Barbados could be losing more than $100 million per year due to fraud and corruption.
Immediate past president of the Institute of Chartered Accountants of Barbados and a commissioner with the Fair Trading Commission, Andrew Brathwaite, dropped this “bombshell” at the 34th Annual Conference of Crime Stoppers International, which ended at Hilton Barbados Resort today.
Drawing from the 2012 study of the Association of Certified Fraud Examiners, which covered Barbados and three other Caribbean states, Brathwaite noted that the survey participants estimated that the typical organisation could be losing five per cent of its annual revenue to occupational fraud.
He said a small business with revenues of one million dollars, could therefore be losing as much as $50,000 each year due to fraud.
The chartered accountant deemed this a hidden expense which must be taken seriously.
“If we apply the ACFE estimate of five per cent to the total Barbados Government revenue of about $2.3 billion for the last financial year, we could be looking at annual losses due to fraud and corruption in excess of $100 million, or about the same as what is currently being spent on Barbadian students attending the University of the West Indies at Cave Hill,” declared the FTC commissioner.
He is concerned about the delay in proclaiming the Prevention Of Corruption Act, which has already been passed by Parliament and which he is pleased, clearly defines corruption and its various categories.
Brathwaite, whose Institute of Chartered Accountants had made a written submission to a Select Committee of Parliament before the bill was approved, explained that the act provided for the establishment of a Prevention of Corruption Commission which would receive asset declarations from public officials and would have the power to investigate allegations of corruption.
“The reasons for this delay are unclear to me and while it is to be hoped that some of the obvious shortfalls of the act will be quickly addressed, we must all urge our government to move swiftly, to have the legislation brought into force,” added the former ICAB president.
He said that in practice, occupational fraud tended to fall into three primary categories such as asset misappropriation, financial statement fraud and corruption, where an employee misuses his or her influence in a business transaction in a way that violates his or her duty to the employer in order to gain direct or indirect benefit.
Brathwaite pointed out that the Act includes comprehensive measures to define and criminalise corruption and for most offences, provides for a fine of $500,000, a prison sentence of five years, or both.
“Concerns continue to be expressed that certain provision of the Act are invasive and a violation of privacy. This is a concern which we must take seriously, but we must not lose sight of the seriousness of the threat posed by corruption, and we must deal with it decisively and effectively,” asserted the chartered accountant.
He told Barbados TODAY that the submission which ICAB made to the Select Committee of Parliament for a review of Corruption Commission’s power to order the declaration of public officers assets, was rejected by the government. (EJ)