House Passes FAAA

Prime Minister and Minister of Finance Hubert Ingraham made that quite clear in the House of Assembly yesterday as he opened debate on the new Financial Administration and Audit Bill – a proposed piece of legislation that seeks to modernise the country’s economic, social and financial landscape and bring it in line with today’s realities.

The initial bill was passed almost four decades ago.

Keeping in line with the IMF’s Code, the bill’s proposals are four-fold:

Roles and responsibilities must be clear

The budget process must be open

Public financial information must be readily and openly available

The integrity of the process must be assured.

"These objectives translate into a number of proposals to enhance accountability and transparency in public financial administration in The Bahamas," Prime Minister Ingraham said.

"These may be characterised as measures directed toward improvement in the administration process, enhancement of accountability and reporting and strengthening the element of control."

According to the prime minister, administrative improvements call for data in electronic form.

"We come from an age where people are still writing receipts by hand in government department and agencies…It is specified that ledgers and cash books may be held electronically in a database file…It is amazing how much space government departments [use] to store paper," he said.

"…As well, provision is made to allow for the removal of any of the government’s dormant book accounts from the general ledger and the writing off, in whole or in part, of any debt or obligations due to the government or any claim by the government."

There is also a provision for the Contingency Fund, has some $20 million set aside each year.

Mr. Ingraham said, once passed, the bill would ensure that provision for the emergency fund is modified so that is cannot exceed five per cent of the recurrent expenditure, as opposed to an absolute dollar amount.

The proposed legislation also paves the way for a principal accounting officer (PAO), who would control expenditure and/or collect and account for revenue.

The PAO would replace both the accounting officer and the principal receiver of revenue.

The prime minister, however, admitted that from time-to-time there are disputes between the minister and the permanent secretary.

The bill seeks to deal with this when it comes to financial matters.

"If a difference of opinion arises between a principal accounting officer and the minister responsible, the principal accounting officer shall inform the minister in writing of his view and the reason for it and recommend a consultation with the minister of finance," the prime minister explained.

"It’s going to get away from the officer saying ‘I did as the minister told me.’ The minister could only give the officer lawful instructions. If he gives unlawful instructions, the officer has no responsibility to carry it out from any minister, the minister of finance including the prime minister."

However, Mr. Ingraham went on to explain that if the minister gives contrary instructions in writing that are lawful, the principal accounting officer should comply and inform the minister of finance in writing.

"Once the directions have been carried out, copies of the correspondence setting out the two points shall be forwarded to the auditor general. A difference of opinion between the financial secretary and the minister shall be referred to the prime minister," he said.

Seconding the bill was Sea Breeze MP Carl Bethel, who said the proposed legislation would give foreign investors even more incentives to do business in The Bahamas.

But, while Fort Charlotte MP Alfred Sears commended the government for seeking to modernise a critical area in the administration of public financing, he said there are several ways it can do so more effectively.

"The law needs to be modernised to deal with the reality of our contemporary society so that the public can have trust in the financial administration of the state," he said.

But while this is a good beginning, I would like to think we could have gone further."

Despite this, the FAAA was passed in the House of Assembly last evening and is off to the upper chamber, along with the Business License Act.

The House resumes at 10:00 a.m. today.