Government’s true financial position remains unclear, Auditor General Leigh Trotman has said while raising concerns about the credibility of financial statements produced by the Treasury in recent years.
“Unfortunately there has been a number of issues which have prevented the Auditor General from verifying some of the information provided and there has been some departure from accounting standards resulting in my conclusion that the financial statements over the last few years do not fairly represent the financial position of the Government,” he told a public lecture on The relevance of Auditor-General’s Office to the Barbadian Society this week.
Trotman lamented that a significant number of Government departments and statutory bodies were still lagging on producing timely audited financial statements and, according to his colleague, professional auditor Linda Carter, the Government’s real debt burden was still not known as a result.
“The financial statement for the Crown is not fully consolidated to the best of my knowledge, therefore all the debt of the Crown would not be there at this time because debt owed by statutory entities would not be captured there. Those statutory bodies all submit to the Auditor General except for the ones that are delinquent individual financial statements so all the financials are not consolidated.”
The Auditor General pointed out that audited financial statements should be completed by three months after the end of financial but key agencies were experiencing difficulties, including insufficient or inadequate staff, lack of funding to pay auditors, data corruption and delays in the appointment of auditors.
“I spoke to a director or CEO of one of these agencies only this week and he told me that his audits were ten years in arrears.”
Trotman stressed it was the responsibility of the relevant board to correct the problem, noting that while his department continues to provide some support, it was constrained because of the lack of staff.
In this regard, he made a strong case for the Government to strengthen the independence of the Audit Department by giving it the power to recruit its own staff and manage its own budget.
“The current process of recruitment is too slow and does not meet the standard envisaged for the office,” he said, highlighting a 1998 report by the Constitutional Review Commission, which proposed greater autonomy for the Office of the Auditor General.
“I too have been making this request in my reports over the years and I want Parliament to give serious consideration to the matter. There are two issues here – being too dependent on the entity that you audit for resources and the slowness of the process.”
Trotman stressed that a proper functioning audit department was critical to transparency and good governance, but noted that its role must go beyond fiscal accountability.
“Just submitting financial statements by themselves does not tell you a whole lot about what that agency has achieved. So I would like to see where the annual reports are more performance based not just financial performance but also activity performance based. So when we are auditing we can actually have a look at what you were supposed to do, what you did and I think that would be more meaningful information, even more so than the audit.” (SD)