Government Accounts Audited: 49 Years of Financial Records Brought Up to Date

The government has completed a major overhaul by auditing nine state-owned enterprise (SOE) accounts dating back to 1997. This exercise, spanning over a decade, aimed to bring all financial records up to date and identify areas for improvement.

Auditing Challenges

The audit revealed key risks, primarily related to:

• Weak accounting and auditing capacity
• Inadequate timely and consolidated financial reporting

To address these challenges, the Ministry of Finance (MOF) will need to:

• Improve internal systems
• Train accountants in line ministries

Public Procurement Reform

The government has implemented new public procurement rules, effective from July 2010. The updated financial instructions require all expenditure above SI$50,000 to be tendered through either ministerial or central tender boards. Competitive tendering procedures are outlined in the Ministry of Infrastructure Development’s Procurement Manual.

Anticorruption Efforts

Surveys suggest that corruption perceptions have risen since 2005. Despite corruption being recognized as a legal offense, a culture of impunity hinders effective sanctions. The Leadership Code Commission lacks resources to investigate cases and rarely refers them to police.

To address this issue, the government must:

• Strengthen anticorruption efforts
• Improve transparency

Transport Sector Risks

The transport sector mirrors national governance risks, including:

• Corruption
• Weak financial management
• Inadequate funding

Insufficient human resources, weaknesses in planning and organizational structure, and inadequate staff training contribute to poor service quality.

Risk Mitigation Strategies

To mitigate these risks, the government plans to:

• Strengthen public financial management systems
• Review revenue management policy and conduct public expenditure reviews
• Update payroll systems and strengthen internal audit
• Foster adoption of improved procurement laws and legislation
• Encourage multiyear budgets and fiscal frameworks linked to medium-term development plans

In the transport sector, risks will be mitigated by:

• Strengthening the Ministry of Infrastructure Development’s financial management capacity
• Improving procurement processes and procedures
• Building anticorruption capacity
• Developing institutional capacity in planning, operation and maintenance, project management, asset management, and monitoring and evaluation

Conclusion

The government’s efforts to audit its SOE accounts and implement public procurement reforms demonstrate its commitment to improving governance and transparency. However, addressing corruption and strengthening financial management will require sustained effort and cooperation from all stakeholders.