Report: Govt owed millions
After analysing Government’s financial statements, Auditor General, Leigh Trotman has raised a red flag regarding a number of outstanding loans Government made and which are yet to come to book.
The numerous loans are all detailed in the Auditor General’s 2016 report.
One of Trotman’s main concerns were advances Government provided to the Barbados Tourism Investment Incorporated without a formal contract.
“Amounts outstanding were $141 500 with accrued interest of $19 351. As at March 31, 2016, a formal contract still did not exist between the Government and the Barbados Tourism Investment Incorporated for loans made to that institution. No repayments were received from the BTI during the year under review,” the Auditor General reported.
Then there was the Small Hotel Investments Fund, which Trotman revealed in 2007 had been granted a loan of $28 million from Government, with an annual interest rate of 2.5 per cent for its Group Refurbishing Scheme. “The terms of the agreement required that the repayment commence December 31, 2010. As at March 31, 2016 no payment has been made for which the principal and interest due totalled $36 426,” the Audit General stated.
Government also guaranteed a loan of $120 million in respect of the Four Seasons Development Project in 2012, and that was called during the 2014 financial year by bankers.
The Auditor General explained that the guarantee and outstanding interest was paid to the tune of $124 329 by Government through its holding company Clearwater Bay, and brought to book in the Treasury as an account receivable. “There has been no movement on this account for the past four years,” Trotman complained. “There is no information available on whether there might be a need to write down this receivable, or when or how this amount will be repaid,” he said.
When contacted on the matter, Minister of Finance, Chris Sinckler didn’t comment, referring the matter to the Accountant General, who is responsible for all Government payments. Acting Accountant General Dane Coppin, however, said he had no comment on the Auditor General’s concerns.
Trotman also confirmed a number of other statutory corporations which owe Government millions.
He is advising that a consolidation of Government’s financial statements be conducted as a matter of priority, after the 2016 version was submitted 49 days after it was due.
“The Treasury has in the past submitted the financial statements on a timely basis, and it is hoped this occurrence is not part of the trend of late submission of statements by other state agencies,” the Auditor General said.
“In any event, the accounts of the Government, rather than being submitted for audit four months after the financial year, should actually be audited by this time. This is because of the need for up-to-date information by decision-makers,” Trotman said.
He said consolidation would help in Government’s current accrual accounting system.
“Many of these agencies have large outstanding commitments such as loans and other payables, which could make a significant difference to the overall picture of Government’s financial situation, if the consolidation were to take place,” Trotman advised.
He said information was obtained from 33 Government agencies for the 2016 report, with combined liabilities (including pending legal obligations) of $1.43 billion.
“This is a significant figure, and the absence of information on the remainder of the agencies surveyed indicates the figure, and therefore the potential impact, on the public finances, could be even greater,” he said. (BA)