The Tribune

The government yesterday unveiled plans to ensure its gets “value for money” from the near-$400m in annual subsidies it pumps into state-owned enterprises (SOEs).

K Peter Turnquest, deputy prime minister, lamented that while some $398m in recurrent spending was allocated to SOEs for the 2018-2019 fiscal year, there was no framework to properly monitor whether these entities are spending taxpayer monies wisely.

Unveiling the mid-year budget statement in the House of Assembly, Mr Turnquest said the government will next month launch a project to evaluate its state-owned enterprises.

“Historically, successive governments have not had the effective means to evaluate the fiscal stewardship of state-owned enterprises (SOEs),” he added. “Some 15.4 percent of the government’s recurrent expenditure is allocated to these SOEs, which translates to some $398m.

“Yet, even as their share of the public purse has grown, the framework to obtain the timely and consistent information necessary to assess the value for money obtained by these SOEs simply has not been developed. We intend to change this.”

Mr Turnquest continued: “The project is expected to take place over three phases, the first being an analysis of SOEs, authorities, and other quasi-government entities and their operations, so as to provide forward looking strategies for each entity.

“The second phase will include the formation of a comprehensive strategy for cost rationalisation and cost recovery for SOEs - in line with international best practices - as well as an efficient financial and management reporting model. The third stage will include the implementation of the strategic model, and the roll out of new budgeting, accounting and performance management.”

Mr Turnquest added that there have been “significant developments” in the government’s efforts to instill prudent fiscal management via the drafting of several bills focused on strengthening governance.

“Specifically, the Public Financial Management Bill (or PFM Bill) is being drafted with assistance from the IMF’s Caribbean Technical Assistance Centre (CARTAC), and is expected to modernise and eventually replace the Financial Administration and Audit Act, 2010,” said Mr Turnquest.

“Its main objective is to provide a more comprehensive legal framework that will provide the necessary support to strengthening the oversight, management and control of public funds.”