Dear Sir,

I wish to add comment to the public discussion arising from the recent release of the Auditor-General’s report on the Government’s financial years ending March 2010, March 2011 and March 2012, and on the Premier’s decision to launch a Commission of Inquiry.

It may be helpful to place some context around the process that exists in Bermuda to take account of reports by the Auditor-General.

When an audit report is presented to the Speaker of the House of Assembly, it is referred on to the Public Accounts Committee of the House for review. The PAC submits its report to the House and the Minister of Finance (of the day) is obliged to respond to it.

It is not clear whether the Commission of Inquiry will usurp this process or not, as its exact terms of reference are not yet known.

It is also the case that the recent report of the Auditor-General is considerably late — by more than five years in relation to the 2010 financial year. During that period of time, significant actions were taken by the former government administration to address issues related to financial administration of the public purse.

The Internal Audit Act 2010 was enacted to provide for an independent assessment of the stewardship, performance and cost of government policies, programmes and operations.

This was to provide reasonable assurance that persons entrusted with public funds carry out their functions effectively, ethically and in accordance with the law.

The work of the Internal Audit Department has led to significant improvements in public administration since its inception in 2010.

The recently released auditor’s report highlighted, among other things, issues in the management of capital projects.

These issues were a concern for the former government administration. The concerns were met head on by the Good Governance Acts of 2011 and 2012.

The Good Governance Act 2011 amended the Public Treasury (Administration and Payments) Act 1969 to establish the Office of Project Management and Procurement, and to create offences relating to failure to comply with financial instructions. It also strengthened the Internal Audit Act 2010 and the Audit Act 1990.

The auditor’s report has understandably raised general concerns about financial administration in government.

However, it is a dated report and much has been put in place since the period under review to make improvements in financial administration in government.

The question therefore today, three to five years on, is whether or not the improvements have taken hold.

OBSERVER