The Government has to get its accounts in order after “significant arrears” were found in financial statements covering a seven-year period, the Auditor-General said in a hard-hitting report released yesterday

Heather Thomas said that 34 government organisations were at least one year behind with their financial statements at the end of the 2017 financial year — equivalent to 134 years.

She added: “This is unacceptable, and, in my report, I urge Government to take all necessary steps to correct this situation.”

Ms Thomas warned that the Government was “making decisions without knowing the combined financial position of all the organisations that make up the Government”.

She said: “It is not providing the House of Assembly or the public the analytical information that would help them understand Government’s financial statements and its financial condition.

“There are no effective long-term plans for reducing the annual and accumulated deficits or the associated debt, the unfunded liabilities of its major pension plans or the size of taxpayer indebtedness, all of which continue to grow unsustainably.”

Ms Thomas said that each year of inaction worsened.

She added: “And the problems are serious.”

Ms Thomas said a plan to cut debt and the deficit should become “the highest priority”.

She was speaking as her office published its scrutiny of Government departments for the financial years ended from March 2011 to March 2017.

The time frame spanned the last One Bermuda Alliance government and almost two years of the previous Progressive Labour Party administration.

Ms Thomas reported on all seven years in one document and added seven recommendations, as well as responses to the recommendations from the Ministry of Finance.

Ms Thomas highlighted qualified opinions and disclaimers of opinion that suggested “all is not well” in the 183-page report.

She said there had been “pockets of improvement” in government accounting, but that documentary support for amounts recorded in the financial statements were not available.

Ms Thomas said the Government should consolidate all its finances from this financial year, and tackle the unfunded liabilities of its pension funds and health insurance.

Other recommendations included acting on the advice of the Sage Commission on government spending and efficiency, and dealing with businesses that had defaulted on tax

payments.

Ms Thomas, who became Auditor-General in 2016, said that at the start of her term, the office had not completed an

annual report since 2010.

She added that Heather Jacobs Matthews, her predecessor, had faced “significant challenges”.

Ms Thomas said that the lack of documentary support for transactions and delays in the preparation for audit of financial statements meant that in the short term, “even with significant effort to bring financial statements up to date, there are likely to be many more opinions qualified or disclaimed”.

She added that the Commission of Inquiry set up in 2016 to look at failures to comply with government financial instructions had taken up “significant” staff.

Ms Thomas said that, while the Auditor-General’s office had kept within budget over the seven-year period, the workload required more staff.

She added the office should be “organised differently”, with more senior auditors and “at least two posts” delegated to performance auditing.

Ms Thomas said that ministers who ran departments which were in arrears should take “all possible steps to bring financial statement preparation up to date as soon as possible”.

She added that her office and the Public Accounts Committee should work together better to ensure the ship of state was kept on an even financial keel.

• To view the full report, click on the PDF link under “Related Media”