Finance Minister Marco Archer says accounting and financial controls are improving, despite an adverse opinion and other criticisms from the auditor general on government financial statements from the past two years.
Mr. Archer made his remarks during the Legislative Assembly last week.
Since new government audit rules were introduced in 2004, this is the first year the Auditor General’s Office has given government an “adverse opinion.” Mr. Archer said the earlier financial statements received “disclaimers,” meaning auditors could not give an opinion.
“Government sees this as a significant attestation that its financial performance has improved and evidence exists to substantiate this improvement,” Mr. Archer said.
He told the Legislative Assembly that the government “intends to use this opportunity to address the issues that caused the issuance of an adverse opinion and, aims to achieve greater accountability and transparency.”
When Acting Auditor General Garnet Harrison released the audits earlier this month, he agreed with the finance minister: “As we reported last year, the time lines and quality of the accounting information presented for audit continues to improve.”
But the auditor was not without criticism of government. Regarding the audits, released in early November, he wrote, “This report provides clear evidence to support the need for stronger leadership of the financial function in Government.
“I am very concerned about how long the Government is taking to develop the policies, systems, procedures and practices that are required to prepare quality consolidated financial statements and other financial reports for the Legislative Assembly.”
Last week, the finance minister attempted to address some of the auditor’s concerns and explain the issues to legislators.
Mr. Archer said the adverse opinion was not due to the financial statements for each of the ministries and other parts of government, but instead due to how “macro” issues were accounted for across government. These issues, he said, included leaving parts out of the financial statements, incorrect balances, and incomplete revenue figures.
Mr. Archer said auditors “reported that there is no system in place to ensure that the Government is collecting and reporting all revenues and related receivables.”
“The Ministry of Finance intends to conduct a review of Government revenue items to determine which items can be assessed for completeness,” he said. “Going forward, revenue completeness should then be assessed by respective agencies at the end of each quarterly report to Cabinet.”
The auditors cited government for not including $1.2 billion in healthcare liabilities for retirees, and for not including pension obligations. The finance minister said government decided not to include retiree healthcare costs in the financial statements, instead including the liabilities in the footnotes, something Mr. Archer said was in line with accounting practices in the United States and Canada, but not permitted by public accounting laws here.
He told legislators that he intends to put forth an amendment to the Public Management and Finance Law to allow retiree benefits to be included as footnotes and not in the actual financial statements.
To address the rising retiree costs, Mr. Archer said, “Government is also exploring options to reduce the pension and post-retirement healthcare obligations such as: increasing the retirement age of Civil Servants from 60 to 65 years; introducing health insurance premium co-pay for Civil Servants; and reducing the current CI$5 million cap on the maximum lifetime medical benefits for Civil Servants.”