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Christie Gov’T Incurred Huge Parks, Beaches Overshoot

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Former Prime Minister Perry Christie.

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WORKS and Utilities Minister Alfred Sears. Photo: Donavan McIntosh/Tribune staff

• Parties’ greatest excesses seen in election run-ups

• Resolving Authority’s ills branded as ‘high priority’

• Minister to ‘shortly’ receive report on way forward

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Cabinet minister says resolving the controversy at the Public Parks and Beaches Authority is “a high priority” with major spending overruns not confined only to the Minnis administration.

Alfred Sears QC, minister of works and public utilities, who has responsibility for the Authority, told Tribune Business he understood the process of paying out monies owed to contractors on all cancelled agreements was going well despite the existence of “so many irregularities”.

Research by this newspaper, though, reveals that cost/spending overruns at the Bahamas Public Parks and Beaches Authority date back to when it was conceived by the last Christie administration. In particular, for the fiscal year 2016-2017, the state-owned agency exceeded its approved $15m annual budget by 74 percent with total spending ultimately hitting $26.1m.

The Authority, similar to what occurred under the subsequent administration, exceeded the full-year budget within the first nine months by spending $19.48m to end-March 2017. The extent of the spending overshoot matches those years that are now being investigated, with the greatest overruns under both the Christie and Minnis administrations occurring in the run-up to general elections.

Figures showing that seemingly-excessive costs were also incurred under the last Christie administration provide added context to the Government’s current probe into the Public Parks and Beaches Authority, while suggesting that any blame cannot be solely attributed to the Minnis government even though it appears not to have fixed these ills.

However, fiscal year 2018-2019 was the only time under the Minnis administration when the Authority came in on budget, having been allocated $13.85m for the 12 months to end-June 2019. In the prior year, 2017-2018, total spending was $15.634m despite Parliament’s “approved estimates” granting it just $7m - a 123 percent overrun that more than doubled the initial Budget.

The same trend continued through the last three years of the Minnis administration. In the 2019-2020 fiscal year, the Authority was allocated a $19.1m budget but received some $6.8m in “contingency” financing from the Ministry of Finance to take total spending to $25.9m. This occurred as the initial $19.1m was used up during the year’s first nine months.

For 2020-2021, the initial $15.2m budget was already exceeded by March 2021 with some $18.557m spent. A further $13.7m in supplementary “contingency” funding was received to take the Authority’s total spend for that fiscal year to $28.9m - a 90 percent cost overrun.

And, with $9.3m of its $15.2m budget spent during the first four months of the 2021-2022 fiscal year, an accounting firm hired by the Davis administration said this “extrapolates” to a $27.9m spend for the full fiscal year - another 83.6 percent spending overrun. The Government used these findings to justify terminating all the Authority’s existing contracts as it seeks to get control of its costs.

It is unclear, though, why both the Minnis and Davis administrations persisted with under-estimating the Authority’s spending needs in the annual Budget. The former pegged the agency’s estimated future budgets at $13.68m and $11.628m for 2021-2022 and 2022-2023, respectively, despite knowing it had overshot its full-year 2020-2021 budget in the first nine months.

And the Davis administration in its supplementary Budget maintained its predecessor’s subsequent spending estimates of $15.2m for the current fiscal year; $19m for the 2022-2023 fiscal year; and $20m for 2023-2024 despite clearly already knowing the extent of the spending overruns.

The Davis administration-commissioned report into the Authority by K (Kendrick) Christie & Company Chartered Accountants concluded: “We believe that the extra budgetary allocations were fuelled more by the demand and requests for economic stimulation rather than by any real needs on the ground.”

However, the data could also be used to support arguments by Shanendon Cartwright, the FNM’s St Barnabas MP, and the Authority’s former executive chairman, that the agency has been “woefully under-funded” since its creation and “a larger conversation” is required about its role, responsibilities and how much funding it should actually receive.

Meanwhile, Mr Sears, speaking ahead of the two-day “arrears” payouts to contractors whose deals with the Authority have been cancelled, said he anticipated receiving “shortly” a formal report from its Board that will provide a road map for moving the agency forward.

With the payouts beginning today, the minister said: “I’m waiting to get a formal report. I’ve heard informally that the payouts have gone well because there have been so many irregularities. The decision was made to settle with the contractors, and I should get a report shortly from the Board.

“I’m not trying to micro-manage it. The report will address what they have done thus far, and then the way forward. I expect I will be getting that soon. The Board has just been appointed. We have to give them an opportunity, as they had to come off the bat and deal with this emergency situation.

“I’m looking forward to receiving the report with what was done in December with the payouts, and to see the way forward. The Board is reviewing, and I’m reviewing, and before I give any comments I want to make sure I have their input and feedback.”

Mr Sears did not go into what he meant by “irregularities”, but said he did not want to provide “a running commentary” on the findings by K Christie & Co, adding: “The report speaks for itself. There is no question that the findings will have to be assessed, and I will wait for the Board.

“From a governance standpoint, the questions will be the lessons to be learned and the compliance mechanism. Once I’ve gotten the report from the Board we will report to Cabinet, and Cabinet will have an opportunity to be briefed and any directions it wishes to give.” McKell Bonaby, the Mount Moriah MP, chairs the Authority’s Board.

Mr Sears said the Government is placing great importance on addressing the Authority’s woes. “It’s a high priority item because the functioning of the Authority is critical. We have verges that must be attended to, we have beaches that must be maintained, and we have parks that must be maintained, and we have other objectives that are specified in the statute which the Authority needs to deliver on and see how it can meet those objectives.

“It’s a high priority because the Authority serves a very critical role in maintaining the public infrastructure with the verges, the parks and the beaches, and also the provision of lifeguards. There are very important functions that must be carried out, and as these problems are being solved we have to be proactive. How do we move forward expeditiously to fulfill these functions?”

The report by K Christie & Co raises questions as to whether Bahamian taxpayers were getting value for money from the Authority’s spending, and whether there was sufficient transparency and accountability over the use of monies. It did not, though, levy any accusations or suggestions of fraud, corruption and any other wrongdoing.

And while the report highlighted numerous deficiencies in internal controls, practices and procedures, along with governance concerns over how regularly the former Board met, some observers will likely argue that, sadly, such weaknesses - while concerning - are par for the course at most Bahamian state-owned bodies.

The accounting firm also noted: “Contracts are assigned by the Authority to each member of Parliament to have discretionary powers over for their area.” Mr Cartwright himself voiced concerns over this, saying the Authority must move away from a “system weighted heavily on the recommendations of MPs” as to who receives work.

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