by Linda Straker
- Macroeconomic Policy Unit fiscal data includes only central government information
- FROC report notes consequent gains in 2019 included compliance by Central Government with fiscal rules and convergence to debt target
- Some entities failed to comply with mandated annual laying of financial statement in parliament
The Fiscal Responsibility Oversight Committee (FROC) said that notwithstanding the significant improvement in quarterly reporting by the state-owned enterprises (SOE), the fiscal data provided by the Macroeconomic Policy Unit in the Ministry of Finance still includes only central government information, and wants these bodies to comply with the legal mandates to have financial statements tabled in parliament.
“Most targets were met in 2019 but based on Central Government data only. This has therefore given rise to the cautious assessment in the majority of the targets as the Act is very clear that the data used must include not only Central Government but also ‘covered public entities’.” The 2019 FROC report was recently tabled in the Houses of Parliament and was the focus of a news conference organised by the members of the committee.
“The data submitted by the Macroeconomic Policy Unit for the preparation of this Report does not capture that of the covered entities as required by the Act. This omission has given rise to the caution applied in the assessment of a number of Rules and Targets.” The report pointed out that the MPU has made progress in building a full data set for covered public entities and the committee is hopeful that this shortcoming will be rectified in 2020.
The report said that the consequent gains in 2019 included compliance by Central Government with fiscal rules and convergence to the debt target. “While these achievements are commendable, they cannot be applied to the public sector as required by the legislation. In accordance with the FRA, fiscal responsibility and, more so, fiscal reporting frameworks need to extend beyond the Central Government to the remaining elements of the public sector namely National Insurance Scheme, SOEs and SBs.” The report explained that such a requirement is not only essential for greater transparency, but also to better provision or mitigate risks with contingent liabilities.
The statutes establishing statutory bodies or state-owned enterprises mandate the annual laying of financial statement in parliament, but some have failed to comply. One entity last laid its financial statement in 2006, while for another, it was 2009. It must be noted that in recent times more of these bodies are presenting financial statements.
Based on what was presented to the FROC, the debt of state owned enterprises and statutory bodies is tallied at EC$166.8 million but that is not a true reflection because all debt and contingent liabilities of these bodies assumed by the government are still not captured.
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