Still no sign of clean full government audit

Auditor General Alastair Swarbrick

(CNS): The auditor general has stated that he will be disclaiming the government’s entire public sector accounts for the financial years 2011/12 as well as 2012/13 and that ongoing difficulties and delays are also impacting hopes of at least a qualified opinion for 2013/14. It is now almost 12 years since government produced a full set of accounts that could be properly audited, and while it is inching towards that possibility for 2014, the Office of the Auditor General (OAG) is still facing significant problems, he said.

Alastair Swarbrick stated that he is still battling with government entities regarding the completion of audits and related information. In the OAG Quarterly Report published at the end of December Swarbrick said that while more government departments were getting accounts in on time, once the statutory deadline is passed government’s finance staff are distracted by other issues and are holding up the process.

He explained that there was still some way to go towards a consolidated set of financial results and a management report on core government’s spending that the public can digest and understand.

Work on three of the five Entire Public Sector (EPS) submissions going back to 2008 has been completed, with disclaimers of opinion issued on all three. He said the finance ministry is trying to address a number of the issues with the 2011/12 and 2012/13 audits but the government auditor is proposing to disclaim them.

Swarbrick said his office did receive draft statements for 2013/14 EPS by 31 October last year in line with the timetable set out in the Public Management and Finance Law and he hoped it would be completed by 30 June this year. But the auditor said this goal was highly dependent on a number of factors, not least of which is the effective completion of the outstanding material for the various government departments involved.

In the quarterly report Swarbrick acknowledges that things are improving and nearly all the reporting entities got their accounts in on time, but said there was still significant work to be done.

“Over the last few years we have progressively been able to complete and sign off more financial statements by the statutory deadline of 31 October,” he noted but said the problems are by no means over.

“Subsequent to the passing of the statutory deadline we have identified that the effort and momentum to get the outstanding entity financial statements completed falls away within the entities, and my office faces challenges in progressing the completion of audits, as entities become unresponsive to questions and issues raised by my auditors,” Swarbrick said.

“I recognize that after the passing of the statutory deadline other priorities kick in, including the Strategic Policy Statement and the annual budget cycle. However, my concern is that without a further concerted effort on behalf of the entities, working with my auditors, the completion and certification of entity financial statements in line with the statutory deadlines will continue to be an issue into the foreseeable future, as the backlogged financial statements will continue to impede the preparation and audit of current year financial statements, and preventing the achievement of effective accountability as envisioned in the PMFL,” he said, echoing comments he has made on numerous occasions.

The auditor general said he has written to Deputy Governor Franz Manderson about the concerns and to enlist his support to apply pressure on government bean counters and their bosses to clear all outstanding financial statements by 30 June this year.

He also stated that he plans to issue a general report on the financial reporting across the entities by 30 June this year covering both the 30 June 2013 and 2014 financial years, no matter what position has been reached in regard to the completion of the outstanding financial statements.

In this quarterly report Swarbrick notes that while all audits for the 2010/11 financial year are completed, 34 of those reports have still not made their way to the Legislative Assembly, so they are not public documents. For 2011/12, while just one audit is still outstanding, only 30 reports from more than 80 entities have been tabled in the parliament. For 2012/13 ten audits have still to be completed and only 25 reports have been tabled by the relevant ministers.

Despite the optimism of the deputy governor that the government will get clean audits across the board for the 2013/14 financial year, Swarbrick’s update revealed that will not be the case as several entities, including the Ministry of District Administration, Tourism and Transport, the Portfolio of Legal Affairs and several statutory authorities, including the airport, port and turtle farm, have all received qualified opinions. However, it may be that there are no disclaimers as more than half of the audits have still to be completed.

OAG Quarterly Report 31-December-2014