Acting Financial Secretary Jeremiah Frett and his predecessor Glenroy Forbes were questioned on Tuesday by the Commission of Inquiry about a topic they know well: money and how it was spent. Mr. Forbes served as financial secretary from 1991 to 1998 and again from 2002 to 2005. He was appointed for a third time in 2017 and served until January of this year, when he was replaced by Mr. Frett.
On Tuesday, the pair appeared separately before the COI and responded to many of the same questions.
Assistance grants
Both secretaries agreed that the House of Assembly assistance grants programme, in which ministers are allocated up to $150,000 todistribute their constituents, is typically administered through the HOA and disbursed through a purchase order to the Treasury Department, headed by the accountant general, rather than the Ministry of Finance.
However, COI counsel Bilal Rawat asked both men for more details about this process.
“If the accountant general had a concern about a particular charge under this programme, it would be brought to your attention?” Mr. Rawat asked Mr. Forbes.
Like Mr. Frett, who appeared earlier, Mr. Forbes agreed that it would.
Asked whether that happened during his time as financial secretary, Mr. Forbes said, “I don’t recall.” Mr. Frett had responded similarly.
In his hearing with Mr. Forbes, Mr. Rawat continued by asking about the 2014 auditor general’s report on the assistance grants programme.
“The critical key concern was that whether someone should get a grant was essentially at the sole discretion of the minister, and that there were a number of deficiencies and inconsistencies in the way these programmes were being administered,” the counsel said.
Mr. Forbes, like Mr. Frett, acknowledged that he was aware of the report.
Mr. Rawat continued, “Let’s assume that the House of Assembly assistance grants have a particular budget. Can it overspend that
budget and then make good the shortfall by having a schedule of additional provision that essentially comes later after the money
has been spent, and makes good the budget, or fills the gap?”
Mr. Forbes replied, “There are instances where the minister of finance can advance monies [under the] Appropriation Act, but then he is required to regularise that particular spending as soon as it’s practical for him to take a resolution to the House of Assembly. So, yes, again, that can happen.”
Asked similar questions, Mr. Frett said he did not know who directly distributes the funds to the applicants as he was not involved in that process.
“That’s not a function of the Ministry of Finance,” he said.
Mr. Frett agreed that members may end up approving grants in excess of the money originally budgeted. In that case, he explained, the additional expenditure goes to Cabinet, then the House, for approval.
“In most instances it may have been money already spent,” Mr. Frett said.
Revised budget
Mr. Rawat then called Mr. Frett’s attention to the revised budget of 2018, which contained two items named in an HOA resolution for recurrent expenditures that he said “will capture any additional monies that have been put into the assistance grant programme.”
Mr. Rawat explained, “One is transportation and one is medical
expenses.”
The counsel described the transportation item as $10,000 for “additional funding approved for Leader of the Opposition Honourable Andrew Fahie to settle outstanding commitments.”
He described the “medical expenses” item as $66,000 for [former Premier] “Ralph O’Neal to settle outstanding National Health Insurance invoices.”
However, “those details don’t fall within the assistance grants programmes, do they?” asked Mr. Rawat.
“I don’t know the details of these expenses here,” Mr. Frett said. “Assistance grants can be given to a representative person to use however they choose to.”
It would be “unfair,” he added, to say the expenses were outside
the assistance grants policy.
Petty contracts
Mr. Rawat also asked Mr. Forbes about his views on petty contracts, including Auditor General Sonia Webster’s repeated criticism of government’s habit of awarding several of them to complete a single major project.
“The approach that I’ve taken was that anything that is over $100,000, that is a major contract,” Mr. Forbes said. “If you’re going to deviate from the law, you have to show evidence for doing so. However, there are instances where petty contracts can be very useful.”
He added that he had issued circulars to “every single accounting officer” making it known that “there shouldn’t be evidence of you offering multiple contracts with any one operator.”
Auditor reports
The financial secretaries also were questioned about delays in the provision of financial statements required by the auditor general, which between 2008 and 2011 averaged 22 months, according to the commission.
For the year ending 2012, Mr. Rawat said, the accounts reached the auditor general on Jan. 12 2017, shortly before Mr. Forbes returned to office.
“You inherited a situation where there was a long gap between the year end and financial statements reaching the auditor general,” suggested Mr. Rawat.
Mr. Forbes said he was invited back to the financial secretary position by-then Premier Dr. Orlando Smith, and after taking office, “I discovered that there had been quite a backlog of annual reports. To my dismay, actually, I can report based on my recollection that the last report that was submitted prior to me getting there would have been a 2011 report.”
When he took office, he said, one of his goals was to comb through the backlog of reports.
Mr. Frett said in his testimony that reestablishing the Internal Audit Advisory Committee — which hasn’t existed since 2016, though it is supposed to oversee the government’s Internal Audit Department — was a “lower priority” among the other demands on his time.
“We got to the point where we were about to suggest persons for
that particular role, who can serve on a committee, but with all the intervening circumstances I think we didn’t get back to that particular
issue,” he said.
Stimulus grants
Mr. Rawat also asked about claims from Internal Auditor Dorea Corea that she was not able to provide monthly reports for the Covid-19 economic response plan as required by the premier, in part because she was not provided with the necessary information from the Ministry of Finance.
In his response, Mr. Forbes explained, “My evidence is that I don’t
think there was any deliberate effort to deny the internal auditor the information that she requested. It’s in the interest of the Ministry of Finance to make sure that they get whatever information they need to carry out their work.”
However, Commissioner Sir Gary Hickinbottom responded, “The whole point of her being asked by the premier to provide monthly reports was so that that could be input into the process of implementation. … At the moment I’m still not sure why the internal auditor did not get this information.”
But Mr. Forbes said that at times he also was unable to get the relevant information that he needed to send to the auditor.
“Sometimes, I believe it was that information was not forthcoming or not in a format that we could actually act on it,” he said.
“And I think the internal auditor had the same problem, where she was not getting the information that she needed to do her job.”
Both secretaries confirmed that they were part of the implementation committee formed to coordinate with different agencies — including the Department of Agriculture and the Department of Trade, Investment Promotion and Consumer Affairs — to determine who was eligible for the different types of stimulus grants.
However, they said the Ministry of Finance performed only an advisory function in setting the criteria for the grants and in deciding who received assistance under the five categories of the economic response plan that have been reviewed by the internal auditor.
The Premier’s Office, they said, primarily handled the criteria and selection for four of the categories: the business grants; the farming and fishing grants; the educational, religious and civic organisation grants; and the transportation initiative.
In the case of the HOA Covid19 assistance grants to individuals, which were directed largely by HOA members, Mr. Forbes said, “I advised the minister of finance, who is also the premier, that there needs to be some agreed guidelines as to how members of the House of Assembly should actually disburse or distribute those funds.”
The HOA “informally” agreed to those guidelines, he said.
“But if you ask me if I went back and checked to see that the monies were distributed in accordance with the guidelines that were agreed to with them, I would have said no,” he added. “I have not done that.”
Customs
Mr. Rawat also asked Mr. Frett whether a system is in place to manage potential conflicts of interest among customs officers who operate brokerage services.
Mr. Frett replied that the officers have to get “special interest approval from the Deputy Governor’s Office to engage in such services.” He explained that a plan covering “public officers engaging in business that they can directly have some level of influence over” in their government role is “on the front burner.”
Mr. Rawat asked about the timeline to complete the plan.
“Commissioner, I will make it a priority,” he responded. “Anything emanating from the Commission of Inquiry is of importance. And I’m sure my colleagues are listening to my evidence given here and they are taking heed.”