Dominica

Just last week Dominica gave $12 million to Anguilla?  It is general elections time in the Commonwealth of Dominica.  So, you cannot believe everything you read in the Dominica newspapers at this time.  What I read with a degree of astonishment and disbelief in the Dominica News Online was that Dominica, one of the poorest countries of the Commonwealth Caribbean, has just “given” Anguilla $12 million out of its hard-earned savings and out of the goodness of Prime Minister Roosevelt’s Skerrit’s heart.  Dominica in 2006 is reported to have had a GDP per capita of $4,758, while Anguilla’s was $8,310.00.  You would not easily have concluded that Anguilla could be helped financially by Dominica.

These reverse alms from the poor man to the rich man would be an outrage against common decency, if the story were true.  The people of Dominica need schools, hospitals, roads, and libraries.  Would the outgoing Dominica government, struggling to be re-elected, take its hard-earned savings and loan them to Anguilla, with a significantly higher per capita GDP?  The Chief Minister not long ago was boasting that he was the highest paid head of government in the OECS.  Why would poor little Dominica do such a thing for Anguilla?  Would their government, going into a general election, draw down funds from the ECCB, that it could well use for the development of Dominica, to bail out the government of Anguilla?  I cannot readily believe the story to be true.

PM Skerrit jokingly says that he “gave” the $12 million to Anguilla.  He must be very confident of his support by the electorate in Dominica to have made such an irresponsible assertion.  We have to assume that he is conspiring with the government of Anguilla to hide from the Central Bank the fact that he is merely loaning, not giving, the money to Anguilla, a country that has exceeded its borrowing powers, and is unable itself to make this borrowing.  It is amazing that he can be so confident that the people of Dominica will really be happy about such a state of affairs.

Yet, you can listen to an audio recording of PM Skerrit making just that claim right here:

As usual, it was a pleasure to tune in to Haydn Hughes’ call-in radio programme On the Spot last night, which dealt with this news.  Independent candidate Sutcliff Hodge was one of his guests.  Their discussion was pretty thorough, but I thought they missed raising a couple of important points.

If this was a loan, was it authorized by a Resolution of the Anguilla House of Assembly, as provided for in the Financial Administration and Audit Act?  Why is this Resolution important?  Because this is the mechanism designed by law to ensure transparency in public borrowing.  This is how the people consent to government borrowing money that we, the people, will have to repay one day.  The government of Anguilla is prohibited by law from borrowing any money that has not been authorized by the House of Assembly.  This is what section 38 says:

Authorisation of debt

38. No money shall be raised on the credit of the Government except under the authority of this or another Act of the Legislature or of a resolution of the House of Assembly.

If this loan was not authorized by law or by a Resolution, is it not an illegal loan?  If it is illegal, who committed the offence?  Will there be any repercussions?  Will the auditor take it up for comment within the next five or six years, as is par for the course up to now.  And, if and when he does, will it not then be too late to make anything of it, as is usual, since by the time the audit report is published another administration will be in office?

I always had my suspicions that the famous British contingent liability was a figment of some bureaucrat’s fevered imagination.  Is this scorning by Anguilla of the long breached guidelines, put in place precisely to safeguard Britain’s contingent liability, further evidence of the spurious nature of this alleged liability?  Or, is it just evidence of hubris on the part of our Minister of Finance?  Does he believe that he has become all-powerful, and can do as he wishes with the public purse?

For what purpose would the money be borrowed?  The standard answer is to meet government’s commitments, of course!  Elections in Anguilla are around the corner.  Could the thinking be that a Christmas bonus must be paid, despite the economic downturn, if the public servants are to be kept mollified in order to ensure their support when the day for voting comes?  Never mind the piling up of public debt upon debt, that will be for someone else to sort out, after the general elections.

If true, the further fear must be that this unauthorized borrowing may just be the tip of the iceberg.  Are there other secret borrowings and commitments that our out-going government has obligated our new administration to settle in the new year?

May I wish everyone a Super Solstice!

Suspension

A sad day for the British Overseas Territories. It is a sad day for all of us when the UK has to suspend the constitution of a British Overseas Territory such as Anguilla is. The Minister announced she was doing just that for the Turks and Caicos Islands in a written statement in Parliament yesterday. And, this modern constitution is barely two years old.

