI Report, Is Future More Important?

[Opinion column written by Jeremy Deacon]

The Commission of Inquiry report has received a lot of attention with much of the focus placed on what happened in the past but, in a way, is the future more important?

While the Commission reported at length on a series of large infrastructure projects undertaken while the PLP was in Government, it also reported on attempts to tighten oversight.

It acknowledged that some good work had been done in this respect but it also pointed to recommendations made years ago by the SAGE Commission that had not been acted on.

Legislation introduced years ago and designed to tighten oversight has also, said the Commission, not been enacted. A specialist oversight department remains under resourced, it said.

In this piece, I’ve listed a few examples of opportunities to tighten oversight that were missed or possibly ignored. It has not always been possible to put every piece into exact context as that would have meant reproducing large swathes of the report, but hopefully you will get the idea.

The Commission said it was clear that efforts to tighten oversight had been made:

“Turning to the current position and safeguards for the future [TOR 7 and 8], we were heartened to find clear evidence that in recent years the prior administration, the current Government and the Civil Service have taken positive steps to remedy the previous situation where the violations we have identified had occurred.

The process began in early 2010, when the then Minister of Finance, the Hon. Ms. Paula Cox JP, instructed the consultancy firm KPMG to carry out an analysis of six selected contracts, some large, some small, which had been concluded before that date.

Following on from KPMG’s Report, and other research, various changes were implemented including: the Internal Audit Act 2010 and two Good Governance Acts, dated 2011 and 2012 respectively, under which a new government department was created in 2012–the Office of Project Management and Procurement [OPMP].”

But the Commission report continued:

“We express disappointment with the slow rate of progress that there has been in fully implementing these measures, particularly with regard to OPMP. It is yet to be fully established and delay may be due to lack of political will or to bureaucratic reluctance to embrace change; see Section 7.”

It was considered important enough that new laws were created, but a potentially key oversight office, the OPMP, is still not functioning properly, more than four years after its creation.

In another part of the report, the Commission notes:

“However, and this is important to note, the Act was amended in 2011 under Good Governance legislation, to allow the Minister of Finance to give FI statutory effect and thus subject to breaches of criminal prosecution where there has been a failure to comply “without reasonable excuse”.

The Commission understands that this regulatory power has yet to be invoked and FI have not yet been made statutory regulations and any breaches thereof an offence.”

FI refers to Financial Instructions and without going into detail of what they are, from this exert of the Commission’s report it is clear that they are an important element of the oversight process.

But the necessary regulatory power has not been invoked. What, then, does a breach of financial instructions merit? Why has the power not been invoked?

Later in the report, there is another mention of the OPMP:

“The latter provision recognises the introduction of the Office of Project Management and Procurement [“OPMP”] in October, 2011. The OPMP was a key part of the Good Governance Act 2011 [made effective in October of that year].

In short, its purpose was to add another layer of independent oversight of Government expenditure and of capital projects in particular, so as to ensure compliance with Government policies and procedures.

The legislation required the production of a Code of Practice for Project Management and Procurement that would be the basis upon which the OPMP would operate and evaluate expenditure.

“The code would also be employed by all public officers concerned with obtaining goods and services for the Government. However, a code in this regard has yet to be adopted and implemented, although a draft was recently made public for review and comment. [For a further discussion on the OPMP see Section 7: Current Safeguards.]”

So not only is the OPMP still to be fully established, there isn’t even a Code in place that would help civil servants “operate and evaluate expenditure”.

Stay with me, as the next part is quite lengthy, but when you reach the end you will understand its importance. Even the Commission uses the word ‘irony’.

“The Commission was keen to note that such a possibility, and what to do, was once addressed in the 2002 Ministerial Code of Conduct. The relevant section read:

“12.3 Accounting Officers have a particular responsibility to see that appropriate advice is given to Ministers on all matters of financial propriety and regularity. If a Minister in charge of a Department is contemplating a course of action which involves a transaction which the Accounting Officer considers would breach the requirements of propriety and regularity, he will record in writing his objection to the proposal and the reasons for that objection. If the advice is overruled, the matter should be brought to the attention of the Auditor General. If the Minister decides nonetheless to proceed, the Accounting Officer will request a written instruction to take the action in question and will send the relevant documentation to the Auditor General. A similar procedure will apply with respect to the Public Accounts Committee if the Accounting Officer wants to ensure that the Committee will not hold him personally responsible for the action being taken.”

This Code was relevant and in force for the three year period under review. Cab Sec Binns was asked why he did not avail himself of this provision, in what appeared to the Commission to have been an appropriate case, during his tenure as PS of W&E. The simple answer was that this particular provision was in the Ministerial Code and not in the CECC to which civil servants would refer.

