By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Cabinet minister yesterday asserted that last year’s CARIFTA games generated a $185,503 “net surplus” even though this was only made possible by a taxpayer subsidy over four times’ higher than budgeted.

Mario Bowleg, minister of youth, sports and culture, sought to quash further debate on the cost overruns incurred by the Bahamian people in staging the regional track and field championships by telling the House of Assembly that this figure - set out in the “unaudited” accounts for the event organiser - “settles the matter of any overspending”.

However, his address neglected to point out that the CARIFTA Games Company’s financial statements - which have yet to be tested and verified for accuracy by an independent external auditor - show that this “surplus” was only made possible via a $6.433m subsidy provided by the Government using Bahamian taxpayer dollars.

Without such a contribution from the Public Treasury, the championships and event organiser would have incurred a near-$6.25m loss or net deficit. Mr Bowleg, though, took a different position by stating: “This financial report clearly indicates the CARIFTA games ended successfully in a surplus of $185,000, and not a deficit of $800,000. This settles the matter of any overspending.”

Yet the CARIFTA Games Company’s unaudited financials covering the period September 16, 2022, to end-December 2023, strengthen the argument that staging the championships cost taxpayers far more than what was originally allocated in the Government’s 2022-2023 Budget.

Mr Bowleg glossed over this yesterday, simply inviting MPs and the Bahamian public to review the Government’s relevant Budgets as the “detail of these allocations should dispel any concerns regarding financial transparency”.

However, Tribune Business previously revealed that just $1.4m was allocated by the Davis administration to finance CARIFTA 2023 even after an extra $400,000 was provided in the 2022-2023 supplementary Budget. And this year’s 2023-2024 Budget, presented last May, showed that the $1.4m allocation had been exceeded by 150 percent even before the championships started.

Some $3.5m was shown to have been spent on hosting CARIFTA in the nine months to end-March 2023, a sum more than double or $2.1m higher than the $1.4m approved by Parliament. Lynden Maycock, head of CARIFTA’s local organising committee (LOC), earlier this week told other media that the event was “grossly under-budgeted” by the Government.

Ultimately, the $6.433m spent by the Government was some 359.5 percent, or more than four times’ greater, than the originally-budgeted $1.4m. And the Auditor General’s CARIFTA report, tabled in Parliament last week, showed that the Government, which had already provided some $5.279m in funding, was forced to come up with another $1.151m to cover “outstanding bills” due to Bahamian vendors and event staff after the championships had ended.

The 50th CARIFTA’s government funding was drawn down in six tranches between November 2022 and April 2023, ranging in size from $500,000 to a high of $1.5m. Even this $5.278m proved insufficient to ensure that the event minimised its loss, the Auditor General’s Office revealed, as more money was needed.

“We have identified that the Local Organising Committee (LOC) acquired additional funding subsequent to the conclusion of the balance sheet reporting period on April 30, 2023, amounting to $1.152m,” the report said.

“Consequently, a total sum of $6.43m was receive from the Government by the end of August 31, 2023. Funds from the subsequent receipt were used to pay the LOC’s outstanding bills to vendors and outstanding salary payments.”

The Bahamian taxpayer’s total CARIFTA outlay was thus more than six times’ greater than the $1m originally budgeted, and over four times’ higher than the $1.4m allocation contained in the 2022-2023 supplementary Budget.

With the Opposition yesterday pledging to use its control of parliament’s Public Accounts Committee (PAC) to further investigate the CARIFTA and Bahamas Games spending, one source familiar with public sector financial processes, speaking on condition of anonymity, said: “The only way you can disclose a surplus is if you earn over and above what was originally budgeted and approved..

“You cannot be talking about a surplus when you have already overspent, and when there was no surplus generated.” It is uncertain how the Government funded the CARIFTA cost overruns, although it likely repurposed and reallocated monies already budgeted from other areas of its Budget, confident that the Bahamian taxpayer would be able to pick up the bill.

Michael Pintard, the Free National Movement (FNM) leader, yesterday confirmed to Tribune Business that the Opposition will pursue the CARIFTA and Bahamas Games funding and cost overruns as “part of our larger questioning”.

And Kwasi Thompson, the Opposition’s finance spokesman, confirmed in messaged replies to this newspaper that the Public Accounts Committee, which acts as Parliament’s public spending watchdog, “will still deal” with both the CARIFTA and Bahamas Games reports now they have been tabled in the House of Assembly.

Previous administrations have managed to stymie probes by the Public Accounts Committee on the basis that it can only investigate Auditor General reports tabled in the House of Assembly - a requirement which, in this case, has now been met. Mr Thompson added that the Committee “should call all relevant persons” who can provide the necessary answers.

Mr Bowleg, in his House of Assembly statement, did not respond directly to any of the issues and concerns raised by the Auditor General’s CARIFTA report. Instead, much of his presentation focused on the need to invest in Bahamian youth and sports given the undoubted social benefits that this generates.

The Opposition, though, is not letting up. “The minister is a day late, and millions of dollars short,” it blasted last night. “Today, minster Mario Bowleg had an opportunity to provide a thorough explanation to Bahamian taxpayers for the multitude of irregularities that were detailed in the Auditor General’s recent report into the CARIFTA games and The Bahamas Games....

“Unfortunately, instead of apologising for the massive overspend, the minister instead doubled down, scrambling to produce unaudited so-called financial statements long after they were demanded by the Auditor General for the required statutory review.

“We will not forget that you and your ministry had more than ample time, first to provide the information that was required by the Auditor General, and then to supply your documented responses to all of the matters raised in the draft.”

The unaudited CARIFTA Games Company accounts showed that the track and field championships incurred a $3.28m net operating loss which, together with $2.967m in non-operating expenses, had to be covered by the $6.433m taxpayer subsidy to generate the surplus touted by Mr Bowleg. This subsidy amounted to 82.8 percent, or more than four out of every five dollars, that funded CARIFTA.

The accounts said some 47.7 percent, or $637,175m, of the CARIFTA revenues were generated by corporate sponsorship “sales”, while ticket sales produced $366,072 or 27.4 percent. Levy fees accounted for the 12.3 percent balance at $164,046.

On the expense side, salaries accounted for 12.7 percent or $988,313 of the total $4.512m operating expenses with hotel accommodation generating $821,569 or 10.8 percent. TV production and competition each accounted for 5 percent of the operating expenses.

“Despite the ebbs and flows over the last 15 months from September 16, 2022, to December 31, 2023, the statement of operations shows a deficit in operations of $3.28m,” the CARIFTA Games Company financial statements said. “During the mentioned period, the Government cash injection of $6.433m shows a surplus of 40.6 percent or $3.153m in net operating income.

“Non-operating income and expenses reflects a negative $2.967m, which reduces the surplus in net operating income to 2.4 percent or $185,503 as at December 31, 2023.”