HAMILTON, Bermuda, Nov 19, CMC — Bermuda’s Auditor-General has issued a damning report in which she says public officials violated the rules on the spending of taxpayers’ money so often that it became the “norm for which there are no consequences”.
Finance Minister Bob Richards, reacting to the report, said the public had “every right to be upset” by Heather Jacobs Matthews’ revelations.
The Auditor-General said the government’s own official financial instructions were regularly disregarded between 2009 and 2012 — when the now-opposition Progressive Labour Party (PLP) was in power.
She uncovered US$78.8 million worth of contracts in 2010 and 2011 which were not put out to tender, including $18.1 million in the now-defunct Department of Tourism.
In 2010, she found a failure to comply with financial instructions, mainly involving the Ministry of Public Works, in relation to a number of capital projects worth more than US$35 million. There was US$5 million worth of spending across the government in 2010 without signed contracts or agreements.
Pointing out that the instructions exist to “ensure that public money is managed effectively for the intended purpose”, Matthews said those who signed off on spending without following the rules “should be held accountable for breaches of compliance”.
She said her office requested documents to support the spending of US$35.5 million on capital contracts and purchases but there were no such documents for US$5.2 million of the total figure.
“Of the remaining $30.3 million, many failed to comply with the applicable purchasing and approval standards,” Matthews wrote in her report. “The majority lacked the required approval of cabinet, did not have agreements or contracts and/or did not follow the basic tendering procedure.”
Her report reveals that millions of dollars were spent without the prior approval of the cabinet, even though financial instructions require all contracts above $50,000 to get such approval.
The Auditor-General, who is stepping down from her post next year, said the tender process for the commercial courts project was compromised, with the contract eventually going to a bidder who had been initially disqualified due to an invalid application.
Richards, who is also Deputy Premier, said “the report speaks for itself. It’s good to have it revealed to the public, because the Auditor-General has credibility.
“It’s certainly a very, very low performance in so far as the government is concerned, and it speaks to the reason why we’re in the hole we’re in financially.”
While claiming to be unsurprised by the findings detailed within, Richards added: “It’s the public’s money, and we’re just trying to do the best we can to look after it as though it were our own.
“We’ve had to be much more disciplined as far as spending is concerned, and to try to rein the beast in. We’re having some success in doing that.”
Shadow Finance Minister David Burt was not immediately available for comment.
The One Bermuda Alliance government inherited a national debt of US$1.4 billion after it defeated the PLP in the December 2012 general election, the PLP having ruled the country for 14 years.
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