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

Re-imagine Caribbean HR: The Future Operating Model

Article by Kimberly Chan, PMQ, MBA

As a recently founded Caribbean body, the Caribbean Institute for Human Management (CaIHRM) hosted its first webinar on October 30, 2024, with a focus on Re-imaging Caribbean HR: The Future Operating Model, staying true to its mission, “As the voice of Caribbean HR is to unite and empower regional bodies through innovative representation, advocacy and capacity building.”

This inaugural event was opened by Mrs. Georgia Donaldson (Director – CaIHRM) and moderated by Mr. Michael McAnuff-Jones (Chairman – CaIHRM) who guided the rich discussions with presentations from the powerful and dynamic panel of regional executives and trailblazers which included:

Mrs. Cavelle Joseph-St. Omer – President, CaIHRM & Human Resource Management Association of Trinidad & Tobago (HRMATT)
Dr Cassida Jones Johnson – Director, CaIHRM & Human Resource Management Association of Jamaica (HRMAJ)
Ms. Esaura Cumberbatch – Director, CaIHRM & Immediate Past President, The Bahamas Society for Human Resource Management
Mr. Nicholas Roberts – Human Resource Management Association of Barbados (HRMAB)

The panellists discussed strategic initiatives through the five (5) HR Operating Models highlighted in a recent article by Mckinsey presented by the panellists who added their interpretation and views as follows:

Ulrich+

This model is an adaptation of the classic Ulrich model, with HR business partners developing functional spikes and taking over execution responsibilities from centers of excellence (CoEs). In turn, CoEs are scaled down to become teams of experts and selected HR business partners. They are supported by global business services and have a digital operations backbone. Many CHROs believe the classic Ulrich model is not up to solving today’s HR challenges, with HR business partners lacking the skills and time to keep up with the latest HR developments. Inflexible CoEs limit agile reactions, while other organizational boundaries have steadily become more permeable. Multinational businesses with mature and stable business models are often the ones that experience these pain points.

Agile

This model calls for a smaller number of HR business partners, with an emphasis on counseling top management, while CoE professionals focus on topics such as data and analytics, strategic workforce planning, and diversity and inclusion. The freed-up resources are pooled to implement cross-functional projects. CHROs who favor this operating model believe that HR needs to accelerate to keep up with the increased focus on execution exhibited on the business side and to prevent HR from hindering rapid transformation. Companies are applying this and other agile methodologies when experiencing rapid growth or discontinuity. (For an example of this model, see sidebar “An agile transformation.”)

Ex-Driven

This model is meant to help CHROs gain a competitive advantage by creating a world-class EX journey. Putting EX first means allocating disproportionate resources toward “moments that matter.” For example, HR, IT, and operations experts could be granted full responsibility to jointly plan, develop, and roll out a critical onboarding process. By creating a world-class EX, HR becomes the driving force in bridging cross-functional silos and in overcoming the patchwork of fragmented data and processes that many organizations suffer from today. The companies employing this model are highly dependent on their top talent, with a small set of clearly defined competencies. (For more on this model, see sidebar “Optimizing the employee experience.”)

Leader-Led

In this model, CHROs transition HR accountability to the business side, including for hiring, onboarding, and development budgets, thereby enabling line managers with HR tools and back-office support. This archetype also requires difficult choices about rigorously discontinuing HR policies that are not legally required. Too much oversight, slow response times, and a lack of business acumen in HR have led some companies to give line managers more autonomy in people decisions. Companies exploring this choice typically have a high share of white-collar workers, with a strong focus on research and development.

Machine-Driven

With this model, algorithms are used to select talent, assess individual development needs, and analyze the root causes of absenteeism and attrition—leaving HR professionals free to provide employees with counsel and advice. As digitalization redefines every facet of business, including HR, CHROs are looking for ways to harness the power of deep analytics, AI, and machine learning for better decision outcomes. Organizations that are experimenting with this are primarily those employing a large population of digital natives, but HR functions at all companies are challenged to build analytics expertise and reskill their workforce.

(Excerpt – HR’s new operating model – December 22, 2022 | Article https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/hrs-new-operating-model)

This event hosted over one hundred (100) participants from HR Practitioners and Business Executives from across the globe. CaIHRM will continue to host events of a similar nature to engage in conversations toward the development of our Caribbean countries.

Business

$100,000 TO BE RAISED FOR FISHERFOLK

HILTON BARBADOS RESORT, ARTS COUNCIL, SUSTAINABLE CARIBBEAN AND FISHERIES DIVISION

Hilton Barbados Resort has joined forces with the Barbados Arts Council, Sustainable Caribbean and the Fisheries Division to host a charity event aimed at raising $100,000 to assist the fisherfolk community impacted by Hurricane Beryl in July.

General Manager of Hilton Barbados Resort, Jacques Montiel, explained that the important fundraiser, ‘Harbouring Hope – Operation Blue Recovery’ will be hosted on Saturday, November 16 at Hilton at 5:30 p.m., and all proceeds will go towards the recovery efforts.

