Business

PUBLIC FINANCIAL MANAGEMENT REFORM IN BARBADOS

THE EXPERIENCE OF ICAB

As a Professional Accountancy Organization (PAO), the Institute of Chartered Accountants of Barbados (ICAB) has, for many years, collaborated with the Government of Barbados in its efforts to improve the country’s public financial management (PFM) system. While there have been a number of success stories resulting from that collaboration, Barbados is on a continuous PFM reform journey with more work still to be done.

In recent weeks the Report of the Auditor General for 2021 identified a number of areas of concern with respect to accounting practices and financial reporting by the Treasury and some state owned enterprises (SOEs). This report triggered much discussion and debate on PFM in Barbados and underscored the need for increased efficiency, accountability, and transparency in public financial reporting.

The heightened interest in PFM by the citizens of Barbados must be applauded and emphasizes why it is a strategic priority for ICAB, and why ICAB is committed to continuing to collaborate with the government to progress reforms.

How did ICAB get started on this journey of collaboration with the government on PFM reform?

In 2007 the Parliament of Barbados enacted the Financial Management and Audit Act, which adopted the accrual basis International Public Sector Accounting Standards (IPSAS) as the financial reporting standards for the Barbados public sector.

ICAB’s first major step in working with the government was by serving on a steering committee for IPSAS implementation during the move from a cash based to an accrual system of accounting. Through this engagement, ICAB recognized the need to deepen its focus on accounting and auditing issues in the public sector, so in 2011 ICAB’s Council approved the creation of a Public Sector Committee as one of its standing committees, comprising of accountants in government, accountants in business, and auditors.

The first chair of the Public Sector Committee was Mr. William Layne, an ICAB member and former Permanent Secretary of the Ministry of Finance. Under his chairmanship, the immediate priorities of the committee were to:

Create relevant continuing professional development (CPD) for public sector accountants;
Establish joint initiatives with government agencies; and
Promote membership of ICAB to professional accountants in the public sector.

In addition to IPSAS, the Public Sector Committee worked with other committees to expand CPD offerings for public sector accountants, including seminars in areas such as internal controls & internal auditing, prevention of corruption, enhancing accountability and the role of the Auditor General, and pensions reform.

The work of ICAB’s Public Sector Committee caught the attention of colleagues in the Institute of Chartered Accountants of the Caribbean (ICAC). As the first PAO in the region to have such a committee in place, the Chairman of ICAB’s Public Sector Committee was invited by ICAC to share with other Caribbean PAOs, ICAB’s experience in working successfully with the public sector to promote good governance, accountability, implementation of IPSAS and other best practices.

The second major step was taken when the Public Sector Committee broadened its focus on PFM Reforms to the wider governance issues confronting the public sector. This was marked by an inaugural ICAB Public Sector Conference in 2018, co-hosted with CPA Canada and titled “Public Financial Management (PFM) Reforms in Barbados – Challenges and Opportunities”. The conference provided ICAB members access to international experts in matters relevant to the public sector such as, digital technology, governance, transformational leadership, PFM reforms and financial reporting. This conference now has a permanent place on ICAB’s calendar of events, with the next public sector conference scheduled on September 16, 2022. This will focus on the Public Procurement Act 2021, the Consolidation of Financial Statements under IPSAS and more.

The third major step occurred after the enactment the Public Finance Management Act 2019 (PFM Act) which replaced the Financial Management and Audit Act 2007. The new PFM Act is aimed at strengthening and improving PFM and includes new provisions related to the reform of SOEs particularly in the areas of governance, finance, and reporting.

The ICAB President at that time, Lydia McCollin, along with the Public Sector Committee held discussions with the Ministry of Finance to determine how ICAB could work with the government in this next important phase of PFM reforms. In November 2019 ICAB submitted a proposal to the Ministry of Finance outlining how ICAB—through its members, partnerships with professional qualifying bodies and other professional associations—could add value, provide guidance and assist the government in implementing its initiatives in the areas of corporate governance, financial accountability, reform of SOEs, training and certification for public sector finance officers, institutional strengthening of finance departments, and internal audit.

