Auditor General vs Accountant General, BRA and the Accountability Crisis in Barbados

Last Updated on September 9, 2022 3:10 pm by Editor

If you think that the controversy  over the Auditor General’s revelations about the write off of the Four Seasons loan of $124 million plus interest and the impact on NIS funds is bad, think again.

The reports of negative cash balances occurring at BRA (the Barbados Revenue Authority) should cause us  much more alarm because if there is anything that will come back to bite the ordinary citizen, it will be malfeasances and corruption going on there.

This is in fact what one senior citizen – whom we shall call Marva- found out very recently when she opened her current tax bill. There she discovered that arrears which she had meticulously paid off were now staring her in the face again.

While  the whole country is focusing on the Auditor General’s report and the infelicities of the NIS and the last DLP administration, there is a government department that should be taking the heat but is not.  Let us explain.

Auditor General vs Accountant General

Without being too technical, the difference between the Auditor General and the Accountant General is the difference between booking keeping and auditing. 

The Accountant General is the one whose department  is responsible for overseeing the actual work of ensuring that government’s accounting system meets the requirements for record-keeping accuracy, integrity and timeliness. This is bookkeeping.

On the other hand, the Auditor General is responsible for checking that that actual work has taken place over an accounting or fiscal period (usually a year) by checking that generally accepted accounting standards were adhered to in all government departments and subsequently,  issuing a report that assures the reader of government accounts that those accounts can be trusted.

As you have heard from the Auditor General over the last month, as well as in previous years, all is not well in the government accounting system. Therefore, to put it in biblical terms, we as a country, need to “know well the state of your flocks, and pay attention to your herds” (Proverbs 27:23) which is timeless advice for meticulous record-keeping with which modern agriculture is now just coming to grips.

It should not be necessary to convince anyone why we need to keep accurate and up-to-date records, not only our finances but about key aspects of our lives. And what applies to the individual level also applies to the national level. 

At the national level it is the Accountant General and his office that are responsible for ensuring that the necessary accounting procedures are followed and financial records kept.  This not the task of the Auditor General.  Therefore, it is high time for the Accountant General and his/her office to receive an upgrade in their room temperature.

The Accountant General

The Accountant General heads the Treasury which is responsible for the bookkeeping, collecting, safe-guarding and disbursing government funds. Basically, it is the same set of tasks performed by the Treasurer of a non-profit organization or the CFO (Chief Financial Officer) of a company.

Take a look at this image of the current  website of the Treasury and this should tell you why we are having so many problems with our finances.

1. Overall the site is of very poor quality.
2. The site does not even have basic https security!
3. Incredibly, html codes ( <h3>, <p> </p><h3>) are showing.
4. If this is not a production (live) site, it should not be visible the public!

Error #3 was corrected on Monday 29 August, just prior to posting the publication of this article. However, the site still leaves much to be desired.  How long has the Treasury been in existence you ask? In contrast, here are the sites of the Accountant General Department of Jamaica, Grenada, Guyana  and that of the Bahamas.

If first impressions count for anything, the Barbados Treasury Department website tells that the Accountant General’s office is utterly careless, sloppy and unprofessional.  It should then come as no surprise that the Barbados Revenue Authority can report negative cash balances.  And that is only one instance of malfeasance!

Perhaps it is the case that the Accountant General’s office needs more resources. If that is so we should have been hearing about this long ago.

Crisis of Accountability

We submit, however, that it is our culture of mediocrity and permissiveness  – where everyone lets everyone else off the hook – that is responsible for what we can now rightly call “the accountability crisis in government”

Many of the so-called supervisors and middle-management people are responsible for the crisis.  The head of one or more such persons should have been on the chopping block where these “negative cash balances” were reported.  No such luck so far!

We do understand that there are times when government  bureaucracy has to be set aside because of the nature of the situation. For example, in the case of emergencies or some genuine misunderstanding on the part of the client or department itself.

However, when this is everyday practice and only for the “the connected”, that is unacceptable.  But this is what we get because this is who are.

Government Leadership Lacking

The public service or civil service exists to execute government policy within technical and professional parameters. Therefore, one of the purposes of the elected government or political directorate is to give direction and leadership to the public service in accordance with good governance.

However, what government ministers from both parties have been often guilty of is spending inordinate time and effort trying to circumvent the rules of their ministries for their own personal gain (e.g. embezzlement/ misappropriation) or that of their family (nepotism), friends (cronyism) or political party (plain vanilla political corruption). If you think we are making this up see this Al Jazeera report on corruption in two Caribbean states published just 2 years ago.

It should be the case that ministers uphold the established procedures, professional principles and rules to which civil servants are required to adhere rather than seek to bend or break them. For example, a minister should not be asking a customs officer to let in an item because the importer is his friend even though the item is illegal. But we know this has and still continues to happen.

So where is the leadership of which this government keeps boasting? We are not interested in the PM’s projection of leadership at the international level through her concern of the partial hoax that is climate change! For the most part, that only serves her personal power.  We are talking here about moral and professional leadership of and in the country.

