Government gives Auditor General more time to complete 2023 report

FINANCE Minister Colm Imbert says it has become necessary to extend the time needed for the Office of the Auditor-General to submit its report on the country's public accounts for the last financial year.

He added the reason for this is because his ministry's officials had detected a variance and understatement of approximately $2.6 billion in the 2023 public financial statements.

He made those comments in a statement in the House of Representatives on Friday.

Before Imbert made that statement, Speaker Bridgid Annisette-George overruled complaints by opposition MPs that the Auditor-General's report for the 2023 financial year had been sent to Parliament but Imbert had not laid it as yet.

He told MPs it had become necessary to extend the period for the Treasury to submit financial statements to the Auditor General under section 24(1) of the Exchequer and Audit Act and likewise extend the period for the Auditor General to prepare and submit reports on those statements.

Imbert reminded MPs that before 1998, the government's financial year was in line with the calendar year.

In 1998, he continued, this was changed with the passage of the Financial Year Act 1998. The change saw the start of the financial year beginning on September 30 instead of January 1.

Imbert said the reason for this policy change was to ensure government's proper planning and implementation of programmes and projects were not hindered by a January 1 start to the financial year.

He added that after the start of the financial year on January 1, there could be a three-month period during which the necessary personnel and equipment could be mobilised to begin government programmes and policies.

"The government's financial year now is based on the need to implement construction projects, as far as practicable, during the dry season."

Imbert said the Auditor General does not have an easy job preparing public accounts.

"The task of preparing the public accounts of TT is a mammoth exercise involving hundreds of public servants. There is the possibility, therefore, that errors may be made along the way and further time may be needed to correct these errors."

Imbert said Section 116 (3) of the Constitution makes allowance for the Auditor General to receive additional time to prepare the country's public financial statements and records.

"For financial year 2023, an extension of time has been determined by the various public officials involved, to be required at this time and this will be addressed at a later time in the proceedings."

Imbert did this when he opened debate on a motion to seek an extension under sections 24(1) and 25(1) of the Exchequer and Audit Act, for the Auditor General to complete the public financial statements for the 2023 financial year.

He said the extension being sought was a period of four- eight months after September 2023, under Section 24 (1) of the act.

Imbert added that with respect to the 2023 financial accounts, the period under Section 25 (1) of the act would be extended from seven to 11 months after September 30, 2023.

"I want to make it clear at the outset that the required report from the Treasury was submitted to the Auditor General on January 31, 2024, in accordance with Section 24 (1) of the Exchequer and Audit Act, Therefore, this extension does not arise as a breach of the Exchequer and Audit Act."

Imbert said the root cause for the motion was "the detection by senior public servants that the statement of revenue which had already been submitted by the Treasury to the Auditor General by January 31, 2024 as required, contained a significant variance and understatement of revenue."

This variance, he continued, was later quantified by officials at his ministry to be $2,599,278, 188.73

Imbert said, "The fiscal outcome for 2023 was better than I reported in this place in the budget exercise of 2023.

"This led to the resubmission by the Treasury of the accounts to the Auditor General on April 16, 2024."

Imbert said his ministry's budget division discovered that the revenue for 2023 which had been reported by the Treasury to the Auditor General was "actually lower than it should have been.

"There was higher revenue in 2023 than previously reported."

Imbert attributed that in part to the implementation of a new electronic cheque-clearing system by the Central Bank which commercial banks experienced difficulty with, as the magnetic ink character recognition that is used to read cheque numbers.

On March 15, he continued, the Inland Revenue Division received additional information from the Central Bank about data-processing errors related to this system.

Of the understated $2.6 billion, Imbert said, "It is noteworthy to highlight that the bulk of the understatement, approximately $2.2 billion, occurred with respect to one erroneous transaction posted by the Central Bank on February 9, 2023."

Meetings were held last month between the ministry and the Auditor General's office to address this matter.

Imbert lamented the Auditor General initially declined to accept the updated financial accounts, "even though it was made clear that the submission made on January 31, 2024, contained a significant understatement of revenue."

He said the Auditor General subsequently accepted the resubmission of the public accounts on April 16.

Imbert added the ministry subsequently learnt the accounts were submitted to Parliament without being audited.

He said, because of that, it was necessary to invoke sections 24 (1) and 25 (1) of the act "to ensure that the correct accounts for financial year 2023 are placed before the Parliament and the public at large."