The SAGE report “it is depressing, but it is also enlightening – for a whole host of wrong reasons”

Quite a lot of the SAGE Commission’s findings have been covered in the media. Sadly, though, I have not seen any commentary from people who could take a slightly different look at the findings.

Below, I’ve highlighted some of the report findings which I think have not had much, if any, media coverage.

While writing it I could not help but feel a sense of injustice – injustice for the people of Bermuda and the taxpayers that such a shambolic operation (called Government) was allowed to go on and on, unchecked or with no methodology for checking, and which seemed to have a blatant disregard for the recommendations of democratically important watchdogs.

It seems abundantly clear there was almost total disregard for, or ignorance of, the public purse – in one part the SAGE Commission says “in some cases, (there was) little awareness of the severity of the issues facing Government”.

One section (which I have tyed out in full below) titled BUDGETARY CONTROLS seems, to me, to be a complete misnomer. There don’t seem to be many or any!

If you have not read it, you should. It does not take long, it is depressing, but it is also enlightening – for a whole host of wrong reasons.

Some SAGE snippets:

  • Inefficient use of      resources trusted entrusted to Government by the taxpayer should no longer      be tolerated.
  • Recommend $310m of expense      reductions over the next four years.
  • At the Permanent Secretary      and Head of Department level, there is little evidence of performance      monitoring, objective measurements and, in some cases, little awareness of      the severity of the issues facing Government. (WOW! – My words.)
  • Pension schemes for      Government employees and Parliamentarians are close to $1bn underfunded.
  • In addition, the      contributory pension scheme on which Bermudians rely for retirement income      was $2bn underfunded as at August 1, 2011.
  • We are aware that a      Leadership Competency Review was undertaken in 2011 by the National School      of Government with 50 of the most senior employees of Civil and Public      Service. We were refused access to      this report despite clear statutory authority for such access. (BOLD      IS MINE. THIS IS OUR RIGHT TO KNOW!)
  • The Auditor General’s      annual reports contain large numbers of recommendations that remain      outstanding for several years – in some cases for as long as twenty year.
  • Government has negotiated      some union contracts that grant benefits, such as sick leave and the      provision of overtime pay, that are exorbitant and significantly higher      than the norm in the private sector.
  • The scale of benefits      under the current Collective Bargaining Agreements are financially      unsustainable (both wage rate increases and benefits.)
  • The Commission was told      many times during interviews with Civil and Public servants that,      frequently there are no consequences for these infractions. We have seen      no evidence to the contrary.
  • The current facility at      the Mid-Atlantic Wellness Institute requires a substantial upgrade, which      is estimated to cost $40m.

This deserves a part on its own:



In the SAGE Commission’s meetings with the Budget Director, the Financial Controllers and a number of Department Heads, we learned that:

  1. Budget reductions were      directed by the Ministry of Finance that, in the opinion of those with the      responsibility for implementing them, were unrealistic and unachievable      (Remember the ten percent across the board reductions ordered by then      Finance Minister Paula Cox? My words.)
  2. There was little      meaningful engagement by the Ministry of Finance with the relevant      Ministries and Departments to understand the issues they faced and thus no      combined effort to either make the difficult political (with a small p)      choices that were required to cut or reduce services within the Ministry      or Department or engage with other Ministries or Departments to determine      where alternative reductions were feasible.
  3.  While the Budget Director regularly      reviewed budget versus actual reports and raised, with the relevant      Departments or Ministries, the possibility or likelihood of budget      overruns, there was no mechanism at the Ministry of Finance level to      meaningfully and proactively engage with the Permanent Secretaries      individually (or as a whole) to resolve the issues and bring the overall Government      Revenues and Expenditures in on budget.
  4. In our interviews with the      Secretary to the Cabinet and the Financial Secretary, the blame for budget      overruns and persistent overspending was largely placed on politicians.      While there is an established process by which the elected representatives      can override the advice of the senior Civil Servants, there are certain      matters, which, under Financial Instructions, belong solely to the Civil      and Public Service. Based on reports made to us in our interviews and in      the reports of the Auditor General, there are too many instances of      breaches of Financial Instructions, generally without penalty, for us to      conclude that no blame rests with senior members of the Civil and Public      Service.

Phew…………………………… what a mess.



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