The further irony, the Commission learned, is that this provision has been dropped completely by the current Government from the new Ministerial Code of Conduct which was revised and published in April 2015.

Cab Sec Binns explained that the new Code was the work of the Cabinet and while “advice and feedback” was sought from the Civil Service on the revised Code, he had “no idea” why the provision was dropped from the new Code of Conduct for Cabinet Ministers.

It has, however, also been suggested that the use of any such provision could seriously impair the relationship a PS has with a Minister – and as a result there may be a reluctance to invoke the option by a PS. While understandable, the Commission would regard such action as a last resort when all other options have failed.

Such provision and action should be regarded for what it offers: the ultimate check on possible inappropriate or wasteful use of public money. It also gives civil servants the opportunity to record their position without refusing to carry out an instruction of a Minister.”

Remember that other Commission, the SAGE Commission? The Commission of Inquiry report adds:

“The Commission further notes that this issue was a matter of concern and recommendation of the SAGE Commission. In its Report, the SAGE Commission disclosed that revised versions of both the Ministerial Code of Conduct and the CECC [renamed “Public Service Code of Conduct”] were drafted in 2012 to address shortcomings, but were not implemented due to the change in Government.

The SAGE Commission commented in its Report: “If implemented, these rewritten procedures would go a long way to improving financial accountability and documentation of decision-making.”
This Commission agrees.”

In another mention of the SAGE Commission, the CoI states:

“The Commission also endorses the recommendation of the SAGE Commission that parliamentary accountability be enhanced by the formation of three Joint Select Committees, charging them with the responsibility of monitoring the work of the various Government Ministries between them on an on-going basis.”

On the airport deal, the Commission’s report says:

“There appears to be no express provision or provisions in Financial Instructions that address proposed public private partnerships. The OPMP played a more limited role than might have been expected had it been fully staffed and resourced at the time.”

Let’s not forget, the airport development is not the Island’s first PPP. The new hospital acute care wing was also built via a PPP, so we have to assume that there were no provisions in Financial Instructions for that PPP either.

The last item I want to point out from the CoI’s report is this:

“We would also endorse the Auditor General’s recommendation of an oversight committee on the retention of consultants, whether individuals, foreign or local, as well as companies.”

Do you remember the time period covered by the CoI? No? Well, let’s just say that it was not recent. The Commission of Inquiry also makes these recommendations:

“In Section 8 [Recommendations] we list the following:

• Ensure that Ministers and Senior Civil Servants have More Effective Relationships
• Improve Transparency and Strengthen Safeguards against Conflicts of Interest
• Improve the Effectiveness of Financial Instructions
• Clarify Accounting Officer Responsibility
• Strengthen the Offices Responsible for Safeguarding the Public Purse
• Enhance Parliamentary Oversight of Government Spending
• Hold Civil Servants Responsible with Regard to ‘Ownership’ of Responses to the Auditor General’s Reports
• Increase Transparency and Make Government’s Financial Reporting More Timely
• Urgently Review Personnel and Processes in the Civil Service
• Hold QUANGOS More Responsible”

With respect to the Commissioners, aren’t a lot of these common sense?

As the Commission points out, a lot of good work on good governance has been achieved, and a lot of credit for this must go to former Premier Paula Cox, but the examples I have laid out here suggest that many opportunities to further strengthen the system have been missed and that a lot more needs to be done.

Is this a lack of political will? Have changes in work practices been stonewalled by competing interests? I don’t know the answer.

The Commission’s report wholly vindicated reports by the Auditor General and it should be embarrassing to the PLP [indeed they have embarked on their usual tactics of deflection.]

The OBA cannot escape censure either, however, as a lot of what I have mentioned here has fallen under their watch and it is only now, after the CoI report has publicly laid bare some of the issues, that some action is being taken: the OPMP is to get another $700,000.

In my opening paragraph I asked whether something more important had been overlooked. It has: the future. What happens next? Will the CoI’s recommendations be implemented? Will the issues identified in its report be addressed and addressed in a timely manner?

Can the electorate be absolutely confident that the checks and balances needed to safeguard the public purse are going to be in place and be effective and enforceable?

I heard a report that the Premier was setting up a Cabinet committee to look at the CoI’s report. Personally, I’m not a fan of committees, it’s like death by a thousand cuts.

But it is a start. Let’s hope it is not the end as well.

- Jeremy Deacon is a 30-year veteran of the media industry in Bermuda and the UK. He runs award-winning public relations company, Deep Blue Communications, and also engages in freelance journalism for publications in Bermuda and overseas. 

-

#BermudaPolitics #CommissionAuditor #JeremyDeaconColumns #OpinionColumns

Category: All, News, Politics