Auditor General warns Government may get third consecutive qualified audit
The Auditor General said Government could have another qualified audit for the current fiscal year.
A week ago Bermuda’s Consolidated Fund was released for the previous fiscal year, ending March 31, 2010.
Auditor General Heather Matthews gave it a qualified audit for the second year in a row meaning she is not satisfied that Government’s financial statements fairly reflect its financial position
Her concerns stemmed from “deficiencies in internal control over the management of various development projects” last year she questioned the underlying value of Government assets.
She said: “As a consequence of last [fiscal] year’s qualification, and without the benefit of an independent professional valuation on the assets in question I am still unable to determine whether adjustments might be necessary to tangible assets, assets under construction and the accumulated deficit as of March 31, 2010.”
Ms Matthews spoke with The Royal Gazette this week about the report.
She said some civil servants have not been following the Government’s financial instructions, put in place to ensure public money is properly spent.
“There have been a lack of controls and serious deficiency,” she said. “Payments have to be fully supported and not only that they need to be verified and there are proper controls in place.
“With TCD there was no independent verification, that is a breach of financial instructions. I am sure that there are departments and Ministries following the financial instructions but the ones that we are looking at are the major capital projects where there has been a breakdown in internal controls and it is so pervasive and it is not just one or two, it is so pervasive we cannot give it a clean opinion.”
In addition to her special report into the TCD emissions testing facilities, Ms Matthews and her team are working on another special report involving a Government contract for the Dockyard pier, the cost of which climbed from an initial estimate of $35 million to $60 million.
Ms Matthews said her office and the Accountant General will value the Government’s large assets soon
“We will require an independent valuation of the projects the new court building, the Dockyard pier, TCD that will give us an indication as to whether what is shown as an asset on financial statements is an appropriate value.
“This can lead to, if the valuation comes out lower, a writedown of the assets on the consolidated fund.
“A professional valuer will do that and assess what the building is valued at.
“We are hoping that will be done soon. The Accountant General will be getting a valuer and we will get a valuer.”
“The financial statements are those of the Ministry of Finance so it is possible the qualification could remain for the next year.”
She later added: “If things are in a similar position you will see a qualified opinion [on the Consolidated Fund for this fiscal year], the next fiscal year is only two months away. The ones the Minister just tabled is from 2009/2010.”
When asked to expand on the deficiencies of internal controls she said the main issue was the need for a segregation of duty. She said one person should initiate the transaction while another person should make sure the proper accounting had been done and sign for it.
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