By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The government's financial management systems remain "below global standard" and have seen "limited improvement", scoring 80 percent below maximum in their last assessment.

An Inter-American Development Bank (IDB) report on The Bahamas' "fiduciary systems", accompanying the 2018-2019 country strategy for this nation, backs assertions by KP Turnquest, the deputy prime minister, that a $33m project to overhaul an area overseeing fiscal consolidation efforts had been "floundering".

Using its PRODEV Evaluation Tool, the IDB said The Bahamas had secured "a marginal overall improvement" in the quality of its financial management systems between 2009 and 2013. However, this nation's score had only improved from 0.8 to 0.9 out of a maximum "five" based on its performance across five areas.

These were listed as Results-Based Planning; Results-Based Budgeting; Public Financial Management; Programme and Project Management; Monitoring and Evaluation. The Bahamas fared somewhat better on "public financial management", where its score improved from 1.9 in 2009 to 2.3 in 2013.

"The current Public Financial Management technological platform is outdated, lacks integration, and difficult to maintain," the IDB report said, while referring to the "new business model" that the government intends to adopt.

The Minnis administration has committed to transforming The Bahamas' governance and fiscal management systems through wide-ranging legislative reform, which includes the implementation of an e-procurement platform designed to address tendering system weaknesses identified by the IDB.

"Budget processing has seen limited improvement during the previous country strategies," the IDB report revealed. "The absence of a long-term vision articulated with medium-term fiscal framework, sector programmes and the Budget remain a concern as it is not suited to focus on results achievement.

"Ministries plan their expenditures with some certainty, but cash flow planning is limited. Payroll and personnel systems are not integrated..... Accounting and reporting systems, and practice, fall below international standards in terms of presentation and disclosure.

"Currently, the Government of the Bahamas has established a concept paper and road-map for implementing accrual accounting in accordance with international Public-Sector Accounting Standards (IPSAS), which envisions completion by 2023. Implementation is being incorporated within the [$33 million] loan operation."

As for public procurement, the IDB said: "The Bahamas does not have dedicated legislation that governs public procurement. The legal framework emanates from subsidiary legislation, in this case the Financial Administration and Audit Act (FAAA). This situation challenges a co-ordinated approach, as a set of suitable rules for planning, awarding and monitoring government contracts is missing.

"The Bahamas' current public procurement legislation and regulation is considered below international standards and practices. There is an absence of consolidated unifying instruments in public procurement at the statutory level with a clear hierarchical structure, able to promote uniform practices of high standards.

"Consequently, they do not cover a full range of issues needed for the functioning of a modern government public procurement system. Without a designated entity to take overall responsibility for the development and functioning of the system, and no feedback/reporting mechanisms, it is unclear how decisions with respect to rules and practices are made and informed."

Besides establishing a Public Procurement Unit, the Government is also implementing a public sector-wide e-tendering system from BIP Solutions, which the IDB branded as "robust" and in line with the legislative reforms. This should be completed in 2018.

Mr Turnquest reaffirmed the Government's commitment to modernise its financial and information management systems during the 2018-2019 Budget, while blasting the former Christie administration for failing to move the $33 million IDB-financed project forward.

Describing the initiative as "floundering up until last year, and producing meagre tangible results", Mr Turnquest said: "The objective of this exercise is to enhance the capacity of the Ministry to produce high quality information for evidence-based policymaking, as well as improve the ability to better allocate and track public funds.

"As well, the Ministry is moving to the adoption of new budgeting and accounting software and standards, and the introduction of accrual accounting and the systems that support it. Also in development is the implementation of a new, modern Chart of Accounts that is fully compatible with international standards.

"As an initial step to avoid the build-up of future arrears, the Government is enabling accrual accounting with the planned introduction of International Public Sector Accounting Standards (or IPSAS) for government bookkeeping and reporting that will provide increased visibility into outstanding cash requirements and facilitate cash planning. Here again, we are committed to bringing the Bahamian government up to modern and international standards."