SJMC – Unsupported $4.79B Revenue and $4.99B Expenditure; Five Outstanding Financial Statements

Auditor General's Findings

The 2023/2024 Auditor General’s Annual Report (subsections 3.2.264–3.2.270) covered the audit of the St. James Municipal Corporation’s (SJMC) financial statements for the 2014/2015, 2015/2016, 2016/2017, and 2017/2018 financial years. The Auditor General was unable to express an opinion on the financial statements due to the pervasive absence of sufficient and appropriate audit evidence to support the transactions, account balances, and disclosures (financial exposure: cash and cash equivalents $271.7 million; revenue $4.79 billion; expenditure $4.99 billion). Management reported that the Corporation was unable to provide the relevant accounting records due to a system failure, which resulted in the loss of accounting information for the periods under review. Some supporting documents also could not be located due to the passage of time

The report also found that the SJMC had not yet implemented an accrual accounting system based on International Public Sector Accounting Standards (IPSAS), as required by the Local Government (Financing and Financial Management) Act, effective March 1, 2016. The Corporation was still operating under the modified accrual framework for the 2016/2017 and 2017/2018 financial years, meaning some account balances may be materially misstated and the financial statements are not in compliance with the applicable financial reporting framework. The Ministry of Local Government and Community Development has since written to the Financial Secretary for further guidance on the way forward.

The audit further found a weak IT control environment: the Corporation had no documented policies to address significant IT-related risks affecting its financial reporting process, including disaster recovery and business continuity, IT security, access controls, and change management.

Additionally, Table 25 (3.2.277) showed five outstanding financial statements for 2019/2020 to 2023/2024, with no response provided by the Corporation.