January 24, 2020

The Editor Speaks: Clean financial reports is the order of the day

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Colin WilsonwebMinister Marco Archer continues his impressive role as Government’s when he gave his report at last week’s Legislative Assembly Meeting in Cayman Brac.

The Minister said the Progressives (PPM) is eliminating many of the obstacles, calling them ‘roadblocks’ that are in the way to achieving “clean” reports for its consolidated financial statements from the .

Archer pointed to the Valuation Report of Government’s that had been completed in July 2013 saying it had not been done since 2001. These Assets are now on the books at their current value he said.

The valuation of post-retirement healthcare benefits is underway, and the government is improving its financial management systems to ensure accurate and timely financial information that will mean no more disclaimers by the auditor in future audits.

The statements for the financial year ended 30th June 2011 were presented by the Minister, and said the consolidated financial statements for the financial years that ended 30th June 2009, 2010, 2012 and 2013 were with the Auditor General. These would be tabled as soon as the audits were finalised, he added.

Even though by law financial statements have to be presented this had not been done by the previous government.

Archer said the Auditor General had been unable to obtain sufficient appropriate audit evidence to determine the reasonableness of the reported revenues of CI$732M with related receivables of CI$38M at 30th June 2011. No evaluation of the extent of obligations government has to provide regarding post-retirement health benefits to qualified employees, spouses and dependent children had been carried out. This issue is being rectified he said.

Archer announced the following Statements of Accounts as of 30th June 2011:

Entire Public Sector (EPS) CI$1.739 billion in total assets, CI$1.241 billion in total non-current liabilities and CI$498.238 million in net assets.

Statement of Financial Performance EPS earned CI$732.56M in operating revenue and incurred CI$709.114M in operating expenses, resulting in an operating surplus of CI$23.446M.

Statement of Cash Flows – net cash flows received from operating and financing activities totalled CI$65.533M and CI$131.076M.  Net cash used for investing activities totalled CI$94.224M. Cash and cash equivalents for the EPS totalled CI$259.098M.

Statement of Changes in Net Worth shows total net worth of the government at CI$495.236M.

Archer admitted government was not compliance with the borrowing and net debt ratios as the debt servicing ratio was at 10.5% (which should not be more than 10%) and the net debt was at 98.1% of core government revenue (which should not be more than 80%).

He said the situation regarding proper accounting is improving “to ensure that revenue and expenses are properly recorded, supported and reported. In addition, the Treasury Department is currently in the process of procuring software that will improve the Government’s efficiency of producing and reporting accurate and timely financial information.”

I can only wonder at what mess the accounts were in when Archer took over. The fact that he has achieved what he has in the short space of time he has been in his position is commendable.

I look forward to a real cleansing of all future accounts and all roadblocks removed.

 

 

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