FRIDAY, JUNE 22: The Premier and Finance Minister the Hon. Paula A Cox, JP, MP, today commented on the release of the Report of the Auditor General For the Financial Years ending March 31, 2009 and March 31, 2010.
In general the Auditor’s Report covers transactions of the Consolidated Fund and the systems and procedures associated with this Fund for the year-ended March 31, 2009. The Report also includes commentary on a range of subsidiary funds and public sector entities.
Premier Cox said, “The Reports prepared by the Office of the Auditor-General provide Parliament with an independent review on the adequacy of accountability and resource management practices in Bermuda's public sector. These Reports are also a valuable input for the Government to identify ways to enhance the delivery and efficiency of a range of services for all residents of Bermuda. It is important to note that audit reports are historical documents, in this case relating to financial years that occurred 2 and 3 years ago respectively.
“Accordingly the Auditor-General plays a significant role in the accountability process within Government. It is not the role of the Auditor-General to report on the very many things that are right in the financial affairs of the public sector. The Audit Act requires her reports to focus mainly on observed problems and deficiencies. Accordingly her reports identify deficiencies in accounting and accountability systems.”
The Government notes that the overall tenor of the current Report has been restrained when compared to previous years, and welcomes constructive criticism that will lead to improvements in the stewardship of the public purse.
This is the first Annual Report published by the current Auditor General and the Government looks forward to working with her to improve Government’s financial reporting. While these statements are not current for this fiscal year it does highlight the work that has been done and improvements made since the statements were reviewed by the former Auditor General.
The Auditor General has advised that in order to provide as timely information as possible, she has decided to change the focus of the Auditor General’s annual report.
For the financial year beginning April 1 2011, the annual report will focus only on the work of her Office for the prior financial year, and will include the findings from any audits completed during that year. This change of focus will allow her to report reasonably quickly after the financial year is over. Her target is to have her annual report ready for submission to the Speaker of the House of Assembly, the Governor and the President of the Senate by November 30 each year.
The Government has always been committed to effecting ongoing improvements in its Public Accounts and its reporting mandate therefore the Government supports this initiative of the Auditor General.
The Government is also very supportive of the Office of the Auditor General and the Department of Internal Audit joining forces to promote good governance. This ensures fairness and equity and helps to instill confidence in the processes of Government.
Premier Cox said, “This partnership definitely bodes well for the Government as good governance has been a priority of mine since I was appointed Premier in November 2010. As Minister of Finance, I have spent a considerable amount of my time fighting for Bermuda's credibility around the world, and we have made good progress.
“The introduction and passage of the Good Governance Act 2011 and, now, the Good Governance Bill 2012, underscored our commitment to enact measures geared to strengthen financial accountability in Government and to enhance our governance framework. We wish to communicate a strong and clear message to the public that Government has zero tolerance for behavior and practices that do not accord with the highest standards of good governance.
“This is the end of our press statement, however we have provided a summary below some of the progress that the Government has made, thus fur, in improving the financial and accountability framework relating to Public Financial Management.”
Ministry of Finance
FRIDAY, JUNE 22: Auditor General, Heather A. Jacobs Matthews, today released the 2010 Report of the Auditor General. The report covers the audit work of the Office of the Auditor General for the two financial years ended March 31, 2009 and 2010 and the Accounts of the Government of Bermuda for the year ended March 31, 2009.
Commenting on the time taken to release the report, the Auditor General noted the absence of a properly constituted Audit Committee during 2011. The Audit Committee is a legislated committee established under Section 5 of the Audit Act 1990. Its members are appointed by the Governor acting in accordance with the advice of the Premier. The primary function of the Audit Committee is to review and discuss with the Auditor General drafts of her public reports.
The Audit Committee also communicates to Cabinet any matters in the draft reports which it feels should be brought to the attention of Cabinet. After a significant delay in 2011, a new committee was appointed, became fully operational in 2012 and reviewed this report.
The Report highlights the strategic focus and plans for the Office for the coming years. “Since assuming my responsibilities as Auditor General, I have concluded that I can best serve the people of Bermuda by focusing on three broad areas: promoting the availability of accurate and comprehensive financial information to support decision making, examining the extent to which Government programs are designed and carried out with due regard to value‐for‐money and reviewing the extent to which Government ministries and departments are measuring and reporting on the effectiveness of their programs”.
The Report also includes the Accounts of the Government of Bermuda. Commenting on the reasons for the qualification of her Auditor’s Opinion on the 2009 Consolidated Fund financial statements, the Auditor General noted that the audit “revealed deficiencies in internal controls in the management of various major capital development projects. I was unable to determine whether the underlying value of the recorded assets was appropriate. As a result, I issued a qualified audit report on the Fund’s financial statements for the year ended March 31, 2009”.
The Auditor General again expressed concern about the Government’s failure to prepare consolidated financial statements for Bermuda. Consolidated financial statements would include the Consolidated Fund as well as other public funds and quangos. Mrs. Jacobs Matthews noted that “until consolidated financial statements are produced, there is a risk that users of the financial statements of Bermuda’s Consolidated Fund may mistakenly view them as the consolidated financial statements of the Government”.
Also at issue in this Report is the lateness of financial reporting. While there was a marked improvement in the quality and timeliness of information presented for the audit of the 2009 Consolidated Fund financial statements, these improvements did not extend to the financial statements of other Government‐controlled entities, funds, parish councils and aided schools.
The Auditor General noted her concerns about the unacceptable state of accounting and reporting of the government’s pension funds. She strongly recommended that “the Permanent Secretaries responsible for the organizations concerned and the respective Boards should take all possible steps to bring financial statement preparation up to date as soon as possible”.
The Annual Report will be shortly available for viewing on the website of the Office of the Auditor General at www.oagbermuda.gov.bm.