Na­tal­ie?Brig­gs

"At one point in 2015, just af­ter the Elec­tion, with no new con­trac­tu­al oblig­a­tions on the part of the in­com­ing gov­ern­ment or new items of ex­pen­di­ture, the over­draft at the Cen­tral Bank reached 98.0 per cent of the le­gal lim­it, with bare­ly enough funds to ser­vice the coun­try for a few days."

"For the fis­cal year 2015, while gov­ern­ment rev­enues from pe­tro­le­um fell by $8.0 bil­lion com­pared to bud­get­ed es­ti­mates, gov­ern­ment ex­pen­di­tures were on­ly re­duced by a mere $3.0 bil­lion. As a re­sult the fis­cal deficit bal­looned to $7.0 bil­lion."

Fi­nance Min­is­ter, Colm Im­bert, ex­cerpts from his Bud­get 2016 pre­sen­ta­tion

In her re­sponse to the Min­is­ter Im­bert's pre­sen­ta­tion, Op­po­si­tion Leader, Kam­la Per­sad Bisses­sar chal­lenged his fig­ures, es­ti­mat­ing the same deficit at on­ly $1 bil­lion. As one side makes claims of mas­sive and wan­ton spend­ing and the oth­er de­fends its ac­tions, it may be hard for the pub­lic, whose purse the mon­ey is com­ing from, to know what's re­al­ly go­ing on.

Dr. Ax­el Kra­vatsky, chair of the Caribbean Cor­po­rate Gov­er­nance In­sti­tute (CC­GI), says that bet­ter cor­po­rate gov­er­nance strate­gies can help with the wider is­sue of fos­ter­ing bet­ter gov­er­nance, mak­ing these sit­u­a­tions a thing of the past. The in­sti­tute has been push­ing for greater adop­tion of a code it for­mu­lat­ed and launched back in 2013.

Speak­ing with the Sun­day BG in an in­ter­view at his St. Clair of­fice, Kra­vatsky ex­plained how ac­count­abil­i­ty and in­for­ma­tion should flow be­tween cit­i­zens and the gov­ern­ment.

"The way it works is first­ly, you have cit­i­zens, who are giv­ing pow­er to leg­is­la­tors through na­tion­al elec­tions. Then leg­is­la­tors are re­port­ing back on what they are do­ing on an oc­ca­sion­al ba­sis. Amongst the leg­is­la­tors, the Cab­i­net is formed. The Cab­i­net then del­e­gates pow­ers and re­spon­si­bil­i­ties to min­istries.

"From that, they then del­e­gate fur­ther re­spon­si­bil­i­ties to pub­lic bod­ies. For ac­count­abil­i­ty to work, in­for­ma­tion has to come back, (through the sys­tem) all the way. This is called the long route to ac­count­abil­i­ty and is based on a World Bank 2003-2004 study."

The CC­GI chair said there were sev­er­al break­downs along the chain through which in­for­ma­tion and ac­count­abil­i­ty flow among gov­ern­ment, state agen­cies and pub­lic This, he said, is large­ly be­cause no­body was ask­ing for the right in­for­ma­tion.

Ac­cord­ing to Kra­vatsky, even though reg­u­la­to­ry bod­ies, such as the Cen­tral Bank and Fi­nan­cial In­tel­li­gence Unit, were ask­ing for greater quan­ti­ties of in­for­ma­tion, they still paid lit­tle at­ten­tion to how en­ti­ties un­der their con­trol were be­ing run.

"If they are not be­ing asked to re­port on how they are be­ing gov­erned, but on­ly on the re­sults that they pro­duced and the mon­ey they have spent, you can­not re­al­ly hold the board mem­bers to ac­count."

"This is be­cause you do not know if they do rea­son­able things. Is it rea­son­able for you not to meet? What poli­cies have you put in place? How do you deal with third par­ty trans­ac­tions? How do you deal with con­flicts of in­ter­est? If you don't know, that ac­count­abil­i­ty path is be­ing hin­dered."

Kra­vatsky con­tin­ued: "If the min­istries don't know these things, the Cab­i­net can­not hold them to ac­count. If the Cab­i­net can­not hold them to ac­count, Par­lia­ment can­not hold them to ac­count. We just know that X me­tres of box drain, were pro­duced but we don't know if it was done so in an ef­fi­cient or ef­fec­tive man­ner. Then, if they don't dis­close any­thing to the pub­lic, the pub­lic can­not hold them to ac­count."

And cur­rent­ly, very lit­tle com­pels gov­ern­ment agen­cies to ad­here to cor­po­rate gov­er­nance best prac­tices, larg­er­ly be­cause this coun­try lags be­hind its Caribbean neigh­bours and the in­ter­na­tion­al com­mu­ni­ty in the adop­tion of a cor­po­rate gov­er­nance code both in the pri­vate and pub­lic sec­tors.

Kra­vatsky said the In­ter­na­tion­al Stan­dards of Ac­count­ing and Re­port­ing (IS­AR) bench­mark con­tains 51 dis­clo­sure items that com­pa­nies should re­veal. To com­pare he said or­gan­i­sa­tions in the UK dis­close about 45 of these items, mean­while T&T com­pa­nies re­veal any­where be­tween four and 46 of these items, a much wider spread. T&T al­so on­ly has five items that must be dis­closed writ­ten in­to law and reg­u­la­tion.

He said, if the rec­om­men­da­tion made by the CC­GI's Cor­po­rate Gov­er­nance Code are tak­en in­to ac­count, T&T is com­pli­ant with 27 of the IS­AR's rec­om­men­da­tions. But this is still low­er than Ja­maica and Bar­ba­dos, which both have over 30.

