The recently passed Public Financial Management Act expands the role of the auditor general to conduct audits of government business enterprises that were not previously provided for under the constitution.
Section 10 (6) of the act allows a minister responsible for a government business enterprise to secure rights to enable examination by the auditor general.
Those government business enterprises listed in the act include Arawak Port Department, Bahamas Development Bank, Bahamas Maritime Authority, Bahamas Mortgage Corporation, Bahamas Power and Light, Bahamas Resolve, Bahamasair, Bank of The Bahamas, Bridge Authority, Broadcasting Corporation of The Bahamas, Lucayan Renewal Holdings Ltd., Nassau Airport Development Company, Nassau Cruise Port, Nassau Flight Services, National Art Gallery of The Bahamas, Poinciana SRV, Tourism Development Corporation and Water and Sewerage Corporation.
“Some are government agencies, some are special purpose vehicles. I believe that the legislation requiring an agreement to audit all of these is just because the constitution is so specific in terms of listing the entities that the auditor general must audit and does not specifically include these. We need a mechanism whereby the auditor general can capture all of those other entities which are not explicitly stated,” Minister of Economic Affairs Michael Halkitis explained regarding the rationale behind the expanded role of the auditor general.
“When you talk about public funds being expended, that should come within the purview of the auditor general. Our view is the auditor general should have the role to audit and make sure that public funds, wherever they are, in whatever form, are accounted for.”
There has been criticism of section 10 (2) of the act, regarding it not entitling the auditor general to question the merits of the policy objectives of any department, authority or body in respect to examinations carried out.
It was argued that the legislation seemed to limit the capacity of the auditor general in contrast to Article 136 in the Bahamas Constitution that “the auditor-general shall not be subject to the direction or control of any other person or authority”.
Halkitis maintained that the government does not interpret the law this way, but the addition may have been superfluous and will be examined.
“Of course we agree that there should be no diminution of the powers of the auditor general, we do not think that this act does it… We agree with the independence of the auditor general,” he said.
“No, the auditor general does not opine on policy and he ought not and I think this act is just reinforcing that, because policy objectives are set by the politicians, the policy makers. It might be superfluous, but my point is when we look at section 10, subsection 2 of the act, when it says he should not question the merits of the policy objectives, it might be superfluous, but I think it goes without saying. Everybody knows that he does not question the merits of the policy makers.”
