A meeting between the Government and the Auditor-General should take place to work out how to tackle about 130 years of financial statements in arrears, a former senator said yesterday.

James Jardine highlighted the importance of up-to-date audited accounts.

A statement from the Auditor-General’s office said this week: “As at September 2022, roughly 32 publicly funded entities have approximately 131 years of financial statements in arrears.”

Mr Jardine, who was a Governor-appointed senator from 2012 to 2020, said yesterday: “This issue has been around for a long time.

“It’s nothing new and I suspect that it’s probably a combination of many things.”

He said: “It’s a shame this has been going on for so long and it really, I think, just needs to be a meeting between the Auditor-General’s office and the Government to sort through what all the issues are then find a solution, whatever that might be.”

Heather Thomas, the Auditor-General, later backed talks to come up with a plan as well as making resources available for her office and other people involved in preparing public accounts.

Mr Jardine, a retired accountant, highlighted yesterday that in their reports, auditors-general covered the need for consolidated – or combined – financial statements from the Government.

He said these would include fiscal results for all government quangos and authorities.

Mr Jardine, who talked repeatedly about the topic during his time in the Senate, added: “Significant amounts of government money are given to these quangos to spend for a whole host of purposes and the only way that one can see the true picture of what’s going on is to prepare combined financial statements.

“I know that this is something that the current Auditor-General has wanted to do for some time and indeed the previous Auditor-General wanted to do.

“The trouble is, unless they have a complete set of financial statements that have been audited for all the various funds and other operations that Government is involved in, they obviously can’t prepare the combined financial statements.”

He said: “Of course, there are more and more quangos being created for a whole variety of purposes and so this money is being dispersed more widely.

“By preparing combined or consolidated financial statements you can then bring everything under one set of combined summary financial statements, which will show the picture right across all of the different operations.”

Mr Jardine pointed out: “I first raised all of this way back in my second year in the Senate back in February 2013 at the Budget debate, when I talked about the years of unaudited financial statements.”

He recalled citing the 2009 and 2010 annual report from the Auditor-General.

The document said: “In total, there are 38 (out of 40) funds, controlled organisations, parish councils and aided schools that are at least one year behind in their financial statements.

“The 38 entities collectively have 110 financial years of financial statements to produce.

“The failure to prepare financial statements and submit them for audit (within at least 12 months of the year end) is totally unacceptable and represents a fundamental failure in both the governance and management areas of responsibility.”

An annual report from fiscal year 2007 – the earliest on the Auditor-General’s website, where reports up to 2018-19 were published – highlighted: “Annual financial reporting by many government entities is still considerably in arrears.

“This is a longstanding problem and represents a significant loss of control by the House of Assembly over the Government’s affairs.”

Mr Jardine said: “I think a sit-down meeting between the Auditor-General and the Government to work out how they are going to address all this backlog would be the first step; and then to work out a process that’s realistic and reasonable – and it may require some changes to the legislation – in order to bring the accounts up to snuff and continue to ensure that they are done on a timely basis.”

He added later: “I don’t think it’s an impossible task, there just has to be a will from all parties to make it happen.”

Ms Thomas pointed out that the Auditor-General was the Government’s “legislative auditor”, whose independent audit opinions are laid before the House of Assembly.

She said that she was "a pragmatic person and has asked multiple times for a plan“ and that the Ministry of Finance ”has not been successful integrating competing and conflicting priorities“.

Ms Thomas described the problem of accounts in arrears as a legacy issue that went back to the early 1990s.

She added that it would be a “mammoth challenge” if the Government suddenly presented 131 years of accounts to her office for audit.

Ms Thomas said that she “would not have the resources or financing to complete 131 financial statement audits”.

She added: “The Ministry of Finance provides financially for roughly 52 annual audits each year.”

Ms Thomas said that she welcomed and encouraged “a dialogue to agree to a collaborative action plan and for resources to be made available to the both the preparers of the accounts and her office”.

She added: “Another area of collaboration would be the adoption of the revised audit legislation.

“A fit-for-purpose Auditor-General Act was drafted in 2018 and is awaiting review and advancement by the Ministry of Finance.”

Ms Thomas said her “strong”, bipartisan standing committee was responsible for making sure that her office had “the necessary resources to carry out its mandate”.

She pointed out that the Office of the Auditor-General had “positive professional relationships with the Accountant-General, who has the accounting responsibility for most of the funds, Ministry of Finance and the other government ministries and quangos”.

Ms Thomas highlighted that “it is not all bad news – there are some stellar government departments and quangos that consistently present their accounts on time and in accordance with best practices”.

MPs passed a Bill on Friday that was approved by senators yesterday, which will allow the Bermuda College to appoint its own auditor.

Lieutenant-Colonel David Burch, the Minister of Public Works, said in the House of Assembly last week: “I am going to put the House on notice and the people of Bermuda on notice that I mentioned to the Minister of Education that he would be the first to go down this road and we are likely to follow.”

The Government was contacted for comment yesterday but none was received by press time.

• To read yesterday’s comments from the Auditor-General in their entirety, click on the PDF under “Related Media”.

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Auditor-General statement