The Minister wrote in part:

I wish to inform the House that on 16 March 2009 the Governor of the Turks and Caicos Islands (TCI) published the interim report of the Commissioner, the right hon. Sir Robin Auld (http://www.tci-inquiry.org/interim_report.html).

The Commissioner states that the written information obtained in the first six months of the Commission’s inquiries, when coupled with the evidence in the public hearings in TCI earlier this year, have provided information in abundance pointing to a high probability of systemic corruption or serious dishonesty. In his view this, together with “clear signs of political amorality and immaturity and of general administrative incompetence, have demonstrated a need for urgent suspension in whole or in part of the constitution and for other legislative and administrative reforms”, and change in other related matters.

In light of the accumulation of evidence in relation to TCI in the last year or so, and fortified by the Commissioner’s interim report, the Government have formed the view that parts of the constitution will need to be suspended and have decided to take steps to enable it to do so. I am today making available on the Foreign and Commonwealth Office (FCO) website a draft Order in Council prepared by the FCO which would suspend parts of the constitution, including those relating to ministerial Government and the House of Assembly, initially for two years, although this period could be extended or shortened. The draft order will be submitted to Her Majesty in Council at a meeting on 18 March. If made, the order will be laid before Parliament on 25 March. Unless the Commissioner’s final report significantly changes our current assessment of the situation, the order will be brought into force after the final report is received. However, the order could be brought into force sooner if circumstances arose in the territory prior to that date which justified suspending relevant parts of the constitution. This intervention is for an interim period only.

We in Anguilla have to be thankful that there is no evidence here of the sort of widespread corruption that Sir Robin Auld uncovered in TCI. The principal difference between our two countries is that in Anguilla government has little or no Crown land to dispose of at personal profit to Ministers. In TCI, by comparison, most of the territory appears to have been made up of Crown land. They ploughed fertile furrows through the islands. The transcript of the evidence taken reveals the multitude of devices TCI politicians used to make money from dealing in the public’s land. Who knows where we in Anguilla would be today if we too had had large tracts of Crown land waiting to be disposed of?

What is it, by comparison, if our Ministers occasionally overrule the Planning Department and permit a favoured individual to build a restaurant or a beach bar on the public beach? They overrule the Planning Department for favourites in much more fundamental ways every week. They call it “being sensitive to the needs of the poor Anguillians”, and they get away with it in the eyes of trusting and gullible Anguillians.

What if the Minister is charmed by the young, attractive Dominicana into writing a personal letter addressed to one of the more vulnerable restaurateurs on the island, requesting him to give her a job without the work permit she so obviously requires? That is the Minister being sympathetic to the needs of poor Anguillians, isn’t it? Although, as one restaurant owner complained to me, “Why is it he never sends me young men, only young girls?” Anyway, as one Immigration official told me, “We stopped him doing that.”

What if the Ministers pad out the Boards of statutory corporations with political supporters and hangers on? They all need a job, don’t they? This is being sensitive to the needs of poor Anguillians. As if turning the Board of the Health Authority of Anguilla into a virtual sub-committee of the local Masonic Lodge is somehow a shining example of transparency and accountability! In my opinion, it is exactly the opposite to being sensitive to the needs of poor Anguillians.

So what if there is no binding Code of Conduct for Ministers. They had one in the TCI, and, as it was purely voluntary, it did not help one bit.

So what if we in Anguilla have no Integrity Commission. They had one in the TCI, and, as it had no teeth, it did not help one bit.

So what if the Chief Auditor has given our public accounts a failing grade year after year? Not even the Opposition in the House of Assembly has ever asked a single question about the misspending revealed.

Inappropriate interference in and by-passing of statutory regulatory bodies has, over the years, become the norm. The granting of exemptions, waivers and discounts in the areas of aliens landholding licence fees, customs duties, Environmental Impact Assessments, permanent residence certificates, and belongerships, are counted by all politicians in Anguilla as essential perquisites of power. The unconstrained freedom, without reference to any principle or policy, to decide when to grant and when to revoke work permits, licences, public works contracts, and franchises and monopoly concessions, adds the icing to the cake. As my Dominican friend likes to tell me, “In Anguilla, once you have the right godfather, you can do anything.”

