A government committee that has the job of reviewing capital projects and making sure government can afford them has been dormant for some 15 years, according to statements made during Thursday’s hearing of the Public Accounts Committee.
The statements were made in relation to a report released last October by the Office of the Auditor General, which criticized government for improperly budgeting its major capital projects. According to the report, government does not typically factor in long-term maintenance and operational costs when calculating the final price of a major project, and government also does not include the full costs of major projects in its budget documents.
Speaking on those reported deficiencies and others, Public Accounts Committee Chairman Ezzard Miller asked Financial Secretary Kenneth Jefferson about the presence of a government body that fully accounts for the long-term costs of projects to make sure they are feasible.
Mr. Jefferson explained that the Public Sector Investment Committee should analyze any project worth more than $300,000, and report on its findings to Cabinet.
However, that committee has not been active since before Mr. Jefferson took his position in 2004, he said.
Compass archives show the Public Sector Investment Committee has not been active since 2003. Then-Premier McKeeva Bush reportedly said in 2012 that he intended to revive the committee, but it remains dormant.
Mr. Miller commented at Thursday’s Public Accounts Committee meeting that he recalls that the committee was abandoned for “political” reasons, and Mr. Jefferson said there has been “a lack of a push” by government over the last 15 years to reinstate it.
MLA Christopher Saunders expressed concerns that without proper safeguards and an account of what a project will cost over its lifetime, a government could begin an ill-advised project before an election and leave the next administration to foot the bill.
But despite the lack of a Public Sector Investment Committee, projects are heavily scrutinized before government decides to move forward with them, said Mr. Jefferson.
“I don’t want to leave the committee or the public with the impression that the projects are not reviewed. Obviously there is a strategic policy statement process, where ministries and portfolios come forward before ministers of government, and present what they wish to undertake during a year,” he said. “In those presentations, there is an indication of what the costs are in the upcoming year. Oftentimes, there are indications of what operational costs will be, as well – though not always.”
Nevertheless, the financial secretary expressed that he was in favor of reestablishing the Public Sector Investment Committee. Such efforts are under way, he said.
Mr. Jefferson said discussions are ongoing about when in the procurement process the Public Sector Investment Committee would fulfill its duties.
Mr. Miller suggested that the committee should do its job before a project goes to its “business case” – the process of analyzing financial and logistical details about how a project should be undertaken – development phase.
“It’s [a] more general and less detailed exercise where government states where it wants to invest in and what it can afford,” Mr. Miller said.