As a follow-up, ICAB also submitted to the Ministry of Finance a Corporate Governance Framework for SOEs and a paper on the establishment of audit committees at all SOEs for consideration and further discussion. Additionally, ICAB included in its CPD schedule, training on accounting fundamentals and practice to increase efficiency and effectiveness in financial reporting in the public sector.

What lessons can be learnt from the ICAB experience in supporting reforms in public financial management?

First, as a small PAO with limited resources, much can still be achieved by drawing on the time and talents of members through committees. The ICAB Public Sector Committee is one of the newer committees but its clear mandate and ICAB’s governance polices have facilitated its strong performance in support of PFM reforms and contribution to the professional development of ICAB members in the public sector.

Second, while changes to laws, regulations and accounting policies are necessary for PFM reform, they are not sufficient to ensure success. Those high-level changes must be supported by clear interpretation and articulation of accounting policies by senior management, training and development for staff at all levels, changes in administrative procedures, and timeliness and accuracy in reporting at all levels.

Thirdly, celebrate the reform successes, even while still struggling with the more difficult and slower aspects of reform. This can be an inspiration to the agencies and individuals who still have their “mountain to climb” with the reforms.

(by Lydia McCollin, Member of the ICAB Public Sector Committee and Immediate Past President of ICAB)

Business

WORLD BANK TECHNICAL ASSISTANCE MISSION OCT 7-18

Central Bank of Barbados Partners with the World Bank to Modernise Local Payments System

During April to July 2024, the Central Bank of Barbados engaged in extensive discussions with financial institutions, the World Bank, and other key stakeholders to assess and enhance the local payments market an infrastructure. Following these talks, the World Bank conducted a thorough review of Barbados’ legal and regulatory payments framework and evaluated the Real Time Payments (RTP) system. As a result, the Central Bank, in collaboration with the World Bank, has launched the Barbados Payments System Modernisation Project.

To advance this initiative, the Central Bank will host a World Bank Technical Assistance Mission from October 7–18, 2024. The mission will provide updates on the project’s progress and gather feedback on the next steps. Key areas of focus will include legal and regulatory support, oversight, instant payments system interoperability, payments system usage, and digital financial literacy. (PR)

Business

Barbados To Host Regional Policy Meeting October 8 – 10

Barbados will serve as the host nation for the upcoming Regional Policy Meeting organised by the Caribbean Policy Development Centre (CPDC) from October 8 to 10.

This event, funded by the Open Society Foundations (OSF) and the European Development Fund (11th EDF), will be held at the Crane Hotel in St. Philip.

Minister of Labour, Social Security and Third Sector, Colin Jordan, will deliver the feature address during the opening ceremony on Tuesday, October 8, at 9:00 a.m.

The Meeting will see regional policymakers, civil society organisations, and international partners gathering to tackle the Caribbean’s most pressing challenges, including sovereign debt, food and nutrition security, and to chart a new course for governance, development, and climate resilience, all aimed at improving the lives of Caribbean people.

Speaking about the important timing of the upcoming meeting, Officer in Charge at the CPDC, Richard Jones, stated: “Now it is of paramount importance as Caribbean nations face a convergence of complex challenges that threaten to derail sustainable development and the well-being of their citizens. At this critical juncture, the region grapples with persistent poverty, rising inequality, food insecurity, and the existential threat of climate change.”

According to data provided by the CPDC, small economies, burdened by the legacy of colonial extractive practices, remain vulnerable to external shocks, such as global price fluctuations and natural disasters. Climate change, in particular, presents a grave risk, with increasing hurricanes and rising sea levels threatening entire economies, especially those reliant on tourism and fisheries. The Caribbean loses an estimated three per cent of its GDP annually, due to natural disasters, underscoring the urgent need for robust, coordinated regional responses.

