From the Auditor General’s Report 2 - by Barbados Today March 25, 2015

The audits of a number of Government agencies are in arrears, and this must be of concern for Government.

So says Auditor General Leigh Trotman.

In his just released 2014 report, he points out that these agencies have received hundreds of millions of dollars and should have had their accounts audited annually as required by law. And he laments that due to the poor state of their accounts, financial audits have not been completed in a timely manner.

Following is the report on the audit of statutory boards and Government-controlled companies and entities.

Arts And Sports Promotion Fund. The Arts And Sports Promotion Fund was established under the Arts And Sports Promotion Fund Act, 2003. The purpose of the fund is to provide financial assistance to activities and programmes conducted by arts and sporting organizations for the development and practice of arts and sports.

The fund was set up in 2004, but financial statements were prepared by the Treasury Department with effect from 2007.

The Financial Statements for the years ended March 31, 2007, to 2011 were audited. The statements for financial years March 31, 2012, to 2014 are outstanding.

Barbados Boxing Board of Control. The Barbados Boxing Board of Control oversees the promotion and regulation of boxing in Barbados. The board receives an annual grant from the Barbados Government and is required to have its accounts audited by the Barbados Audit Office.

The Boxing Board has however not submitted any accounts to be audited for the past 20 years. The ministry responsible for sports needs to take action to rectify this situation.

I again reiterate that the Ministry Responsible for Sports needs to take the necessary action to have the board provide the necessary statements to be audited.

Barbados Community College. The audit of the accounts of the Barbados Community College (BCC) is conducted in accordance with Section 10 (1) of the Barbados Community College Act, Cap. 36. There has not been an audit of the accounts of the Barbados Community College for five years; the last completed audit being for the financial year ended March 31, 2009.

The financial statements for the financial year ended March 31, 2010, were submitted and private sector auditors were contracted by my office to audit these statements. It is my intention to engage such services since the office does not have the resources to audit such a large backlog of statements and at the same time carry out its other statutory responsibility.

The college reported that the statements for the financial years ended March 31, 2011, and 2012 were completed and awaiting approval from the board before submission to be audited.

Barbados Defence Force. The audit of the accounts of the Barbados Defence Force for the financial year ended March 31, 2013, was conducted during the course of the year. The financial statements were produced on a cash basis rather than the accrual basis adopted by Government.

The financial statements for the year ended March 31, 2014, have been submitted to the Audit Office for auditing.

Barbados Hospitality Institute. The Barbados Hospitality Institute falls under the aegis of the Barbados Community College. This institute conducts training for persons pursuing careers in the hospitality industry. The accounts of the Hospitality Institute has not been audited for six years, and this condition is unacceptable. The relevant action should have been taken by the board of management and the ministry to rectify this situation.

The college reported that the statements for the financial years ended March 31, 2011, and 2012 were completed and awaiting approval from the board before submission to be audited.

Barbados Liaison Service –– Miami. The Barbados Liaison Service in Miami administers a programme relating to workers recruited in Barbados for attachment to hotels in the United States. The accounts for the Liaison Service for the financial years ended March 31, 2013, and 2014 have been completed.

During the last four years no Barbadian workers have been selected to work on this programme. The programme had provided seasonal employment in the hotel industry for Barbadian workers in the Southern United States for several years.

The annual budget for maintaining this office is US$308,855.00 and this is a significant sum being spent without any obvious returns. The Ministry of Labour should conduct an assessment of this programme to see how it can be improved or alternatively whether it should be discontinued.

Barbados Liaison Service –– Toronto. The Barbados Liaison Service in Toronto administers a programme relating to farm and hotel workers recruited from Barbados. The audit of the accounts of the Liaison Service is currently two years in arrears.

This [will be remedied] when the Audit Office visits Canada to conduct the on-the-spot audits of the missions in Canada.

