Auditor General On Consolidated Fund

December 11, 2017

Auditor General Heather Thomas’s opinion on the financial statements of the Consolidated Fund of the Government of Bermuda for the year ended March 31, 2017, is included in the financial statements tabled in the House of Assembly  by the Minister of Finance.

“As a result of the audit work carried out, I was able to conclude that the financial statements present fairly, in all material aspects, the financial position of the Consolidated Fund as at March 31, 2017, and the results of its operations, changes in its net debt, and its cash flows for the year then ended in accordance with public sector accounting standards generally accepted in Bermuda and Canada,” said Mrs. Thomas.

The Auditor’s Opinion is included in the Independent Auditor’s Report. Thomas stated that the Report also includes a section entitled “Other matters”.

She explained that the “Other matters” do not represent a qualification of her Auditor’s Opinion, but are 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 first issue I comment on in the “Other Matters” section is the Consolidated Fund’s increasing net debt”, said Thomas. “As at March 31, 2017, the net debt is $3.7 billion, an increase of $243 million over the last fiscal year. I believe that the Government needs to take concerted action to address this fiscal challenge.”

The Auditor General said that the second issue included in “Other matters” is a caution to readers that the usefulness of the financial statements of the Consolidated Fund for the year ended March 31, 2017, is limited.

“It’s important that Parliament and the public understand that the Consolidated Fund financial statements are not summary financial statements of the Government of Bermuda and, therefore, do not represent the full nature and extent of the overall financial affairs and liabilities of the Government of Bermuda,” explained Mrs. Thomas.

“The financial statements cover only the financial results and position of Government ministries and departments, the House of Assembly, the Senate and the courts. 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, and the Bermuda Land Development Company Limited, through which significant financial activities of the Government occur.”

The Auditor General acknowledged that the Consolidated Fund financial statements have been tabled some months earlier than in recent years.

Without detracting from this achievement, Mrs. Thomas said “We are not there yet! For the Government not to table audited financial statements within six months after its year end is not in keeping with current international practice for good government accountability,” she said. “Further, it means that Members of Parliament and the public do not have timely access to important information.”

Mrs. Thomas noted that her Office produces periodic reports on the results of its audits of the Consolidated Fund financial statements. These reports include sections on Matters of Special Importance, Audit Observations and Recommendations, and Key Indicators of the Financial Condition of the Consolidated Fund.

“I expect to issue such a report covering the audits of the years ended March 31, 2013, 2014, 2015 and 2016 during the next few weeks. And, we are currently working on a report covering our audit for the year ended March 31, 2017,” said the Auditor General.

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