He said, “We are deeply committed to supporting our community in times of need. Witnessing the devastating impact of Hurricane Beryl on the fishing boats, we knew we had to take action. Our event aims to provide the necessary support for our fisherfolk to recover and rebuild their livelihoods.

“This event is a testament to our commitment to supporting our fisherfolk through these challenging times, and through it, we aim to provide the necessary assistance for a full and swift recovery.”

Thanking the organisations for coming together to host the fundraiser, Chief Fisheries Officer Dr. Shelly-Ann Cox noted that the funds raised will assist with propelling the recovery efforts and getting boats back into the water to harvest fresh fish.

General Manager of Hilton Barbados Resort, Jacques Montiel (second from right) and
Chief Fisheries Officer Dr. Shelly-Ann Cox (third from left) during a recent site visit to finalise plans for the charity event, Harbouring Hope – Operation Blue Recovery, in aid of the fisherfolk community. Also pictured are Hilton’s Katrina Coleman (third from right) and Téresa Nicholls (right), the Division of Fisheries’ Akeila Chapman (second from left) and Barbados Arts Council’s Jill McIntyre (left).

She said, “No value can be placed on the future of our fishing partners who have not only lost their income, but also their peace of mind for the intermediate future. As you are aware, the fisheries sector is a cornerstone of our island’s economy and culture. Harbouring Hope: Operation Blue Recovery, the sector’s positive response after the catastrophic impact of Beryl would not be possible without the outpouring of love and support from collaborators across the private and public sector.

“We are extremely grateful to our partners for their acts of kindness and passion for hosting such a one of a kind event. This collaboration employs a creative approach to engage corporate Barbados through the use of ocean-inspired music, poetry, art and dramatizations, and will also pay tribute to fisherfolk stalwarts that have made a significant contribution to the fishing industry.”

Harbouring Hope – Operation Blue Recovery will feature silent and live auctions, raffles and local entertainment. (PR)

Business

63rd Bi-Annual Meeting Of CARICOM Central Bank Governors

The Central Bank of Barbados hosted the 63rd Bi-Annual Meeting of the CARICOM Committee of Central Bank Governors in Bridgetown on Thursday, November 7 and Friday, November 8, 2024.

The meeting brought together senior officials to address pressing economic issues and strengthen the region’s financial systems, with a focus on key topics such as financial stability, cybersecurity, and regional economic performance.

A significant portion of the agenda focused on financial stability, particularly the data issues regarding non-bank financial institutions. Furthermore, Governors discussed the modernisation of payment systems and advancing interregional payments to bolster the Caribbean’s competitiveness. The Governors highlighted the importance of enhancing financial resilience and cooperation across the region.

On the matter of cyber resilience, several presenters underscored the need for strong security measures across the financial sector amid rising cyber threats. The Governors marked a major milestone by signing a Memorandum of Understanding for the Cybersecurity Information Sharing Group, signalling a commitment to a unified approach in combatting cyber threats across the region’s central banks.

The Governors also reviewed regional economic developments and discussed growth outlooks against the backdrop of slowing global growth projections for 2025, ongoing geopolitical tensions, and the Caribbean’s vulnerability to climate change. The discussions acknowledged the need for adaptive strategies to navigate these uncertainties and sustain economic stability.

Investment to fuel development was another focal point, with the Governors agreeing on the importance of mobilising excess liquidity and addressing barriers to private sector investment. They expressed interest in exploring the appropriate modality to accelerate and expand financing of infrastructure projects and sustainable development initiatives across the region.

The 63rd Meeting was held alongside the 55th Annual Monetary Studies Conference (AMSC), where Governors John Rolle (The Bahamas), Kareem Michael (Belize), and Dr. Gobind Ganga (Guyana) participated in a panel discussion on “The Role of Central Banks in Facilitating the Mobilisation of Regional Investment to Support Development”, moderated by host Governor Dr. Kevin Greenidge.

The conference included sessions on digital innovations, climate adaptation, and regional integration, with a notable keynote address by renowned economist Professor Jeffrey D. Sachs, who delivered the 37th Adlith Brown Memorial Lecture.

At the close of the Meeting, Governor Greenidge handed over chairmanship of the CARICOM Committee of Central Bank Governors to President Richard Doornbosch of the Centrale Bank van Curaçao en Sint Maarten.

Committee members are: Chairman Dr. Kevin Greenidge (Governor, Central Bank of Barbados), Ms. Jeanette Semeleer (Governor, Central Bank van Aruba), Mr. John Rolle (Governor, Central Bank of The Bahamas), Mr. Kareem Michael (Governor, Central Bank of Belize), Mr. Richard Doornbosch (President, Centrale Bank van Curaçao en Sint Maarten), Mr. Timothy Antoine (Governor, Eastern Caribbean Central Bank), Dr. Gobind Ganga (Governor, Bank of Guyana), Mr. Ronald Gabriel (Governor, Banque de la République d’Haïti), Richard Byles (Governor, Bank of Jamaica), Mr. Maurice Roemer (Governor, Central Bank van Suriname) and Dr. Alvin Hilaire (Governor, Central Bank of Trinidad and Tobago). (PR/GIS)