Caribbean Centre for Development Administration. The Caribbean Centre For Development Administration (CARICAD) provides assistance to the countries of the Caribbean region for the purpose of improving their administrative capability. The accounts of CARICAD for the financial years ended March 31, 2012, and 2013 were submitted and are currently being audited. The audit of the accounts for the year ended March 31, 2014, is outstanding.

Central Liaison Service. The Central Liaison Service (Regional Security System) is a regional security organization headquartered in Barbados and supported by a number of Caribbean countries. Its functions include assisting with the fight against illegal narcotics and combating threats to national security in member states.

The accounts of the Central Liaison Service for the financial years ended March 31, 2012, and 2013 have been submitted for audit and will be completed during 2015.

Community Legal Services Commission. The Community Legal Services Commission provides legal aid to persons in the country who need assistance and meet the established criteria. As I indicated in my previous report, the audit of the accounts of the Legal Services Commission has fallen into arrears primarily as a result of the lack of preparation of the financial statements. Financial statements for the financial years ended March 31, 2010, to 2014 have not been submitted for audit.

The board of directors of the Legal Services Commission needs to take the necessary action to ensure that the statements are prepared for audit. The audited financial statements give stakeholders the confidence that the financial affairs of the commission are being conducted in accordance with Government regulations and relevant accounting standards, and should therefore be completed in a timely fashion.

National Assistance Board. The National Assistance Board provides assistance to poor and needy persons in the country in a variety of ways, and this includes providing a Home Help Service. In accordance with Section 6 (2) of the National Assistance Act, Cap. 48, the National Assistance Board is required to submit its annual accounts, within three months of the end of each financial year, to the Auditor General for audit.

The financial statements for the financial years ended March 31, 2011, to 2014 have not been submitted for audit. The board should take the necessary steps to bring the accounts up to date.

National Insurance Fund. The current approach to the audit of the National Insurance Fund has not produced the results as intended. It has been four years since my office contracted this audit to private sector auditors, but the audit for only one year has been completed, and that is for 2003. During 2015, there needs to be some concerted efforts by all parties to resolve this matter.

The National Insurance Fund is too important to the country for the audit of its accounts to be in such a state. Some tough decisions on the way forward for this matter need to be made during 2015.

I have indicated to the department and the private auditors that where the financial information requested by the auditors is not available by a specified time, the requisite audit opinion should be given based on the information provided. Taking such a course of action, along with the provision of adequate audit resources by the auditors, is the only way that progress will be made on this audit.

Samuel Jackman Prescod Polytechnic. The Samuel Jackman Prescod Polytechnic is an educational institution which offers technical and vocational training in a number of disciplines. Section 6 (1) of the Samuel Jackman Prescod Polytechnic Board Of Management Order, 1983 (S.I. 1983 No. 78) requires the board to submit to the minister on or before October 1, in respect of the preceding financial year, statements of accounts audited by the Auditor General.

As reported on numerous occasions the financial statements of the Polytechnic have been in arrears for several years, from 1998 to be precise. During 2011, the Polytechnic submitted to the office financial statements for the financial years ended March 31, 2009, 2010, and 2011. However, these statements were not prepared in accordance with the accounting standards and there was no adequate supporting documentation in support of the statements resulting in the audit process being suspended.

It is up to the board of management and Ministry of Education to ensure that the Polytechnic prepares the necessary financial statements for audit. The current situation is unacceptable.

Sanitation Service Authority. The audit of the accounts of the Sanitation Service Authority for the financial years ended March 31, 2011, to 2014 is currently outstanding. In December, 2014, financial statements for the 2010 and 2011 financial years were submitted for audit and these statements will be audited in 2015. Private sector auditors have been contracted to assist this office in reducing the backlog of audits.

Financial statements submitted long after the period in which the activity occurred is of little benefit to management or other stakeholders and represent a breakdown in the process by which the board and its officers are held accountable by Government.

