‘Concern About Backlog Of Unaudited Accounts’

August 6, 2021 | 16 Comments

The Auditor General “expressed her concern about the backlog of unaudited accounts” and “called on the Government to take the necessary action,” noting that “roughly, 35 publicly funded entities have approximately 131 years of financial statements in arrears.”

Negative Impact Of These Accounts On The Overall Transparency”

A spokesperson said, “In the Auditor General’s last editorial on the state of financial statements of government entities, she expressed her concern about the backlog of unaudited accounts – the negative impact of these accounts on the overall transparency of government financial reporting; and called on the Government to take the necessary action to address the increasing number of publicly funded or controlled entities, who have failed to submit their accounts for audit.”

The Auditor General said her “role supports the governance responsibilities of oversight, insight, and foresight. It is by conducting independent audits and the opinions attached to these audit reports, that I serve the people of Bermuda and their elected representatives. Accordingly, opinions attached to financial statements’ audit reports speak to whether the responsibilities entrusted to the government are satisfactorily performed and intended results achieved’. The resulting discussion of the reports in the House can contribute to better governance and accountability, a stronger public service, more informed decision-making and greater public trust and confidence.

“35 Publicly Funded Entities Have Approximately 131 Years Of Financial Statements In Arrears”

The Auditor General added, “That the fulfilment of her duties continue to be hampered by delays in preparing the accounts for audit, which continues to result in an increase backlog. Roughly, 35 publicly funded entities have approximately 131 years of financial statements in arrears. She estimated that by the end of the March 31, 2022 financial year, this backlog would have increased to a cumulative total of more than 161 years of unaudited financial accounts. This is unacceptable to her and should be to the citizens of Bermuda and our elected officials.’

 ”Due To A Myriad Of Reasons”

“The delay in the preparation and release by government-funded entities of financial statements for audit by her office is due to a myriad of reasons including:

“[i] Government failure in providing the appropriate training/tools and resources for new appointees to government boards, specifically as it relates to their fiduciary responsibilities, as in some cases appointees are not briefed on their full fiduciary responsibilities of government board members.

“[ii] Information provided to my office by many publicly funded entities is often incomplete or not reviewed in sufficient detail by management or those charged with governance resulting in multiple accounting adjustments, or the financial accounts not being submitted at all. This situation is expected to get worse because of the Covid-19 pandemic, which is presenting unprecedented challenges for all of us. However, it should be noted that even before the Covid-19 pandemic, the Government of Bermuda had significant challenges in properly preparing its financial accounts for audit. These challenges have only been exacerbated over the last two years by the Covid-19 pandemic.

“One of the legacies of this extraordinary period will undoubtedly be the longer-term financial impact of the interventions taken by the Government. The unparalleled nature and the scale of the fiscal measures being taken in response to Covid-19 reinforce the need for strong public financial management in order to maximize their immediate effectiveness.

The Government Of Bermuda Can Do Better And Must Do Better”

“Strong public accountability for the resources used in fighting the pandemic, through high quality financial reporting, is essential to making the overall impact on public sector finances fully transparent. The Auditor General said, “She’s exhausted hearing backlog audits are a problem plaguing many governments. The Government of Bermuda can do better and must do better!’

“[iii] Financial Statement audits are taking longer to complete, as many publicly funded entities do not have an in-house accountant on staff, or where there is an in-house accountant, they may not be well versed in the relevant accounting standards, which are ever evolving. A significant amount of time is also being spent in resolving operational matters that should have been resolved prior to the financial statements being submitted to her office for audit.

“Accountability is Parliament’s instrument for checking the actions of the Executive arm of government and its public administration activities. Consequently, when financial statements are not prepared and released in a timely manner, accountability is undermined as Parliament and other users of these financial statements are not being provided with complete, accurate or timely information on the performance of the Executive Branch of Government.

“Increases The Potential And Likelihood Of Distrust, Public Corruption And Fraud”

“Additionally, because the Audits when undertaken relate to accounts of several prior years, the relevance of these audits is undermined. When financial statements are not provided in a timely manner, users requiring this information are relegated to the realm of extrapolating information from stale data and making educated guesses with respect to resources being used.

“This increases the potential and likelihood of distrust, public corruption and fraud. On the other hand, if the financial statements are prepared, released, and audited in a timely manner, the Government can reap the benefits of enhanced accountability, and increased public trust.

