Auditor General On Recent Financial Statements

April 3, 2021

Auditor General Heather Thomas commented on her opinion on the financial statements of the Consolidated Fund of the Government of Bermuda for the year ended March 31, 2020, included in the financial statements tabled by the Minister of Finance on March 26, 2021.

Mrs Thomas said, “Trust and confidence in the Public Sector has never been more critical than now as the Government continues to monitor and adapt its response to the Covid-19 pandemic. My job as Auditor General is to express an opinion on the financial statements in accordance with auditing standards generally accepted in Bermuda and Canada and to inform Parliament, the public and other stakeholders that the financial information presented on the Consolidated Fund – can be trusted.”

Mrs Thomas noted that her Auditor’s Opinion on the 2019/2020 Consolidated Fund financial statements was qualified with respect to inventories.

She said, “I was unable to obtain sufficient and appropriate audit evidence to support the inventories, amounting to $8 million. The Department of Works and Engineering and the Ministry of Public Works HQ were not able to perform a physical count nor were they able to perform a determination of slow-moving or obsolete inventory as at March 31, 2020. In addition, the Department of Marine and Ports was unable to support the physical inventory count results.

“Consequently, I was unable to determine whether adjustments to inventories, expenses, total non-financial assets, annual deficit and accumulated deficit might be necessary for the year ended March 31, 2020.

In addition, in her Auditor’s opinion, the Auditor General included two Emphasis of Matter paragraphs – related to the Covid-19 Impact and Morgan’s Point/Caroline Bay.

She explained that “the ‘Emphasis of Matter’ does not represent a qualification of her Auditor’s Opinion, but are used to report matters of significance that in her professional opinion should be brought to the attention of Parliament and the public; as permitted by professional auditing standards and the Audit Act 1990.”

“The Government continues to monitor and adapt measures to prevent and contain the spread of Covid-19, and to reopen and stimulate the economy. The potential future impact on the operating and financial performance of the Consolidated Fund cannot be forecasted with any precision at this time,” a spokesperson said.

“With respect to Morgan’s Point/Caroline Bay, as at the date her opinion was signed, the total costs incurred amounted to $203.1 million. The Government’s independent assessment of the value of the assets of the Consolidated Fund’s secured and unsecured claims against George’s Bay Limited could not provide a valuation range due to the high level of uncertainty related to the assets of George’s Bay Limited and the costs associated with recovering those assets. The amount recognized as recoverable could change materially, depending on the outcome of future events.

“Without qualifying her opinion, the Auditor General also drew attention to the following:

  • Net debt had increased by $329 million to $4.2 billion,
  • Guarantees provided to various lenders totaled $952 million. This is outside of the $2.9 million public debt ceiling, and
  • The usefulness of the financial statements of the Consolidated Fund for the year ended 2020, is limited.

Mrs. Thomas congratulated the Government on the release for the first time, its financial statement discussion analysis that accompanies the audited financial statements.

The Auditor General said, “This document expands on and explains information contained in the audited accounts and will enhance users’ understanding of the government’s financial position and results of operations and enable them to make judgements and decisions that are more informed.”

Mrs. Thomas noted that her Annual Reports would include detailed comments on the results of her audit of the Consolidated Fund financial statements for the year ended March 31, 2020. Those comments include sections on Matters of Special Importance, Audit Observations and Recommendations, and Key Indicators of the Financial Condition of the Consolidated Fund.

The Auditor General thanked the Ministry of Finance, the Accountant General Department and her team of professionals dedicated to improving public sector financial management and accountability.

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  1. Joe Bloggs says:

    “Guarantees provided to various lenders totaled $952 million. This is outside of the $2.9 million public debt ceiling”

    Yes, by about $949 million!