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ON THE LEFT: Someone must be held accountable


Leigh Trotman

ON THE LEFT: Someone must be held accountable

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The audit of the accounts of the ministries and departments of Government for the financial year ended March 31, 2013, was conducted by the Barbados Audit Office as required by Section 26 of the Financial Management And Audit (FMA) Act, 2007-11.
As determined by this act, the onus for the proper discharge of financial administration and the preparation of financial statements rests on the accounting officers. It is the Auditor General’s responsibility to form an independent assessment of compliance with the FMA Act and other administrative directives on the accounts, based on the audits carried out by this office.
The Barbados Audit Office is empowered to carry out audits on ministries and departments so as to provide assurance that: Adequate safeguards exist for the collection of public moneys, and that the laws, directions or instructions relating to this function have been duly observed; expenditure is properly controlled, has been properly authorized, and made for the purposes for which the funds have been appropriated by Parliament; immovable and movable property is properly procured, recorded, controlled and appropriately disposed of; public monies are expended economically and efficiently; the figures contained in the ministry’s revenue and appropriation accounts are correctly and properly stated.
Ministries and departments continue to report revenue, and, in some cases, expenditure on the cash basis even though the Government’s basis of accounting has changed from cash to accrual. Under the accrual basis, tax due for a financial year is treated as revenue for that period regardless of whether or not monies were received.
However, revenue for ministries and departments is generally being recorded when cash is received. This action is not compliant with the accrual principle and results in some distortions of the amounts reported as revenue.
The accrual basis of accounting also requires that expenses be recorded when service has been performed or goods delivered to departments irrespective of whether payment is made at the time.
There were numerous instances in which this principle was not applied, resulting in expenses not being recorded in the correct periods.
Ministries and departments need to bring their accounting practices into line with the accrual accounting requirements, by reporting revenue and expenses in the period to which they relate irrespective of whether cash was paid or received. This would allow for the proper matching of revenue and expenses in a financial year.
Many ministries and departments do not have up-to-date fixed assets registers containing the various assets and their values. This makes it difficult for auditors to verify the corresponding figure of $1.5 billion for other capital assets reported in the financial statements in respect of the assets of these agencies.
I am of the view that all entities audited should be given an opportunity to clarify issues before they become part of the final report. In a number of instances the entities audited did not provide a response and this is unfortunate and shows gross disrespect for the work of the Audit Office.
In this regard, provision may be necessary for some sanctions against permanent secretaries and heads of departments who refuse to respond to queries from the Audit Office.
(These concerns were raised in the Auditor General’s latest report released recently.)
• Leigh Trotman is Auditor General.

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