The Tribune

By RASHAD ROLLE

Tribune Senior Reporter

rrolle@tribunemedia.net

MICHAEL Halkitis says it’s unlikely the government will meet a target and transition to an accrual accounting system by the end of the 2022/2023 fiscal year, citing COVID-19 disruptions.

Some local and international experts have long urged the government to transition from the cash-based accounting method to an accrual-based accounting approach because they believe this is the only way to accurately report the assets and liabilities of the government.

In 2020, then Minister of Finance Peter Turnquest said the government devoted significant resources to facilitating this transition, a shift that would spur compliance with the International Public Sector Accounting Standards (IPSAS).

Mr Halkitis, the Minister of Economic Affairs, said yesterday: “The movement to accrual accounting, that is a process I can tell you has been going on for a number of years and it’s a lot of foundational work that has to be done and the accountants would be able to really dig into it. The idea being that you get a better – now this is one opinion – that you get a better view of the government’s true financial position if you can accrue liabilities and accrued income that is reachable by the government, you put it on footing of a private company.

“When I was here last, we started this whole process and it involved a lot of background work to get the government ready. I think what they are using now is something called adjusted or blended approach. There are differences of opinion on how to go with it but suffice it to say what we’re interested in is presenting the truest picture of the government’s finances and so we’ll continue the process but it’s a multi-year process mainly because there is a lot of foundational work that has to be done in the way government data is handled within the agencies.”

Asked about the timeline for the transition, he said: “Twenty twenty-two, 2023? That’s next year. Like I said, it’s an ongoing process. We’ve had interruptions, we’ve had severe interruptions in our public service, you know, in the Treasury, people who work on these with COVID. So I don’t see us doing 2022/2023 just because you basically lost two years. But the principle in terms of being in a position to show the true nature of the government’s assets and liabilities and obligations, we’re committed to that.”