Minister of health Mark Scotland tabled long delayed annual reports from the Health Services Authority for the years 2004 to 2007 at the Legislative Assembly on Monday.
Mr. Scotland said the health authority, which was established in July 2002 when it transformed from a government department to a statutory authority, had been unprepared for that transition, and this had contributed to the failure to submit financial reports over the years.
He said the original plan had been for the Health Services Authority to be established on 1 January, 2003, but this had been brought forward to 1 July, 2002, giving it a “very compressed time frame of just five months to address legal, administrative, human resources, financial and other operational issues” instead of one and a half years.
The high turnover of key management staff, including the chief financial officer, the chief executive officer, HR director and medical director, added to the difficulties faced by the Authority in producing financial records, he said.
The financial annual reports tabled in the Legislative Assembly on Monday carried disclaimers of opinion from the Health Services Authority due to the incomplete records over the years.
According to a statement by chairman of the board of directors of the Health Services Authority, Canover Watson, in the 2004 annual report, there were “no consistent financial records maintained on which we could prepare financial statements”, despite contacting the previous board and staff, who advised the current board that records had been damaged in 2004’s Hurricane Ivan and that there had been a lack of electronic financial management system in the HSA at the time.
In the 2003/2004 budget, the total expenses of the HSA that year was estimated to be $43.9 million, with a net income loss of $5.7 million. There was no information available to reconstruct exactly what was actually spent or what the net income was.
In the statement, Mr. Watson said that external auditors had determined it was “almost impossible” to reconstruct accurate financial documentation for the 2003/4 and 2004/5 financial years. “[It] would have cost the HSA a huge financial sum and would not yield any credible information,” he said.
Since its establishment, the HSA has operated at a loss and required annual injections of millions of dollars from the government to operate. In the financial year, 2005/6, government injected $11.9 million into the HSA; $16.7 million in 2006/7; $13.4 million in 2007/8; $9.1 million in 2008/9 and $2.2 million in 2009/10.
In the last financial year, however, the HSA recorded its first profit of $2.3 million.
Mr. Scotland told the Legislative Assembly that the HSA now had in place strategies to ensure full compliance and that from 2010 onwards, there would be no need for disclaimers of opinion on its reports.
The reports presented by the health minister were the latest in several outstanding financial statements tabled before the House in recent months.
Chairman of the Public Accounts Committee, Ezzard Miller, on Monday tabled a report on financial and performance reporting by the Auditor General, which stated that progress had been made in clearing the backlog of financial statements from government entities.
In his executive summary in the report, Auditor General Alastair Swarbrick said it was expected that up-to-date financial statements all but a few of the government entities would be submitted by the end of February.
Mr. Miller said he was troubled by the response to the Auditor General’s report by the Ministry of Finance, which is headed by Premier McKeeva Bush.
“It appears to me from its response that the Ministry of Finance is more concerned with defending its position than accepting the responsibilty under the PMFL [Public Management and Finance Law] to taking steps to get the work completed,” he said.
In its response to the report, the Ministry of Finance stated that contrary to general belief, the law does not give the ministry authority to “sanction nor impose penalties on chief officers for their non-compliance with the law”. It went on to detail the work of a task force specially set up to assist ministries and portfolios produce outstanding financial statements.
Mr. Miller said that he had sought a legal view from the Attorney General’s office last October on whether chief officers and chief financial officers could be prosecuted for failure of their relevant departments or public bodies to submit financial reports, but said he was still awaiting a response.