The Minister of State in the Ministry of Finance, Senator Christopher Coye’s agreement that there is a need for a “value audit” of the public service is welcome, Business Senator Hon. Kevin Herrera told The Reporter in a recent interview.
“I think it is a good thing. If we are paying emoluments to public servants, we want to know that the money is being used efficiently,” said Herrera. “Emoluments and pensions account for roughly 40 percent of recurrent revenues of the Government. Therefore, any such value or desk audit is welcome.”
Herrera explained that he is hoping for more than just “desk” audits, which would be aimed at the staffing to ensure that there are no so-called “ghost” workers in the public service. He explained that there should also be “efficiency audits” for projects and other initiatives financed by taxpayers’ money directly or indirectly.
This view is also shared by the Public Service Union (PSU). “We most definitely would welcome such an audit,” PSU President Dean Flowers told The Reporter. “Based on information we have received over the years, there appears to be a significant number of ‘ghost’ workers in the system. The audit will be useful to weed those out.”
At last week’s Senate debate, Senator Coye responded to Herrera’s presentation:
“I want to thank the Honorable Senator Herrera for his comments and contributions. [The comments were] specific to the budget; specific to issues that are certainly worth addressing. … Further to that, whether we call it ‘desk’ audit or ‘value’ audit, or even just an internal review, I think it would be very useful to make sure that we are properly accounting for what use of these scarce resources are being made.”
The points raised by Senator Herrera are categorizable into two broad headings: variance analyses of Fiscal Year 2022/23 spending relative to what was budgeted and a prospective look at certain curious increases in budget allocations for the upcoming fiscal year.
Speaking of past spending, while some variance is expected in any budget process, international convention usually considers variances (i.e., the difference between actual spending and what was budgeted for) of 10 percent or more to be worthy of investigation. According to Herrera, 15 out of 25 major budget headings had budget variances outside that 10-percent threshold.
Nine of those programs had "unfavorable" variances, meaning they overspent their budgets. Herrera zeroed in on the nine that overspent by variances above 10 percent, with the Ministry of Rural Transformation, Community Development, and Labour being as high as 36 percent, spending more than $5.4 million over what was originally estimated.
Among this group, the average overspending was about 17 percent for FY 2022/23.
On the under-spending side, several departments and ministries spent notably less than was budgeted. The average “favorable” variance is -12 percent. Here, Herrera made the point that if this type of thing was being better monitored, then there would have been less need for the government to have come to the National Assembly for supplementary allocations. In Fiscal Year 2022/23, the numbers show that nearly $60 million in Recurrent Expenditure was under-spent. That’s monies that could have been used for needed capital expenditure, explained Herrera.
If reallocated, that is $60 million could have reduced the need for at least some of the supplementary appropriation acts tabled last fiscal, a year in which four Supplementary Acts totaled more than $180 million.
In reference to the “desk” audit, multiple parliamentarians over the years have raised concerns regarding the elusive line item dubbed “wages to unestablished staff.”
For his part, Herrera said, “The overtime, the allowances, and the huge jumps in the ‘Wages to Unestablished’ staff certainly alarm me. Perhaps we should look a little closer into it.”
The desk audit, therefore, is to assess whether or not the Belizean taxpayers are indeed getting value for money and verify whether persons are actually filling the positions reported or if there are instances of inflated estimates. This is an activity that the Public Service Union (PSU) and other unions have been calling for over the years.
Flowers reminded that there are reports of files in government offices for certain individuals that clearly shows no sign that there is an actual person employed. Apart from the letter of appointment, there are no signs of activities associated with someone actively working in an organization.