By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

BAIC’s wage bill increased by more than $600,000 over a two-year period to the point where it was equivalent to 141.5 per cent of the Corporation’s total operating revenue.

The financial statements for 2012 and 2013, tabled in the House of Assembly yesterday, show why the Minnis administration has seemingly been so eager to downsize BAIC upon taking office given that it wage bill was almost $1 million higher than total income some four years ago.

The Bahamas Agricultural and Industrial Corporation’s (BAIC) financials, which have a calendar year-end and largely cover the first two years of the former Christie administration, reveal that one expense ‘line item’ alone exceeded its total income in 2011, 2012 and 2013.

Salaries and wages rose from $2.584 million in 2011 to $2.846 million the following year, and then to $3.193 million in 2013, making for a 23.6 per cent increase over the full two-year period.

The accounts, audited by UHY Bain & Associates, revealed that BAIC sustained losses of $2.275 million, $2.594 million and $2.985 million for the same three years, prior to receiving government subsidies of between $2.5 million to $2.75 million.

The latter sum, paid by the Public Treasury in 2013, was still not sufficient to cover that year’s loss, indicating that BAIC and its bloated wage bill were already becoming a significant drain on Bahamian taxpayers.

BAIC’s accumulated deficit, or total losses over its then-32 year history, were pegged at $36.854 million at year-end 2013 which carried the standard accountant’s ‘warning’ for most Bahamian government corporations.

“Without qualifying our opinion, we emphasise that the Corporation has been continuously incurring significant loss from its operations,” UHY Bain & Associates said, adding that it was treating BAIC as a ‘going concern’ because of continued support by the Bahamian government (taxpayer).

“Net losses from operations for the year [2013] before government subvention were $2.985 million. The accumulated deficit rose to $36.853 million.... During the year the Corporation received government subventions totalling $3.314 million. Since inception, the Government has supported the Corporation in the sum of $30.409 million.”

Other ‘highlights’ of BAIC’s 2013 financials are that it had virtually written-off all its $4.546 million receivables, including $559,621 ‘due from employees’, providing for $4.449 million of this sum.

Unpaid rent totalled nearly $4 million at year-end, with the bulk - some $3.135 million - owed by tenants in its Soldier Road Industrial Park.

Elsewhere, the accounts note that the former Christie administration used BAIC as a “trustee” for funds paid out by the Public Treasury to finance the Bahamas Agriculture and Marine Science Institute (BAMSI) venture in Andros. Some $1.175 million was received in 2013 by BAIC, of which $937,005 was paid out.

And, despite BAIC’s cash-strapped position, a $2 million loan was negotiated with Royal Bank of Canada (RBC) to finance the renovation of the Corporation’s new headquarters building. Some $1.089 million of this sum was drawn by end-2013, with monthly loan repayments of $29,676 beginning in August 2014.

The financials hint at the brewing problems that led Michael Foulkes, BAIC’s current chairman, to recently tell the House of Assembly that it had “largely” failed to pay NIB contributions between 2012-2017 despite deducting these from employee salaries.

He lamented the Corporation’s “dire financial straits” with outstanding debts standing at $3 million - including $1 million owed to the National Insurance Board (NIB). He added that its workforce had near-tripled during the Christie government’s tenure, from 77 to 200, the start of which was captured in 2012 and 2013.

Mr Foulkes, during his mid-year Budget contribution, accused the former administration of “gross mismanagement” and “lack of fiscal responsibility” with regards to BAIC.

Among its outstanding commitments, he added, was the $300,000 owed to Bahamas Power and Light (BPL). Mr Foulkes told Parliament that while BAIC’s solar system had been projected to save the Government 40 per cent on energy costs, it had no batteries or tie-in to the grid.

“The Corporation’s group medical coverage is in a suspended status, but we are working towards the restoration of coverage soon,” Mr Foulkes said.