The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The Government is aiming to complete the shift to accrual-based accounting, and full compliance with global public sector financial reporting standards, by mid-2023, it was revealed yesterday.

K Peter Turnquest, deputy prime minister, told a Bahamas Institute of Chartered Accountants (BICA) webinar that a "road map" has already been developed to guide government ministries, agencies and departments away from the "modified cash basis of accounting" that it currently employs.

"The current crisis also underscores the need for a resilient and responsive public sector that is able to effectively partner with the private sector to further advance the financial stability of The Bahamas," he said.

"The Government has already begun work on transitioning from the modified cash basis of accounting it currently employs to an accruals-based accounting system in compliance with the International Public Sector Accounting Standards (IPSAS), and have dedicated significant resources to making this transition a reality."

Accrual-based accounting will provide a more accurate and complete picture of the Government's true financial position by capturing future spending commitments it has already entered into - something the current cash-based system does not.

"The public will hear more of the details on this process in the upcoming weeks," Mr Turnquest added. "However, I am pleased to announce today that a road map has been developed for the transition to full IPSAS reporting by the end of the 2022-2023 fiscal year.

"At various stages throughout the IPSAS transition, the Government will need to partner closely with BICA members, tapping into your advanced knowledge of accrual-based financial reporting as it is currently being applied to the private sector in The Bahamas.

"This uniformity as it relates to financial reporting will only further strengthen The Bahamas’ ongoing commitment to transparency and accountability in both the public and private sectors. and will require the combined efforts of our entire accounting profession in order to be successful," he continued.

"Thus far, progress had been made [within government] to move from cheques to electronic payments, the reductions in the number of bank accounts and in automating the capture of receipt information. Work must be done on the modernising of internal controls and the production of manuals and instructions."

Mr Turnquest added that work to digitise government services, and facilitate the electronic payment of fees, was moving at "a rapid pace". He said: "The public will soon see the launch of electronic payment solutions at the Department of Road Traffic, Registrar General's Office, fisheries, and for port and marina fees just to name a few.

"These efforts will allow us to reduce revenue leakage and jealously guard every single dollar collected. As we adapt to the 'new norm' in a post-COVID environment, these new revenue collection measures that reduce person-to-person contact will become increasingly more important."

Mr Turnquest said the Government's revenues were "down across-the-board" by 45 percent during the first quarter of its 2020-2021 fiscal year, including "in key areas" such as VAT, import duties, departure taxes and Business License fees.

He added that the Government’s tax credit and tax deferral programme had provided more than $40m in tax incentives, thereby enabling the companies who benefited to keep more than 14,000 workers employed and off the unemployment lines.