Auditor General Flags Billions in Government Write-Offs Without Required Approval

The recently published Auditor General’s Report for 2017–2018 has identified billions of dollars recorded as write-offs in the Government’s accounts, without evidence that the required approval was obtained.  Auditor General Maria Rodriguez explained that a write-off generally involves removing an amount from the Government’s books after it is considered no longer recoverable or valid. She also outlined the types of balances included in the report and what their removal meant for the public accounts.  

Maria Rodriguez, Deputy Auditor General: “The write offs were simply to clear off amounts that had not been reconciled. We have a list of government agencies that owed the government at some time. You had a list of advances that public officers owed at some time. So what the records show to us was that these were written off as if though they no longer exist. But what should have been the correct procedure was to reconcile these accounts to find out what is owed, who owes what, and if we are really owed because it’s not necessarily that they owe us it could simply mean that a transaction was not recorded. I can give you an example. Within the report we explained that the DFC account was written off. We did at the attempt of going to the DFC, get a third party confirmation from the DFC to find out if they still owe the government for this advance. The DFC was able to provide us supporting documentation that they do not owe the government. What does this mean? It means then that the Accountant General should have made an entry to her book to reduce the receivable to zero utilizing proper source documents instead of closing off the account.”

Reporter: The total reflected in the 2017-2018 report might not necessarily be accurate because of a lack of reconciliation in some areas ?

Maria Rodriguez, Deputy Auditor General: “Exactly and that’s what we highlight as well because there was also a suspense account in the the report we mentioned is on suspense account. A suspense account was open to place any transaction that you were uncertain of where will I put it in the books. And so until you find out where you’re going to put it in the books, then you take it out of the suspense account and you put it where it belongs. But the suspense account kept growing. They kept putting things in there. So without reconciling it, that account was also closed off. We must clarify that it does not mean that money is missing. It means that accounts were removed from the records and in this case they were removed without reconciling, without bringing them down to a zero balance.”

Rodriguez says the authority to approve write-offs is limited. According to the Auditor General, amounts exceeding ten thousand dollars must be submitted to the House of Representatives for approval. The report, however, states that the Audit Department was not provided with evidence showing that the House had approved the write-offs. Rodriguez also noted that, in responding to the audit query, the Accountant General acknowledged that approval had not been sought.

Maria Rodriguez, Deputy Auditor General: “So we do give the opportunity to the Accountant General to respond to our findings and she did within the 2017/2018 report we provided a space for her, a chapter for her response and in her response she acknowledged the fact that this was not obtained, the approval was not obtained and she also acknowledged that they were not able to reconcile due to lack of source documents and so in their best decision at the time was to remove them from the accounts. But we did tell her that we did recommend that they have to proceed, herself and the Financial Secretary, have to proceed and obtain the legal approval of these write offs.”

Reporter: There was one portion on page 51 of the document that spoke about a backdating, could you explain to me what that was about and how is it that in a 2017/2018 report you would have an element or an activity dated in 2023.

Maria Rodriguez, Deputy Auditor General: “So what has happened due to the delay of submitting annual statements throughout the years the Accountant General has identified and we have identified through our audits required adjustments that need to be carried out. So if we were at the year 2018 and submitting this report to you we would submit as is. However in 2023, and I believe even in 2021, there were some adjustments that the Accountant General felt necessary to do. And so we find out simply because we’re auditing in 2026.”

The report places the affected balances at close to three billion dollars and highlights apparent weaknesses in the oversight and documentation surrounding the exercise.  Given the value of the balances and the absence of documented legislative approval, the Auditor General’s findings point to serious accountability and compliance issues.