Anyone can make a mistake, and we have all done from time to time.  “Let him who is without sin cast the first stone.”

Nevertheless, with the cost of that mistake bordering $20M per year, for all time, we have a problem.  But larger problems loom that a supplementary additional provision (SAP) cannot fix.

How is it possible to under-budget for a wage increase to the tune of $20 million if it were not a deliberate attempt to split the expenditure for the sake of a balanced budget?  Well, let us examine the process.

Once the government agrees to a wage increase for civil servants, the Deputy Governor (DG) gets to work.

A wage classification exercise usually runs in tandem so the HR Department, which falls under the DG’s Office, pulls its records; matches every employee to a post and compiles a report which includes financial obligations.

All figures are then verified by the Territory’s Chief Financial Officer, the Financial Secretary (FS).  He already has access to information on every civil servant, active and retired, and their remuneration.  Nevertheless, the DG would have sent a request in writing.

If the wage increase is more than a percentage increase on the existing scales, the decision is made to employ an external firm to do the background scans and comparisons with similar jurisdictions.

The DG’s PS prepares a cabinet paper for his review and for the Governor’s approval since it is the Governor who would take the paper to Cabinet.

In this case, PriceWaterHouseCoopers (PwC), a firm out of Trinidad and Tobago, was chosen.

With few exceptions, all papers to the Cabinet require legal and financial implications and it is the duty of the Attorney General (AG) and the FS to opine.

This is the second bite of the cherry for the FS.

On completing its work with the help of the various committees that may have been established by the DG, PwC presents its final report.  That report will outline salary ranges for all scales.

The DG, his PS and Technical Team will review the numbers and with HR, determine where every civil servant will fall in the proposed scales.  Their work will lead to a ball park figure for the increase.

(It does not concern us, in this analysis, that only those at the top and the bottom of the scales benefited from the review with the middle, the managers, hardly receiving any increase.)

In any case, the DG would have sent the PwC report with his crude calculations to the FS, under cover, for his review.  (The third bite).

The established protocol is for the Finance Minister to peruse the mail folder of the Financial Secretary so he would have been aware of the DG’s missive.

But given the level of the expenditure, and the fact that the Government promised civil servants the increase, the FS would have been obligated to discuss with the Minister for Finance to receive his blessings.

With verification of cost by the FS, the DG’s PS prepares another Cabinet Paper for his consideration and the Governor’s approval.  

Again, the AG and the FS write their legal and financial implications to accompany the Paper.  (The fourth bite). Because it is the way of bean counters, the FS would have likely said that BVI cannot afford the increase.  But we believe, like Chaucer, that “the workman is worthy of his hire.”

Since the Finance Minister would have included the increase in his 2024 Budget Estimates, the FS would have reviewed the numbers yet again. (The fifth bite.)

And during the Standing Finance Committee proceedings chaired by the Finance Minister with the FS providing the secretariat (The sixth bite) the Budget Estimates are reviewed by all elected members line by line. 

And at the Budget speech and Budget debate, the FS is well seated in the House to ensure that all goes well, financially. (The seventh bite.)

The questions:

1. How could the FS have missed, seven times, a number as large as $20M?

2. If the FS was aware of the number, did he tell his Minister for Finance?

3. How could the AG have failed to sound the alarm?

4. What happened to the Internal Audit Team in the process?  Were they sidelined?

5. Were the DG and the Governor aware of the $20M discrepancy?  After all, the Cabinet papers were passed in the Governor’s name. 

6. Does the Finance Minister have time to cover his various responsibilities?

What we know, for sure, is that the Finance Minister/Premier is weighted down with heavy ministries:

 a). The Premier’s Office (The Ministry)

b).  The Ministry of Tourism 

c).  The Ministry of the Environment, Natural Resources and Climate Change 

d).  The Ministry of Finance 

And although he created the Ministry of Financial Services for his Deputy, he has maintained responsibility for some financial services subjects like the Global Minimal Tax, Accountancy and the International Tax Authority which he is ill equipped to guide. 

All it would take for us to end back on the EU grey or blacklists is our missing a deadline.  No SAP will fix that.

The Premier has an impossible job and obviously, the buck stops with him.  But he has asked for an investigation into the $20 million debacle, as he should.

Fridays wonder what he expects to find that he may not already know.  And when he finds it, what will he do?

Sometimes, the best cover is found in the lyrics by Ronan Keating: “You say it best when you say nothing at all.”

Happy Friday!