Special Report 99 - Public Sector Financial Reporting for 2015

Published on 07 November 2017

Public sector bodies manage substantial public funds. For the 2015 year of account, the Comptroller and Auditor General was responsible for the audit of the annual financial statements of 292 public bodies and funds with an aggregate turnover of €213 billion. The audit of those financial statements and their timely presentation to the Oireachtas are necessary to ensure public accountability and effective oversight.

This report reviews the timeliness of public sector financial reporting and focuses mainly on financial statements for periods ending in 2015. It reviews those bodies where delays in reporting have occurred and the causes of those delays. The report also summarises the types of issue that were brought to attention in the Comptroller and Audit General’s audit reports on financial statements for 2015.

Production of financial statements and audit completion

In general, public sector bodies are required to present their financial statements for audit within two to three months of the end of their accounting period. All but one of the 2015 appropriation accounts were produced within the required three months. For other bodies, only 40% produced draft financial statements for audit within three months of the end of their accounting period. However, this was, on average, a small improvement on the previous year.

The audits of two thirds of 2015 financial statements had been completed by the end of September 2016. These accounted for 96% of the value of turnover audited.

Presentation of accounts to the Oireachtas

There has been a significant improvement in the timeliness of presentation of audited financial statements to the Oireachtas. They are generally required to be presented to the Oireachtas within three months of audit certification. Just over 70% of 2015 financial statements were presented on time compared to less than 60% for 2014.

Accounts in arrears

At the end of 2016, there were 16 sets of financial statements for 2015 or earlier periods that had not been certified.

Six of these were accounts of education and training boards. That sector underwent significant organisational change from 2013 and this continues to be a contributory factor to the delays. Audited financial statements for 2015 had not been produced by four education and training boards by the end of August 2017.

The university sector, which previously had a high incidence of accounts in arrears, has shown improvement. At the end of 2016, three accounts for the 2014/2015 year of account had not been certified. These have since been certified.

Matters referred to audit reports

Most 2015 financial statements received a clear audit opinion — just three of those certified to date were qualified.

In the audit reports issued to date for 2015 financial statements, 44 matters were highlighted by way of ‘emphasis of matter’ paragraphs. These are brought to attention to help users’ understanding of the information in the financial statements. In most cases, the issues raised repeat from year to year because they are outside the control of the body concerned or are unlikely to be resolved in the short term. Matters reported include instances where public bodies that produce accrual accounts do not account for pension liabilities in the standard way. This occurs for a significant number of such bodies.

Other matters are referred to in audit reports on an exception basis where it is considered appropriate to bring the matter to the attention of the Oireachtas. Such matters generally relate to the use of public funds or governance and control issues. There were 56 such matters identified in the audit reports issued to date for 2015. Cases where public bodies procured goods and services without a competitive process continued to occur.