(CNS): The minister of finance has revealed that amendments to the Public Management and Finance Law next year will include powers for his ministry to enforce compliance and hold chief officers accountable over public finances. Marco Archer said sanctions are proposed that aim to improve the quality of information and timeliness of financial reporting, particularly as it relates to government’s consolidated accounts. He also revealed a number of other changes to the law to help government get a better grade from the Office of the Auditor General.
Speaking in the Legislative Assembly Thursday, the minister sought to explain the problems surrounding government’s consolidated accounts and its financial reporting. Pointing to a number of issues, Archer he said that it was also the intention to centralise the finance functions in the Ministry of Finance to improve compliance with the law and consistency in the application of Generally Accepted Accounting Principles (GAAP) as well as to meet the recommendations of the OAG over the last few weeks.
“Currently, each ministry, portfolio and office has its own separate chief financial officer and finance function. Suffice it to say, the audit office has said what it thinks of the decentralised approach every time they have issued an opinion on the government’s financial and performance reporting,” he said.
Outlining plans to also change the law to tackle the problems government has with the way it reports certain liabilities, such as the post-retirement healthcare liabilities, he said that government also disagrees with the auditor general at present over how pension liabilities are reported.
Pointing to government ambitions to cut future liabilities, he said changes to civil service benefits are on the cards, but while the increase in retirement age has been settled, introducing health insurance premium co-pay for civil servants and reducing the current CI$5 million “cap” on the maximum lifetime medical benefits are significant and changes which will require time for discussion with the civil service.
“It is expected that any such changes will not occur until 2018,” he said, as he asked anyone who knew of a more viable, palatable and less inflammatory or financially damaging approach to come forward.
These major liabilities were, he said, among a number of “macro” issues that have led to an adverse opinion on the 2013/14 EPS consolidated financial statements. But although an adverse opinion is not on government, he described it as “a significant attestation that its financial performance has improved” as accounts had been previously disclaimed.
“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,” he said.
Changing the law appears to be a major tool in the plan to improve the opinions, though he also pointed to administrative changes, including “enhanced guidance” from his ministry and restarting monthly meetings with chief financial officers.
With individual agencies making improvements in accounting, Archer said the problems with the EPS were “policy-related factors”, which would be addressed.
Archer made no comment, however, on the recent criticisms from the acting auditor general about the lack of accountability of government on public spending because the majority of financial statements are still not accompanied by proper management reports that explain the numbers and for the ongoing delays in making reports public and accessible.