“Government Is Continuing To Fail In Its Accountability Obligation”

“The hallmark of good governance is transparency, which is the government’s obligation to share information with citizens and to hold officials accountable for the conduct of the people’s business. Sadly, the government is continuing to fail in its accountability obligation.

“In the absence of complete, accurate and timely financial statements and other appropriate financial reports, Bermudians are encouraged to consider the following questions:

  • [a] How does the government make decisions to stimulate the economy and achieve key objectives of the government to support Bermudian citizens and protect vital public services without being accountable to the very people funding these programs and activities?
  • [b] How do you know how resources were used and what was achieved in comparison to what was planned?
  • [c] How are those charged with governance and the C-suites [CFO, and COO] being held to account for the financial performance of their entities?
  • [d] For the audits of those accounts in arrears, is their relevance and usefulness undermined?

“Some Entities Across Government That Have Consistently Produced Timely Accounts”

“The Auditor General, said she’s not painting all publicly funded entities with the same brush, as there are some entities across government that have consistently produced timely accounts for audit, in accordance with the prescribed standards; however, these entities represent a minority of ‘Our Universe’ clients as per her website. Her office will continue to work with those public entities on a solution to develop a collaborative plan for both the preparers and her Office, along with timelines to clear the accounts in arrears.

“Please go here to see the last accounts audited.”

Read More About

Category: All, News, Politics

Comments (16)

Trackback URL | Comments RSS Feed

  1. Burt's Beard says:

    By my magnificent whiskers!
    30-6.

  2. Question says:

    We’re well on our way to becoming a failed state.

    We just paid 6,500 civil servants full pay to sit at home for a year. Would it have killed them to bring their accounts up to date?

  3. Joe Bloggs says:

    I see another qualified audit opinion in our future.

    “roughly, 35 publicly funded entities have approximately 131 years of financial statements in arrears”

    A lot of money can go missing in 131 years.

    “This increases the potential and likelihood of distrust, public corruption and fraud.”

    In whose estimation? I could not possibly be more suspicious of our elected officials

  4. LOL (original) says:

    “Roughly, 35 publicly funded entities have approximately 131 years of financial statements in arrears. She estimated that by the end of the March 31, 2022 financial year, this backlog would have increased to a cumulative total of more than 161 years of unaudited financial accounts.”

    How is the person or department that deals with this?

    • Truth is killin' me... says:

      The ones responsible are the same ones that increased your LAND TAX…Finance Minister et al

  5. Ringmaster says:

    Nothing will change because the people in charge are not professionals as was the case many years ago. The CS has been so packed with political lackeys with little education and no business experience they have no idea how to run a department, or manage staff. Add on complete unaccountability and freedom from being fired and why do a good job? There is no incentive, and worst an incentive not to let the Auditor General and public know what is going on by not filing audited accounts. I wonder what information is given to banks when the Min of Fin goes on his next begging spree. One day they may call out the accuracy of that information.

    • Verdad says:

      3 words and a full stop: Inept Civil Servants.

    • Joe Bloggs says:

      I am not going to accuse civil servants of being political lackeys or uneducated, nor should I be taken to accept that description, but I will agree that civil servants have no incentive to see that a good job is done and that civil servants are not held accountable for their actions.

  6. Dunn juice says:

    Bitcoin will save us.
    Well done voters.

  7. Verdad says:

    3 words and a full stop: Inept Civil Servants.

  8. Dose it really says:

    Does it really suprise anyone ?? I don`t see how!! I can promise you this, it WILL get alot worse. Be ready people!

  9. puzzled says:

    Auditor.
    Unaudited.

    Cover ass.
    Go figure.

    There is and never was a system with real people with balls to hold others accountable.

    • Joe Bloggs says:

      That is unfair to our past Auditors General.

      Larry Dennis pissed off the PLP Government so much they practically moved his office into a broom cupboard. Someone also arranged for his offices to be burgled and certain information stolen. I do not recall any prosecution for that.

      Heather Jacobs-Matthews was not much better. The PLP Government thought she would be a soft touch. She was anything but.

      Our current Auditor General, Heather Thomas, has not been a soft touch either. She is certainly no friend of the PLP Government when she gives warnings like this.

Leave a Reply