The Editor Speaks: Auditor General says need to make changes to current financial reporting framework
- the artificial split of entity and executive transactions with M&P financial statements only reporting entity transactions;
- the unclear relationship between M&Ps surplus/deficit and their performance against the appropriation authorised by the Legislative Assembly, the inconsistent treatment across M&Ps, and the ability to basically undermine the authorized appropriations through reporting a deficit;
- reporting against the appropriations is presently not well developed and therefore it is challenging for legislators to effectively determine whether Government and its entities are complying with the legal authority provided for incurring expenditure;
- appropriations authorised under the Appropriation Law are measured on what is billed to cabinet, rather than the actual costs of delivering the services; and
- the comparability of the actual and budget figures reported in the financial statements as the budgets are at least operationally being treated on a partial cash basis rather than an accruals basis as required under the PMFL. For example, M&Ps are being provided cash for non-cash budgets and transactions such as depreciation.
Published October 26, 2014
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