Letter: Your columnist was imprecise about government finances

Dear Sir,

The column headlined ‘Gov’t money mess includes $1bn in wrongly handled funds’ [Larry Burchall, Wed. Aug. 4] was brought to my attention yesterday [Wednesday] afternoon.

To begin, I was stunned that a reputable newspaper would allow an op-ed column to be given a headline that was a falsification of facts. Do you have independent verification from a professional accountant/auditor that $1 billion has been ‘wrongly handled’ by the Government of Bermuda? Do you have independent verification that Mr. Burchall has done his sums correctly?

Mr. Burchall, as any other individual, is entitled to his opinion. However, the handling of facts should be transparent and responsible. Mr. Burchall has failed on both counts with respect to his handling of the facts pertaining to Government finances for the period April 1, 2005 to March 31, 2010.

Our review of the column indicates that Mr. Burchall’s handling of information pertaining to the financial affairs of the Government of Bermuda is both careless and imprecise:

• Mr. Burchall does not show the detailed workings of his calculations. The audited financial statements of the Government of Bermuda contain several schedules including a schedule that shows a comparison of expenditure (adjusted for non-budgeted, non-cash items), expenses and adjusted budget estimates.
• The audit of the financial statements for 2009-2010 is presently underway and final figures have not been released. What then was the source of Mr. Burchall’s figures for that period?
• It is clear that Mr. Burchall either has not read or did not understand the notes to the financial statements. These notes provide a summary explanation of the accounting treatment upon which the audited statements of the Consolidated Fund are presented. In particular, the notes make clear that the annual Estimates are prepared on a modified cash basis while the financial statements are prepared on an accrual basis.
• Mr. Burchall compounds his own confusion by implying that the recent financing/refinancing associated with the $500 million bond issue was not in accord with the Government Loans Act 1978.
• What are the “financial shenanigans” that Mr. Burchall alleges to have occurred since March 31, 2010?

The upshot is that Mr. Burchall has concocted an arithmetic mess from which he draws his preferred conclusions.

Mr. Burchall’s handling of such an important matter could have the effect of misleading members of the public as to the correct state of Government finances. This is irresponsible. It also embroils the Bermuda Sun in his mischief.

Your mission statement asserts: ‘The Bermuda Sun will bring you the most relevant and engaging stories that will enlighten and entertain. We will go beyond the headlines to bring clarity and unique insight to the issues that affect your lives.’

In the view of the Ministry of Finance, Wednesday’s column aborted that mission.

Donald A.M. Scott, Financial Secretary, Government of Bermuda

Editor’s note: Larry Burchall’s next column on government finances will run on Wednesday, August 11.