The annual accounts of the Consolidated Fund of the Bermuda Government for 2015-16 have been given an unqualified audit opinion.

Finance minister Bob Richards welcomed the news, which he pointed out was the Consolidated Fund’s fourth consecutive clean audit after six years of qualified opinions. Current account expenditure was less than originally estimated, Mr Richards noted, while revenue was higher than projected.

The Consolidated Fund deficit for 2015-16 was $160.6 million — narrower than the $220 million budget projection by $59.4 million, or 27 per cent.

Mr Richards put the decreased deficit down to “prudent management” of expenditures. However, in her report tabled with the House of Assembly yesterday, Auditor-General Heather Thomas urged Government to take action to address rising debt levels.

The Consolidated Fund is the general operating fund of the Government, through which it conducts most of its transactions.

“I am pleased to note that the annual accounts of the Consolidated Fund of the Government of Bermuda were given an unqualified audit opinion for the fourth consecutive year following six years of qualified opinions,” Mr Richards told MPs.

“Despite the clean audit opinion, the Auditor-General has, for the sixth consecutive year, included explanatory paragraphs as ‘other matters’ which she deems appropriate.”

Ms Thomas’s first concern was the level of the net debt, which increased by $186 million to $3.5 billion.

She said: “Government needs to take concerted action to address this fiscal challenge.”

The auditor also pointed to ongoing incidents of non-compliance with the Government of Bermuda’s Financial Instructions, which she said “revealed weaknesses and deficiencies in the control environment”, and limitations with the preparation of summary financial statements.

Mr Richards said: “The Government shares the auditor’s concerns in these areas and has already started to tackle these matters.”

An enhanced Financial Instructions training programme is being developed, he said, while the Ministry of Finance has already put in place a three-year plan to eliminate the deficit and ultimately reduce the debt.

Financial highlights presented by the minister included:

• Total revenue raised by the Consolidated Fund for 2015-16 was approximately $960.7 million, an increase of $57 million from 2014-15.

• Revenue from payroll tax was $361.1 million, up from $326.9.

• Revenue from Customs Duty was $192.6 million, up from $171.5 million.

• Total revenue on a modified cash basis was $953.6 million: $22.3 million more than original budget estimates.

• Total current expenditure on a modified cash basis was $1.071 billion: $12.1 million less than original budget estimates.

• Total capital account cash expenditure was $43.7 million: $24.6 million lower than the original budget estimate.

• Total capital and current account cash expenditure was $1.114 billion: $36.7 million lower than the original budget estimate.

• Modified cash all-inclusive results from government operations was a deficit of $160.6 million, $59.4 million less than was originally budgeted.

• Net public debt, excluding guarantees, was $2.218 billion: an increase of $168.1 million.

Mr Richards said: “The decreased deficit is a result of prudent management of discretionary current and capital expenditures.

“The level of debt is not only unsustainable but economically and fiscally imprudent and the Government has already committed to intensify our efforts and determination to eliminate the government deficit, and eventually pay down on our debt.”