No party when in opposition wants to change the political culture. They only want to be the ones enjoying the privileges and perks of power. No one cares that all this is equally evidence of our political amorality and immaturity, and of our general administrative incompetence.

So long as our people permit our leaders to continue to exercise power over us, with no checks or balances other than the vote every five years, things can only go from bad to worse.

Government Accounts

The Published Accounts of the Government of Anguilla and the Report of the Chief Auditor. Have you ever seen a copy of the audited public accounts of the Government of Anguilla? I never have. I consider that very careless of me. Every educated Anguillian should read a copy of the national accounts and audit report each year. We should make ourselves able to comment intelligently on them? They are our accounts.

The fact that we do not receive a gift of money from the British taxpayers does not mean that we should not be concerned about our national accounts. When your bank account is in the black, are you less careful about reconciling your bank statements than when they are overdrawn? No, you check them every month to make sure that no mistake has been made. It should be no different with our national accounts. Just as important as the national accounts is the report prepared each year by the Chief Auditor. He examines the government accounts and produces a report on them. He advises whether he has found any questionable activity in the accounts.

The Chief Auditor for Anguilla is Martin Daynes of the National Audit Office of the United Kingdom. He is appointed by the Governor under section 79 of the Anguilla Constitution 1982. He is independent of the government. He reports only to the House of Assembly. His report is supposed to be the main tool used by the Public Accounts Committee in its supervision of the manner in which government has spent the money voted by the House of Assembly. We know the PAC does not function in Anguilla, and never has. Could that be the reason why it is so difficult to find anyone who has seen the national accounts or the report on them?

A Chief Auditor typically produces four types of auditor’s report on the national accounts of a government. The four types may be summarised as follows:

Type 1. Where the audit has revealed nothing amiss, the Chief Auditor issues an unqualified audit opinion. This is sometimes referred to as an "audit certificate" or (especially by private sector audit firms) as an "audit report". The wording of such a report follows a standard format, as laid down in International Standards on Auditing. The audit report is appended to the accounts to which they relate.

Type 2. Where the audit has revealed an issue which merits the attention of the reader of the accounts, the Chief Auditor prepares a written report on the matter in addition to the standard (Type 1) audit report. Such reports can, for example, result from major errors or omissions being found in the evidence supporting the figures in the account. In such circumstances, the Chief Auditor’s audit opinion will almost certainly be qualified in one or more respects. This is called a Special Report. Whenever such a report is delivered, you would expect that the PAC would have a lot of questions for the different government departments.

Type 3. The Boards of many of Anguilla's government agencies have the power to appoint their external auditor. From 2004, the Social Security Board appointed the accounting firm of KPMG as their external auditor. When they do so, the Financial Administration and Audit Act 2003 requires the Chief Auditor to report on the results of the agency's audits. I have searched the Social Security website. In previous posts on this Blog, I complained that no audited reports were available. Now, I find the reports for the years 2000, 2002 and 2003 posted on the Board’s website. I read the 2003 Auditor’s Report on the web. I was pleased to find that it is a clean report. It is signed by Martin Daynes, as the law requires. This is to be commended. But, is it usual or acceptable for the accounts of a Social Security Board to be five years in arrears in publication?

Type 4. The Financial Administration and Audit Act of 2003 permitted the Chief Auditor for the first time to undertake examinations of the economy, efficiency and effectiveness with which government uses resources. Such examinations are commonly called "Value for Money Audits". To date, the results of one such audit have been laid before the House of Assembly. The report was entitled "The Establishment and Operation of the Anguilla Health Authority". It covered how the Authority came to be set up, and the results achieved in its first two years (ie 2004 and 2005). It is in some ways a troubling report. It is deserving of more investigation and questioning. You should apply for a copy and read it for yourself. There were many questions that could have been asked in the PAC, and some person or persons brought to account.

I am told that the reports on the Government of Anguilla accounts up to the year 2005 should be available from the Ministry of Finance. I have applied. Someone is to let me know when the copies are ready for me, and what the cost is.