Government’s Financial Reporting Framework Found to be in Error
Investigation Reveals Errors in Financial Regulations
A thorough investigation has uncovered several errors in the St Helena Government’s financial reporting framework, which was designed to ensure transparency and accountability in its financial dealings. The framework, published in April 2019, contains flaws in its provisions related to repayment of deposits, refunds, rebates, and statutory payments.
Errors in Consolidated Fund Classification
The investigation found that the Government’s Consolidated Fund, responsible for all debt charges, was incorrectly classified. The fund was supposed to include:
- Interest
- Repayment or amortization of debt
- Costs and charges incidental to the management of debt
However, it appeared to have omitted certain essential components.
Misinterpretation of Financial Reporting Framework
The financial reporting framework adopted by the Government, based on International Public Sector Accounting Standards (IPSAS), was misinterpreted. The framework requires annual financial statements to be prepared in accordance with IPSAS, but the Government’s regulations failed to provide adequate guidance on how to apply this standard.
Lack of Transparency in Accounting Policies
The investigation also revealed that the Government’s accounting policies were not properly developed and approved by the Financial Secretary, as required by law. This lack of transparency has raised concerns about the accuracy of the Government’s financial statements and the effectiveness of its internal controls.
Findings and Next Steps
The findings of the investigation have been referred to the Chief Auditor for further action. The Government has been instructed to take immediate corrective measures to rectify the errors and ensure that its financial reporting framework is in compliance with relevant laws and regulations.
Response from Financial Secretary
In a statement, the Financial Secretary acknowledged the errors and pledged to take swift action to address them: “We apologize for any inconvenience caused by these errors and assure the public that we are taking necessary steps to correct them.”