The esteemed PM and several of her colleagues in the Caribbean do not seem to understand that we, the ordinary people, the hoi polloi, KNOW by reading, researching and thinking that so-called climate change/global warming issue is 90% hoax! They can call that fake news but we know better!

But we digress!

Why does this government not understand the proverb: “Take care of the pennies and pounds will take care of themselves?”

1. Why is it that with 30 representatives, this government cannot fast-track a more efficient public service?  Did not the PM herself say: “Many hands make light work?” when she appointed a cabinet of 17 ministers in 2018?
2. Was she “double-speaking” and it is really the case that “people with light hands make the work (of corruption) easier?” 
3. Why is it that the Ministry of Finance has effectively had three, (now two) Ministers of Finance and this country’s finances have gotten worse rather than better?
4. What are we paying for? Is this not a rip-off of the highest order as we argued in a previous article?

What we want is for Madame PM to get the Big Works busy working on producing an efficiently run public service so that the country can be elevated from the current status of a pretentious banana republic.  

We do not need commissions of enquiry or more audit departments. This is better called “stone walling”.  And under no circumstances should taxpayers be asked to pay a private sector auditor to tell us what the Auditor General has already and clearly told us and told us repeatedly.

Should the current administration attempt to hire such an auditor (whose costs will surely be in the millions of dollars) Barbadians must convey their displeasure in no uncertain terms!

What we need is for people to do their job or be fired, for managerial incompetents to disappear like Houdini, for people who are guilty of unprofessional conduct to be sanctioned and for thieves to be prosecuted to the full extent of the law. The only talking we want to hear is that directed to a bench!

Beware BRA

Having said all of the above, the general public needs to be on its guard with respect to the Barbados Revenue Authority. Those responsible for all the missing money will surely try to find a way of blaming someone else for it. 

The taxpayer must be vigilant that he or she is not double taxed or held responsible for monies already paid.  This is exactly the case with Marva referred to at the beginning of this article.

You may or may not recall that the Warrens Branch of BRA was closed for a period.  What you may not know that it was because of alleged reports of theft there. 

The office reopened several months but the public has not been updated about the goings on there and whether anyone has been held accountable / prosecuted for the alleged theft there.

It turns out that the taxpayer in our opening scenario made most of her land tax payments at the Warrens branch!

What is much more interesting and sinister is that it does not appear that the accounting systems of these satellite or branch offices are connected to the main branch (Bridgetown) in “real time”.  Let us explain.

When an organization has satellite offices or branches there are two ways in which the accounts of those branch offices can be updated or reconciled (which is the more technical term) so that all offices, including the main branch, show the same details. One is called real-time processing and the other batch processing.

Real-time processing: In this system of reconciliation, if someone pays Branch A $500 at 2.00 PM today that will be reflected in the main office at almost the same instant.  So that if the customer calls headquarters at 2.15 PM, a record of his or her payment ought to be there, all other things being equal.

Batch Processing: The other method of reconciling the accounts of branch offices is to run an update at some specific time in the day when the institution is closed for normal financial transactions, say 8.00 PM.  This is called batch processing.  

Some organizations have to use batch processing on all or some of their accounting records especially when they have to wait on the accounts of independent entities. For example, commercial banks use batch processing to update some of their accounts.  

One reason for this is because there are inter-bank transactions which lie outside any one bank’s control which must be settled before anyone bank can update their records.

However, if all the branches or satellite offices are in the same organization, real-time processing should be preferred and used for the simple reason that it gives instant, up-to-date information. On the contrary, an obvious disadvantage of batch processing is that the accounts will be not up to date at any given point.

When you combine batch processing with continuous and pervasive breaches of protocols and SOPs (Standard Operating Procedures) you get the kind of gross confusion and scandalous situations like the impossible negative cash balances at the BRA that were reported by the Auditor General.

Advice for Tax-payers

In the stinking financial mess in which we find ourselves, taxpayers need to take some simple precautions when doing financial transactions with the BRA.

1. Pay your taxes by cheque if you have such a facility. It is obviously much more difficult for thieves to misappropriate cheques than cash payments.
2. Even if you paid by cash, ensure that you receive an official receipt: that is, one with institution’s stamp and preferably one that bears a 10-cent stamp.  
3. If you receive tax notices for amounts which you know you know you paid, the first thing to do is contact the BRA by phone. Keep a record of the date and time of your calls. It is well known that officers of BRA do not answer the phone or return emails even when they ask you to do so! The PM surely must know this is going on and the fact that the institution has not been sanctioned for committing this gross travesty of basic customer service speaks volumes about this political administration’s priorities.

4. If you cannot get any answer by phone, write the institution a strong letter presenting the evidence that you have paid your taxes. Be in control, give the institution a deadline to respond/rectify the situation.
5. If the above does not get redress and the institution insists you pay despite the evidence you provide, take your case to the police as a case of suspected fraud. You might also consider raising the matter on social media and in any public forum in a proper manner so that others get the heads up.

It is time ordinary people recognize that they are not helpless against government bureaucracy and corruption.  It is time to fight back!

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