Auditor General Heather Jacobs Matthews commented on the audited financial statements of the Consolidated Fund of the Government of Bermuda for the year ended March 31, 2012 which were tabled by the Minister of Finance in the House of Assembly today [Feb 8].
The Auditor General’s opinion contained in the Independent Auditor’s Report is dated November 7, 2012 and was presented to the Accountant General on November 9, 2012.
Mrs. Jacobs Matthews expressed her disappointment that the initial financial statements provided by the Accountant General “required significant adjustments resulting in delays in the audit process and in the issuance of the Independent Auditor’s Report.”
“For the Government not to present complete and accurate financial statements for audit within six months after its year end is not in keeping with current international practice for good government accountability,” she said.
“This unacceptable delay resulted in Members of Parliament and the public not having timely access to important information.”
Mrs. Jacobs Matthews noted that her audit opinion on the financial statements of the Consolidated Fund for the year ended March 31, 2012 was qualified, as it had been in the previous three years, due to “serious deficiencies in internal control over the management of various development projects that occurred in the year ended March 31, 2009.”
She explained that the “deficiencies led her to question the appropriateness of certain transactions and the underlying value of assets as at March 31, 2009.”
Without the benefit of an independent professional valuation which was to be undertaken by the Accountant General for the current year under audit, the Auditor General advised that “she is still unable to determine whether adjustments might be necessary to tangible capital assets and the accumulated deficit as at March 31, 2012”.
The Auditor General also highlighted the section of her Independent Auditor’s Report entitled “Other matters”. She explained that “Other matters” do not represent a qualification of her Auditor’s Opinion, but is used to report significant matters that in her professional opinion should be brought to the attention of Parliament and to the public, as permitted by professional auditing standards and the Audit Act 1990.
The Auditor General said she “found it necessary to draw attention to the high level of net debt which stood at $2.4 billion as at March 31, 2012 [an increase of almost $350 million over March 31, 2011]. The Auditor General recommended that the Government take concerted action to address this fiscal challenge.
The “Other matters” section also draws attention to several incidences of non-compliance with the Government’s Financial Instructions, which form the standard for financial controls for the Government.
Mrs. Jacobs Matthews explained that, “Although these incidences of non-compliance did not lead me to qualify my audit opinion for the current year, I felt it necessary to stress the importance of the Government adhering to its internal control framework”.
The final part of the “Other matters” section of the Independent Auditor’s Report cautions readers that the usefulness of the financial statements of the Consolidated Fund for the year ended March 31, 2012 is limited.
“It is important that Parliament and the public understand that the Consolidated Fund financial statements cover only the financial results and position of Government ministries and departments, the House of Assembly, the Senate and the courts,” explained Mrs. Jacobs Matthews.
“They do not include the financial results or the financial position of other Government-controlled organizations, such as the Bermuda Hospitals Board, the Bermuda Housing Corporation, the Bermuda College, the Bermuda Land Development Company Limited and the West End Development Corporation, through which significant financial activities of the Government occur.”
The Auditor General cautioned that “Consequently, the Consolidated Fund financial statements do not represent the full nature and extent of the overall financial resources and liabilities of the Government of Bermuda”.
The Auditor General quotes the net debt at $2.4 billion, which is around a billion dollars higher than the general debt numbers often used. Bernews has attempted to seek clarity on this from the Auditor General and we will update as able
Update 8.44pm: The Auditor General has confirmed that net debt was $2.4 billion eleven months ago.
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- Document: Government Financial Statements | Bernews.com | February 10, 2013