This is in the face of the failure of the Ministry of Health and Wellness to submit financial statements for nine years, accounting for $560 billion in expenditure.

The varying periods of backlog of financial statements — attributed to Government’s financial management system — run across several ministries, agencies and departments, the auditor general pointed out. She said the ministries of national security, labour and social security, and education have historically had an issue.

The issue was the focus of Tuesday’s meeting of the PAC, where chief accounting officer in the Ministry of Health and Wellness, Dunstan Bryan and his team faced questions about the financial statements highlighted in the auditor general’s 2022 annual report which was tabled in Parliament in January.

Monroe Ellis pointed out that the health ministry has been promising to present the appropriation accounts since 2018. “[The years 2018, 2019] passed, no appropriation account. [The year] 2020 passed, no appropriation account. In 2021 the ministry provided an additional reason in the form of the challenges with the finman (financial management) system…well in 2022 we received the same promise. We are talking about $560 billion for which the ministry has not fulfilled its fiduciary responsibility to provide a report on,” she said.

The auditor general’s 2022 annual report, tabled in Parliament in January, said the ministry was in breach of the FAA Act for failure to submit appropriation accounts for 2013/14-2021/22, denying Parliament and the country the opportunity to assess the ministry’s stewardship of the use of over half a trillion dollars, over the period.

Monroe Ellis said she does not believe the delay rests with the ministry’s internal auditor but instead, the challenge is with correcting the financial statements. “Even when the internal auditor reviews it, when it comes to us there are issues that are going to result. If the internal auditor reviews it for three months and we are forming an opinion, you can just imagine what I am going to expect before I can sign off to say that these statements are correct,” she said, stressing that it was not a question of competency on the part of the audit officers.

Bryan, in an explanation for the delay, said the report has some “challenges” in context, and “the lack thereof”.

He explained that the extensive lag in the appropriations accounts was due to issues with its legacy financial management system which caused significant challenges in producing the statements. “The context here is that when the [system] was ready, the ministry was engulfed in the implementation of our response to COVID-19, and it is important that we recognise that the resources of the ministry were otherwise retained,” he explained, noting that the ministry itself had been impacted by COVID-19 cases that affected the operations of the internal audit unit.

He also noted that the unit has been bumped up to eight, from previously having only four officers serving the entire ministry. “We have doubled the number of officers in the unit to provide for this review, so we are able to give that commitment knowing that we have the resources to ensure that we comply,” he said, noting that all the outstanding years have been completed and submitted to the unit.

Acting Chief Internal Auditor Michelle Walker advised that verification has been completed for the 2013/14 and 2014/15 appropriation accounts, and verification has commenced for the 2015/2016 and 2016/17 financial statements.

Bryan told the committee that the process could take up to 27 months “in terms of effort”, but not “time elapsed”.

But Monroe Ellis said she was concerned with the three-month timeline given by the ministry to review one year of statements. “It seems extraordinarily long. The internal auditor is not required to give assurance; the internal auditor is just giving preliminary checks. The audit is undertaken by the AG’s Department. It is the auditor general who forms an opinion on the appropriation accounts,” she stated.

She pointed out the deep dive that her department undertakes is not required of the internal auditors.

“So I think we have to look back at that process because what I am detecting is a great level of inefficiency taking place. The internal auditor is likely carrying out an exercise that will have to be repeated by us, and it has to be because of the standard with which we comply. I do not expect that my team will be taking three months to complete the audit of an appropriation account for any one particular year,” she asserted.

Bryan argued that in addition to low compensation, which makes it difficult to attract auditors, there are issues affecting the governance of the internal audit process as the unit carries out various transactions, which poses conflict. “Pre-audits are another area of great concern for me where the internal audit unit is required to do pre-audits for gratuity payments, leave calculation [etc]. And what it does is that the internal auditor then becomes part of management in terms of the management of transactions, therefore it becomes conflicted because they have to now turn around and audit, but they have already participated in the process,” he explained.

He said despite the auditor general’s point about the internal audit process, the internal audit officers end up doing actual audits based on their interpretation of the instructions from the finance ministry to do an audit of the appropriations account before they are submitted to the auditor general.