Severance Payment Fund. The audit of the Severance Payment Fund for the financial years ended December 31, 2010, 2011 and 2012 was partially completed. However, the financial statements and additional schedules requested were not submitted to facilitate the completion of the audits. The audit of the financial statements for the financial year ended December 31, 2013, is also outstanding, as no financial statements have been submitted to date.

Sugar Factory Smoke Control Board. The revenue and expenditure accounts of the Sugar Factory Smoke Control Board for the years ended December 31, 2001, to 2014 have not been submitted for audit in accordance with Section 3 (11) of the Registered Sugar Factories Smoke Control Act, Cap. 355. The audit of the accounts of the board for these years is therefore outstanding.

Sugar Industry Research And Development Fund. The receipts and payments accounts for the financial year ended December 31, 2012, were audited as required by Section 15 (2) of the Sugar Industry Act, Cap. 270. No material errors were discovered in the financial statements during the course of the audit. The financial statements for the financial year ended March 31, 2013, have been submitted. The financial statements for March 31, 2014, are outstanding.

Sugar Workers’ Provident Fund. The Sugar Workers’ Provident Fund provides pensions and funeral grants to persons previously employed in the sugar industry, and who were not entitled to a contributory pension under the National Insurance And Social Security Act. The audit of the financial statements of the fund for the financial years ended December 31, 2010, 2011, and 2012 was conducted during the year. Revised financial statements to facilitate completion of these audits were not submitted. In addition, no financial statements were submitted for the financial year ended December 31, 2013.

Transport Authority. The Transport Authority was set up in August 01, 2008, to regulate, monitor and plan for public transportation in Barbados. The Transport Authority indicated that the audits of the accounts for the financial years ended March 31, 2011, 2012, 2013, and 2014 are outstanding.

The reason reported for the delay is the absence of an accountant at the Transport Authority, compounded by serious budget cuts curtailing efforts to seek external accounting assistance. The secretariat reported that steps were being taken to rectify this situation.

Unemployment Fund. The Unemployment Fund, which is administered by the National Insurance Department, pays benefits to those qualifying persons who were laid off from work. The audit of the financial statements for the financial years ended December 31, 2010, 2011, and 2012 was partially completed during the year. However, financial statements and additional schedules requested were not submitted to facilitate the completion.

The audit of the financial statements for the financial year ended December 31, 2013, is outstanding.

Retraining Fund. The Retraining Fund was established in 2010 by the National Insurance And Social Security (Amendment) (No. 2) Act, 2010-9, and is operated under the management and control of the National Insurance Board. The Retraining Fund provides funding for the retraining of persons who have become unemployed. The training is administered by the National Employment Bureau.

The financial statements for the financial years ended December 31, 2012, and 2013, have not been submitted to the office for audit and therefore remain outstanding.

Audits conducted by private sector auditors. Section 113 of the Constitution requires the Auditor General to be the auditor of ministries/departments and Government controlled entities. However, private sector auditors conduct a number of these audits. A report on the status of these audits is as follows:

STATUTORY BOARDS AND GOVERNMENT COMPANIES

Barbados Agricultural Credit Trust Ltd. The principal activity of the Barbados Agricultural Credit Trust Ltd (BACTL) is the management of the debt of the Barbados Sugar Industry Ltd (BSIL) and the Heavily Indebted Plantations (HIPs), a responsibility which was assumed from the Barbados National Bank in the form of a portfolio transfer. The audit of the accounts for the financial year ended June 30, 2013, has been completed. The audit for the financial year ended June 30, 2014, is outstanding.

Barbados Agricultural Development and Marketing Corporation. The Barbados Agricultural Development and Marketing Corporation (BADMC) consists of two merged entities: the Barbados Marketing Corporation (BMC) and Barbados Agricultural Development and Management Corporation (BADMC). The principal activity of the BADMC under Section 10 of the act is the management of the production, marketing and processing of produce in Barbados.