To address these critical issues, the Regional Policy Meeting will feature an impressive lineup of regional and international thought leaders who bring deep expertise in policy, development, and advocacy, including:

Jwala Rambarran, former Governor of the Central Bank of Trinidad & Tobago, who will address the urgent need for financial stability and reforming international financial institutions.
Grace-Ann Cornwall, Social Development Professional, will provide insights on empowering vulnerable groups and NGOs across the region.
Christon Herbert, CPDC Policy Officer, will lead discussions on climate resilience, insurance solutions, and disaster risk financing.
Meghna Abraham, Director of Open Society Foundations, will highlight the importance of international solidarity in achieving sustainable development goals.
Jeremy Stephen, economist and development finance expert, will present innovative approaches to debt relief and financial stability.

Other key speakers will be Assistant Secretary-General CARICOM Single Market and Trade Ambassador Wayne McCook; Director and Senior Research Fellow, Sir Arthur Lewis Institute of Social and Economic Studies, The University of The West Indies, Cave Hill Campus, Dr. Don Marshall, and Florida-based International Consultant on Food and Nutrition Security and Sovereignty, Dr. Tigerjeet Ballayram.

Agenda – “The Main 8”

Over the three days, the meeting will drill down into eight critical policy areas under the theme “Forging Ahead”, which addresses the eight most urgent challenges threatening progression in the region:

Sustainable Development
Reform of International Financial Institutions
Debt Relief and Financial Stability
Empowerment of Vulnerable Groups
Capacity Building for NGOs
Food and Nutrition Security
Climate Resilience
Good Governance

Mr. Jones, stated: “These areas are not only crucial but also interconnected. For example, the Caribbean’s food security is directly impacted by climate change, while sovereign debt threatens the region’s ability to invest in resilient infrastructure; we will therefore focus on comprehensive solutions that encompass a range of considerations.”

Noting that progress was already underway by the CPDC in many of these areas, he added: “By building on existing projects and facilitating high-level discussions, the Meeting seeks to generate momentum for collaborative action on food security, financial mechanisms, and policies that prioritise the empowerment of vulnerable communities, ultimately fostering a more resilient and equitable Caribbean.” (PR/GIS)

Business

Annual Education Awards Ceremony

Light and Power Employees Co-operative Credit Union Limited (LPECCUL) Celebrate

The Light and Power Employees Co-operative Credit Union Limited (LPECCUL) recently hosted its annual Education Awards and Trevor Browne Scholarship ceremony; this event recognises academic excellence and promotes the importance of education within the community. This year, nine junior saver members who would have sat the Common Entrance Examination were awarded. Each student received prizes and cash vouchers. While the Trevor Browne Scholarship, was awarded to Melissa Austin, who is currently pursuing a degree in Physical Therapy in the Faculty of Medical Sciences at UWI Mona Campus.

The highlight of the event was an inspiring keynote address delivered by Lt. Col. Trevor Browne, a founding member of LPECCUL, who shared his insights on the importance of education and personal development. His words were echoed by the President, Sheena Edwards, who emphasized the credit union’s ongoing commitment to supporting the educational aspirations of its junior members and their families. Additional remarks were given by other board members and members of the management team, all underscoring the role of financial literacy and good budgeting practices in shaping the future of the next generation.

Lt Col Trevor Browne presents scholarship

In addition to the presentations and speeches, the students received valuable guidance on financial literacy, underscoring the Credit Union’s philosophy of promoting financial empowerment from a young age. The event aimed to equip students with knowledge and tools to manage their financeswisely, as they move forward in their academic journeys.

Once again, congratulations to this year’s awardees for their performance in the Common Entrance:

Teyen Bostic – The St. Michael School

Maria Gill – Christ Church Foundation School

Neymar Gill – Graydon Sealy Secondary School

Rommaldo Holford – Queen’s College

Nathan McKenzie – The Lodge School

Remy Nurse – The St. Michael School

Akil Priddee – Challenor School

Jaylan Priddee – Deighton Griffith School