Bermuda’s Auditor General sounded another warning in her latest report on the island’s financial status for the year ended March 31, 2018, saying: “Each year of inaction exacerbates the problems. The problems are serious.”
Heather Thomas repeated concerns raised in a previous report on the accountability process for government, which is “not functioning well”, in her view.
Heading the list of concerns – the lack of supporting documentation and the fact that several public-sector organisations are more than a year behind on their accounts.
She has called on the Government, once again, to introduce long-term plans to deal with the island’s deficits and debt, and the island’s unfunded pension liabilities.
“In my view, Government needs to be clear about how its goals and priorities will be affected by fewer resources and needs to ensure that the reduced resources are aligned in a way that maximises their effectiveness and has the least impact on the quality of its service delivery,” said Ms Thomas.
“Government should make getting to grips with the debt and the deficit its highest priority.”
The audit report was tabled in the House of Assembly on Friday.
“Out of the 64 audits or reviews of annual financial statements of government-controlled and other organisations, funds, parish councils and aided schools’ capitation accounts that we completed during the year, 24 resulted in qualified opinions or disclaimers of opinion,” said Ms Thomas.
“In a general sense, they mean that all is not well and that, typically, sufficient, appropriate documentary support for amounts recorded in the financial statements is not available.
“The number of qualified or disclaimed audit opinions, coupled with the fact that as at March 31, 2018 there were 40 organisations falling under my mandate that were at least one year behind with their financial statements (with a total of 133 sets of financial statements in arrears), is of great concern to me and, I suggest, should be to legislators and the people of Bermuda; the accountability process for Government is not functioning well,” she added.
And once again, as in previous reports, she said the Government was “making decisions without knowing the combined financial position of all the organisations that make up the Government entity”.
Essentially, she said there were still “no effective, comprehensive 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”.
“Consequently, the resources available to carry out Government programmes effectively are predictably being impacted by increasing debt-servicing costs.
“Another of the special matters in my report”, said Mrs Thomas: “Is the need for Government to provide the House of Assembly and the public with the analytical information that would help them understand Government’s Consolidated Fund financial statements and its financial condition.
“In the absence of Government providing such important supplementary information, my report analyses key sustainability and flexibility indicators of the financial condition of Government’s Consolidated Fund for the five years ended March 31, 2017.