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‘Government is continuing to fail in accountability obligation’

Auditor-General Heather Thomas

The Auditor General today launched a scathing attack on Government bookkeeping warning of more than 160 years of financial statements in arrears by the end of the present financial year.

Heather Thomas said she was “exhausted hearing backlog audits are a problem plaguing many governments”, and said she expected the problem to intensify with the continuing pandemic.

She added: “The Government of Bermuda can do better and must do better.”

She said transparency was a “hallmark of good governance”, obligating the Government to share information with citizens and to hold officials accountable.

“Sadly, the Government is continuing to fail in its accountability obligation.”

Ms Thomas added: “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.

“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.”

She asked: “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 programmes and activities?

“How do you know how resources were used and what was achieved in comparison to what was planned?”

She asked how executive level “C-suite” managers such as chief financial officers and chief operating officers could be held to account.

She added: “For the audits of those accounts in arrears, is their relevance and usefulness undermined?”

Ms Thomas has repeatedly taken the Government to task over financial accountability.

Last November, in tabling her 2019 annual report in the House of Assembly, said she had issued qualified opinions or disclaimers of opinion in 10 out of 47 audits, adding: “The financial accountability process for Government continues to not function well.”

In today’s statement she called on the Government to take action over publicly funded entities who had failed to submit their accounts for audit.

Ms Thomas said: “Roughly 35 publicly funded entities have approximately 131 years of financial statements in arrears.”

She estimated the backlog could total an “unacceptable” 161 years of unaudited financial accounts by the end of March 2022.

She highlighted a shortfall in training and resources for new appointees to government boards, saying “many publicly funded entities” were turning in incomplete or insufficiently reviewed accounts

“This situation is expected to get worse because of the Covid-19 pandemic, which is presenting unprecedented challenges for all of us,” she said.

“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.”

The Auditor-General cited increasing delays in auditing financial statements, with many departments lacking in-house accountants – or with staff who were not up to date on accounting standards.

She also said “significant” time was being lost on dealing with “operational matters that should have been resolved prior to the financial statements being submitted” for audit.

It came after Ms Thomas warned in April 2020, as the island was gripped by its first outbreak of Covid-19, that sound financial management would be “essential during this unprecedented time”.

She said 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 maximise their immediate effectiveness.

“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.”

Ms Thomas, who has posted her most recent audits online here, said accountability was being undermined and Parliament left in the dark.

The Auditor-General said that while “some” government entities were consistently on time, they were a minority.

⋅ To read the Auditor-General’s statement in full, click on the PDF under “Related Media”.

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Published August 06, 2021 at 8:08 am (Updated August 06, 2021 at 9:03 am)

‘Government is continuing to fail in accountability obligation’

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