When a $20 million overspend on civil servants’ raises came to light last year, government leaders told an angry public that they didn’t know who to blame.
Now, Auditor General Sonia Webster has provided answers.
The Deputy Governor’s Office and the Ministry of Finance, she found, failed to give Cabinet a full and accurate picture of the true cost of the 2024 salary increases — despite early warnings that the final bill could be nearly three times higher than the estimate provided by consultant PricewaterhouseCoopers (PwC).
Ms. Webster’s May 27 report, which was laid in the House of Assembly on Tuesday, criticises the offices for withholding or downplaying crucial information before lawmakers approved the budget in December 2023.
The result was a shortfall of more than $20 million, which Premier Dr. Natalio “Sowande” Wheatley’s government had to plug partly through a Schedule of Additional Provisions passed last year.
“There were indications that the cost of the implementation would be substantially higher than the consultants’ estimates, but this information was not presented when the decision was brought before Cabinet,” Ms. Webster wrote in her report.
She added that the “absence of a reliable, independent estimate” was a key factor in the overspend.
Missed warnings
The report reveals that the Ministry of Finance’s Budget Unit warned as early as October 2023 that the new salary regime could require $25.5 million in extra salaries plus $2.2 million in statutory contributions such as payroll taxes and social security fees — almost triple the $9.4 million estimate provided by PwC.
But this higher figure, Ms. Webster wrote, was not included in PwC’s report the following month — and it was never disclosed to Cabinet.
“The Deputy Governor’s Office advised that they did not make the disclosure because the [Finance Ministry’s] amounts were not definitive,” Ms. Webster wrote. “We received no indication that the DGO requested a more definitive estimate to support the PwC amounts.”
Instead, Cabinet proceeded with PwC’s lower figure — even though the consultant’s report cautioned that its estimate should be quantified by the ministry — and lawmakers approved a budget with $11.7 million earmarked for increases to salaries and corresponding taxes.
By August 2024, Mr. Wheatley was forced to acknowledge the shortfall in the House of Assembly, triggering opposition calls for this resignation.
PwC assumptions
Ms. Webster also reviewed PwC’s analysis, finding that it relied on inflated staff numbers — using 3,665 authorised positions when only 2,497 were filled — and assumed that all staff would be placed at entry-level steps on the new salary scale.
This combination led to the projection that understated the cost by about $20 million, she explained.
“The variance between PwC’s projections and the actual figures stemmed from differences in staff numbers and, to a lesser extent, their placement within the salary grades,” Ms. Webster wrote.
PwC’s estimates, however, were not the root cause of the overspend, according to the report.
“While the PwC computations were based on the information provided and included a request for verification by the Ministry of Finance, the absence of a reliable, independent estimate to support the figures contributed to discrepancies between projections and actual expenditures,” the auditor general wrote.
“There were indications that the cost of the implementation would be substantially higher than the consultants’ estimates, but this information was not presented when the decision was brought before Cabinet.”
Though funds to cover the increases were eventually found across multiple line items in the budget, the auditor general also highlighted a lack of transparency in the allocation process.
“Increased emoluments were provided for within the initial 2024 authorised budget without full explicit disclosure of the actual cost,” she wrote. “This ensured that the increases were covered financially, but subsequently led to concerns about fiscal transparency and public accountability in the House and the broader public.”
Recommendations
To address the issues she found in her review, Ms. Webster recommended that the Deputy Governor’s Office and Ministry of Finance explain why higher cost estimates were withheld from Cabinet and the HOA.
The Governor’s Office told the Beacon yesterday that Governor Daniel Pruce had written to Deputy Governor David Archer Jr. and Financial Secretary Jeremiah Frett “in response to recommendations made following the audit.”
The DGO told the Beacon that the DGO and the Ministry of Finance were in the process of completing their submission to the governor.
“The Office of the Deputy Governor also takes this opportunity to encourage members of the public to carefully read the report and its contents,” the DGO stated.
“Specifically, the Office of the Deputy Governor would like to further publicly erase, as is clear in the auditor general’s report, any innuendos or suggestions that through the implementation of this project, funds were misappropriated or missing as a result of the compensation review.”
The DGO added that sections 44-47 of the audit report make “clear” that “sufficient funds were made available to cover the actual expenditure of the salary conversions for public officers, which considered further adjustments for increment payments and related arrears.”
The office also noted its “commitment to transparency and accountability” in the public service.
Before the compensation review, the DGO added, no such exercise for the public service had been undertaken for more than 20 years.
Political fallout
Despite the DGO’s reassurances, the report’s findings are likely to fuel an already heated political debate.
After the overrun came to light last year, opposition member Myron Walwyn labelled the discrepancy a “$20 million mistake” and demanded Mr. Wheatley’s resignation as finance minister. Opposition member Stacy Mather, meanwhile, called for a public apology.
Other members of government, however, defended the premier, arguing that Ms. Webster’s investigation should be allowed to run its course before assigning blame.
Mr. Wheatley and other HOA members did not respond individually to requests for comment, but the HOA released a general statement about Ms. Webster’s report.
“With the report now officially before the House, members will undertake a thorough review of its findings, engage in detailed discussions, and provide a formal response consistent with established parliamentary procedures,” the HOA stated. “The House reiterates its dedication to transparency, accountability, and proper due process.”
PwC did not immediately respond to requests for comment.
