Auditor General’s Report For 2011 To 2017

Auditor General Heather Thomas has published the results of her Office’s work for the years ended 2011 to 2017, noting that there are 34 organizations falling under her mandate that were at least one year behind with their financial statements, with Ms Thomas urging the “Government to take all necessary steps to correct this situation.”

The Auditor General’s office said, “Auditor General Heather Thomas’s report includes details of work completed [for each Government organization] during a seven-year period ended March 31, 2017.

“It also summarizes the contents of four Special Reports issued during that period, sets out the Auditor General’s strategic focus and provides a commentary on the administration of the Office.

Ms. Thomas explained that, “When I started my term as Auditor General, the Office had not completed an Annual Report since 2010. This was due to the significant challenges that my predecessor faced in her tenure and special investigations that were reported on.

“I wanted to bring this aspect of the Office’s work up to date at my earliest opportunity. However, I decided that it was neither feasible nor a good use of public money to produce seven separate reports covering the seven years from April 1, 2010 to March 31, 2017. Consequently, my single report covers the work of the Office for the seven years ended March 31, 2011 to March 31, 2107.”

“During the period covered by my report, the Office completed audits and provided audit opinions on 298 annual financial statements of Government-controlled organizations, funds, parish councils and aided schools’ capitation grant accounts, of which 133 were qualified opinions or disclaimers of opinion,” said the Auditor General.

“In addition, as at March 31, 2017, there were 45 more audits at various stages of completion and the resultant audited financial statements were issued between April 1 and December 31, 2017.”

The Auditor General noted that the significance of qualified opinions and disclaimers of opinion is explained in her report.

She said, “But in a general sense, they mean that all is not well and that, typically, sufficient, appropriate documentary support for amounts recorded in the financial statements is not available.

“This is not surprising, given the time that has passed between transactions taking place and the financial statements being prepared for audit. In the short term, even with significant effort to bring financial statements up to date, there are likely to be many more opinions qualified or disclaimed.”

The report concludes that “while there have been pockets of improvement, significant arrears continue to exist across the Government.”

Ms. Thomas explained that “There are 34 organizations falling under my mandate that were at least one year behind with their financial statements as at March 31, 2017. In total, these organizations had an arrears of 134 years of financial statements. This is unacceptable, and, in my report, I urge Government to take all necessary steps to correct this situation.”

“During the period covered by the report, the previous Auditor General issued a report to the House of Assembly regarding the results of the audits of the Consolidated Fund financial statements. That report included instances of serious non-compliance with Financial Instructions and related rules.

“This led to the then-Premier establishing a Commission of Inquiry to investigate the matters arising under section 3 [Audit Observations and Recommendations] of the Auditor General’s Report.”

Ms. Thomas said that, “My report explains that my staff and I spent a significant amount of time from April 2016 to December 2016 assisting the work of the Commission.”

In her report, the Auditor General explains that since assuming her responsibilities as Auditor General, she has given much thought as to where she plans to focus her efforts over the coming years.

Ms. Thomas states that, “I have concluded that I can best serve the people of Bermuda and the officials they elect to represent them in Parliament by focusing on three broad areas:

• Promoting accurate, timely and comprehensive financial information to support decision making;

• Examining the extent to which Government programs are designed and carried out with due regard to value-for-money [i.e., economy, efficiency and effectiveness] and in accordance with legislation and regulations governing Government activities, making recommendations for improvement where necessary, and

• Reviewing the extent to which Government ministries and departments are measuring and reporting on the effectiveness of their programs [i.e., is it clear what the programmes are supposed to achieve and what they are actually achieving?].”

The Auditor General acknowledges that these areas of focus are essentially the same as those adopted by her predecessor.

“I believe they continue to make sense,” said Ms. Thomas, “And, they are consistent with the approach taken by Auditors General across Canada and the Commonwealth.”

Regarding the administration of the Office, the Auditor General said that she was pleased that the Office’s spending was within its allocated budget for all seven years covered by her report.

“I believe that over the period covered by this report [the seven years ended March 31, 2017], the Office has been resourced adequately,” commented Ms. Thomas.

The challenge for Ms. Thomas is, to fill the posts for which the Office has been funded. “For example,” said the Auditor General, “At the end of March 31, 2017, we had four vacancies. In the context of the size of the Government, that may not sound too bad.

“However, in the context of our ever-increasing work load [2-3 new government entities are added every year] together with the fact that we have only fourteen funded posts for professional audit staff and students, it is very significant.”

The Auditor General’s Report follows below [PDF here]:

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