The BADMC was established by the BADMC Act, 1965 – 21 to stimulate, facilitate and undertake the development of agriculture and to develop and manage, on a commercial basis, Government plantations along the line of Government policies.

The corporation informed that audits of the accounts of the BADMC for the financial years ended March 31, 2011, has been completed. The corporation also reported that it was in the process of completing the 2012 audit and was projecting that the BADMC audits should be up to date by the end of 2015.

Barbados Conference Services Ltd. The Barbados Conference Services Ltd (BCSL) is responsible for the operations of the Lloyd Erskine Sandiford Centre and provides destination management and transport services under the brand names Horizon Events’ Planners and Horizon Coaches And Tours, respectively. The audit of the accounts for the financial year ended March 31, 2014, has been completed.

Barbados Investment & Development Corporation. The Barbados Investment & Development Corporation (BIDC) was established under the Barbados Investment And Development Corporation Act, 1992 – 30 for the purpose of developing Barbados’ industrial, offshore financial, export and other related activities. The audit of accounts for the financial year ended March 31, 2013, has been completed.

The corporation has indicated that the accounts for the financial year ended March 31, 2014 are in draft and should be finalized by January 31, 2015.

Barbados National Oil Company Ltd. The Barbados National Oil Company Ltd  (BNOCL), through its wholly owned subsidiary, is involved in the exploration and production of crude oil, natural gas and liquefied petroleum gas (LPG). The BNOC is also engaged in the processing of crude oil and the sale of petroleum products to the Barbados market.

BNOCL has indicated that the audit of the financial statements for the period ended March 31, 2014, is near completion.

Barbados Port Inc. The principal activity of the Barbados Port Incorporated is to manage the Port of Bridgetown for the main purpose of enabling the Port to operate as a commercial entity. It was reported that the audit of the accounts for the year ended March 31, 2014, has been completed.

Barbados Tourism Authority. The principal activities of the Barbados Tourism Authority (BTA) were to promote, assist and facilitate the efficient development of tourism, and to design and implement suitable marketing strategies for the effective promotion of the tourism industry. This entity has been replaced by the Barbados Tourism Marketing Inc. and the Barbados Tourism Product Authority.

The audit of the accounts of the BTA for the financial years ended March 31, 2012, and 2013, was reported to be in progress, and the audit of the accounts for the year ended March 2014 remains outstanding.

Barbados Vocational Training Board. The National Training Board was set up under the Occupational Training Act, 1979, Cap. 42 to ensure an adequate supply of trained manpower through occupational training for apprentices and trainees. The name of the board was subsequently changed to the Barbados Vocational Training Board (The Board) under Section (2) of the Technical And Vocational Educational Training Act, 1994 –11. The mission of the board, however, has remained unchanged.

The Training Board reported that the final auditor’s report is being awaited with respect to the accounts for the financial year ended March 31, 2006. The audit of the accounts for the financial years ended March 31, 2007, to 2014 remains outstanding. The corporation has indicated that the accounts for the financial year ended March 31, 2014 are in draft and should be finalized by January 31, 2015.

Barbados Water Authority. The Barbados Water Authority (BWA) was established by the Barbados Water Authority Act 1980 – 42 to take over the functions, rights and liabilities of the Waterworks Department on the “appointed day”, which is regarded as April 1, 1981.

The BWA reported that the audit of the accounts for the financial years ended March 31, 2009, 2010, 2011, and 2012 was ongoing. The audits for the financial years ended March 31, 2013, and 2014 also remain outstanding.

Caribbean Broadcasting Corporation. The principal activity of the Caribbean Broadcasting Corporation (CBC) is the provision of broadcasting services through radio and television. The audit of the accounts for the financial year ended December 31, 2013, has been completed. The audit of accounts for January to March, 2014, is in progress.

 
Continued here:  From the Auditor General’s Report 3
 
Also see: From the Auditor General’s Report 1; From the Auditor General’s Report 2; From the Auditor General’s Report 4