Auditor general’s report outlines how IMF rapid financing instrument was disbursed

The majority of the $251 million rapid financing instrument (RFI) the government borrowed from the International Monetary Fund (IMF) last June was spent on state-owned enterprises (SOEs), a tabled auditor general’s report on the disbursement of the funds highlighted.

The Bahamas requested emergency financial assistance from the IMF in May 2020 to address fiscal needs and a $250.9 million budget deficit in June 2020, driven primarily by the COVID-19 pandemic and a revenue shortfall from Hurricane Dorian just nine months earlier.

The audit, prepared by Auditor General Terrance Bastian, showed that disbursements to SOEs amounted to $69,971,701, or 28 percent of the total funding; followed by $50 million spent on treasury bills repayments (20 percent).

Another $23,788,342 (10 percent) was spent on Hurricane Dorian-related payments; $17,898,910 (seven percent) on COVID-related payments; and $21,817,652 (nine percent) on salary deductions.

The government also spent $29,670,400 for overseas vendor payments and $33,668,242 for domestic vendor payments.

A total of $246.76 million of the financing was spent between June 9 and June 20, 2020, the report notes.

“The Public Treasury Department under the Ministry of Finance, the custodian of the public purse, accounted for the actual expenditure of the $246.76 million, 99 percent of the US $250 million IMF RFI and related public debt. The one percent residual, $3.23 million was expended in the subsequent fiscal period 2020/2021,” Bastian said in the audit report.

“The Ministry of Finance expended $30.9 million, 12 percent of the US$250 million IMF RFI for its operational services and contractual obligations.”

Expenditure in the amount of $50.84 million was disbursed through the Ministry of Finance, $39 million of which was used for small and medium-sized businesses, $1.845 million for contingencies for Family Island COVID-19 support, and $10 million for the National Insurance Board’s government sponsored unemployment program.

The Ministry of Finance also disbursed $2.3 million to the Department of Social Services for food assistance in the amount of $1.958 million, and circumstance and relief emergency in the amount of $347,471.60.

In addition, $4.25 million was disbursed to the Ministry of Health, which disbursed $557,633.40 for special allowances, $1.24 million for living accommodations and rent, $9,821.43 for emergency flights, $224,925 for medical equipment and $265,000 for motor vehicles.

“The US$250 million IMF RFI was essential in providing budgetary support and sustaining the healthcare and mitigation measure in response to COVID-19. The disbursement and uses of the funds accounted for in this report, under the various MDAs (ministries, departments and agencies), state-owned enterprises and public-private partnerships (PPPs), provide data for analytical review and outcomes,” Bastian said.

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source https://thenassauguardian.com/auditor-generals-report-outlines-how-imf-rapid-financing-instrument-was-disbursed/