‘Bounced’ cheques baffle Auditor General

The Auditor General is still waiting for information on the identity of businesses and individuals who tendered more than $32.78 million in dishonoured cheques to Government.

The figure reported by the Accountant General’s Office is not only staggering, but Auditor General Leigh Trotman says those responsible for the bad cheques remain a mystery.

Reporting in his 2021 report for the 12-month period ending March 31, Trotman said “A balance of $32,786,650.07 was reported in respect of dishonoured cheques received. However, the relevant listing of the individuals or entities to whom these amounts referred was not provided for audit inspection; hence, the auditors could not verify this total,” he outlined.

The Auditor General has cast doubt on several figures presented by the Government Treasury which were prepared by the Accountant General’s Office.

In fact, the report said the Treasury reported that Government’s receivables increased by $1.23 billion during the financial year which represent amounts owed to the state.

This, he said, would tend to indicate that taxpayers were filing returns but not making payments to meet various tax obligations. The major increases were for corporation tax, income tax, value added tax and land taxes.

However, the Auditor General stressed that the receivables figures “differed significantly” from those of the Barbados Revenue Authority (BRA) which has responsibility for collecting most taxes and keeping the detailed records of receivables.

Trotman said there was a $194.29 million difference between the receivables presented by the Treasury and BRA’s figures for outstanding corporation tax. In the case of income taxes, the variance was $363.10 million, while for land taxes, it was $251.64 million.

While the BRA said $1.06 billion in receivables was owed to government for VAT, the Treasury put the figure at $695.39 million.

The differences between the Accountant General and BRA are so stark, that the Auditor General’s office said it could not verify the real receivables figure.

Furthermore, Trotman deemed the figures “unreliable and inaccurate”.

He added: “The large variances in these balances and the absence of supporting information for their confirmation has resulted in the Audit Office not being able to verify these amounts. Furthermore, users of the financial statements will not be able to place reliance on this information to make informed decisions.”

In response to the statements from the Auditor General, the Accountant General promised an investigation. That office stated: “The differences in tax receivables balances reported by the Barbados Revenue Authority and the Treasury as at March 31, 2021, will be investigated and the relevant adjustments will be made during the 2021- 2022 financial year.”

Trotman also chastised the Accountant General for chronic  late submission of financial statements.

“The Public Finance Management Act, 2019-1 requires the Accountant General to prepare, sign and submit to the Auditor General, within four months after the close of each financial year, a set of financial statements to be audited.

Trotman complained that statements for the financial year ended March 31, 2021, should have been submitted by July 31, 2021. However, the financials came five months after the required submission date.

“In recent years, these statements have not been submitted in a timely manner. . . . This late submission is regrettable since for financial information to be relevant to decision makers and other stakeholders it has to be timely.

“There is an acute need for up-to-date financial information to be available to Government and other stakeholders including the wider public, given the challenging financial situation the country currently faces. Therefore, the Treasury has to make a greater effort to ensure that its reporting deadlines are met if the reports are to be relevant and impactful on decision-making,” he stated. (IMC1)