The CC­GI chair said while sev­er­al or­gan­i­sa­tions have adopt­ed the code over the past two years, many still chose not to pub­li­cise the fact. Kra­vatsky said there was a gen­er­al feel­ing among them that "they were not there yet" and want­ed to get things in or­der be­fore they did.

Re­gard­ing the pub­lic sec­tor, Kra­vatskey said for­mer fi­nance min­is­ter, Lar­ry Howai, was a sup­port­er of the code's adop­tion, but he nev­er in­sist­ed that any of the min­istries use it in their op­er­a­tions.

He is reach­ing out to cur­rent Fi­nance Min­is­ter, Colm Im­bert and is hop­ing the CC­GI can part­ner with him to cre­ate a new cor­po­rate gov­er­nance cul­ture with the pub­lic sec­tor. In this new dis­pen­sa­tion, the min­istry of fi­nance, as Cor­po­ra­tion Sole, acts as a board, pre­sid­ing over the rest of the min­istries and their at­ten­dant state agen­cies.

"The cor­po­ra­tion sole, has to man­age so many peo­ple and so many or­gan­i­sa­tions, it is es­sen­tial­ly like a board. It must think of it­self with all the re­spon­si­bil­i­ties of a board gov­ern­ing a port­fo­lio of com­pa­nies. It is very dif­fi­cult to do that, un­less you have the right process­es in place."

One of these process­es is the de­cen­tral­i­sa­tion of the mon­i­tor­ing and re­port­ing process.

Kra­vatsky said a ten­den­cy in T&T was for one or two cen­tral reg­u­la­to­ry bod­ies to be watch­dog over scores of oth­er bod­ies. He gave the In­tegri­ty Com­mis­sion as an ex­am­ple.

"Each one of these en­ti­ties that falls un­der its purview, must con­form with the code of con­duct which is in the (In­tegri­ty in Pub­lic Life) Act. But the in­ter­pre­ta­tion is that it is the In­tegri­ty Com­mis­sion which needs to go and en­force that in each place. And it doesn't re­al­ly have the pow­er or the re­sources."

In­stead Kra­vatsky sug­gest­ed that each min­istry be re­spon­si­ble for its own in­ter­nal struc­tures of reg­u­la­tion and en­force­ment, ap­peal­ing to Cor­po­ra­tion Sole to in­ter­vene as a last re­sort.

Fur­ther, each min­istry and state agency should be equipped with the re­sources and fi­nances to do so

Re­fer­ring to the World Bank's Long Route to Ac­count­abil­i­ty di­a­gram (see di­a­gram), Kra­vatsky said this formed part the Del­e­gat­ing and Fi­nanc­ing el­e­ments nec­es­sary for ac­count­abil­i­ty.

He al­so rec­om­mends bet­ter re­port­ing stan­dards for gov­ern­ment min­istries and their state agen­cies.

As he not­ed be­fore, re­port­ing should not be just in­di­cat­ing how much was pro­duced and how much it cost, but should al­so in­clude what stan­dards were used to judge whether this was a good use of the re­sources that min­istries and state en­ter­pris­es utilised to cre­ate pub­lic goods.

"The Prime Min­is­ter and oth­ers are say­ing that re­sources haven't been used ef­fec­tive­ly and now we have to tight­en. The ques­tion is, how in­ef­fec­tive­ly? And what are your in­puts re­al­ly?" said Kra­vatsky.

"A board that is gov­ern­ing well knows what in­puts it us­es, it knows how it trans­forms these in­puts through ac­tiv­i­ties in­to out­puts and if those out­comes count. An an­nu­al re­port should tell me these things. If you see that, you can form your judge­ment and see whether these peo­ple are man­ag­ing or not and are they achiev­ing rea­son­able re­sults or not."

It is through in­creased an­nu­al re­port­ing stan­dards, the pub­lic can tell what state bod­ies have been do­ing, the Per­form­ing and In­form­ing el­e­ments nec­es­sary for ac­count­abil­i­ty.

"The main sto­ry is right now, the state doesn't know what its en­ti­ties are do­ing. Part­ly, be­cause it is not ask­ing them to tell it what they are do­ing. The pub­lic doesn't know what these en­ti­ties are do­ing be­cause the en­ti­ties are not be­ing asked to re­port to the pub­lic. So if we want to change the sit­u­a­tion, if we want to in­crease ac­count­abil­i­ty, one of things we need to do, is to ask peo­ple to re­port on what they are do­ing."

"If you take away in­for­ma­tion, the whole ac­count­abil­i­ty cy­cle falls down," said Kra­vatsky.

He said in­for­ma­tion was gen­er­al­ly hard to come by in T&T and that this "may not be by chance".

If all the oth­er el­e­ments are in place, or­gan­i­sa­tions are bet­ter able to en­force and take cor­rec­tive ac­tion where things are go­ing wrong.

Kra­vatsky said new boards be­ing ap­point­ed now have a re­spon­si­bil­i­ty to put these sys­tems in place, par­tic­u­lar­ly at a time when con­ser­va­tion of re­sources was im­por­tant.

He al­so said an­oth­er im­por­tant el­e­ment for bet­ter cor­po­rate gov­er­nance in the pub­lic sec­tor is civ­il so­ci­ety.

"We need to in­crease and im­prove the ca­pa­bil­i­ty of cit­i­zen groups to or­gan­ise. So civ­il so­ci­ety it­self needs to strength­en, be­cause when it is or­gan­ised, it has a bet­ter voice in the sys­tem."

Recog­nis­ing the com­plex­i­ty of the is­sue, Kra­vatsky said na­tion­al di­a­logue was nec­es­sary.

"This can be fixed," he said.