Vexed Bermoothes

The UK National Audit Office has released a report on “Managing Risk in the Overseas Territories”.  While generally complimentary to Bermuda, it does have some interesting comments (no particular order):

General Comments:

• There are problems with late and deficient public accounts
• Public audit systems do not always constitute an adequate challenge function
• Parliamentary scrutiny of public spending appears weak
• Regular “Value for Money” audits (also known as a performance audit) are a useful tool to promote accountability and good governance.  Not currently done in Bermuda.

Timely and accurate financial reporting allows greater transparency of Territory government finances, and promotes Ministerial accountability … The Auditor General of Bermuda reported in 2006 that though in this Territory, central government departments were up to date, other public bodies had not produced accounts since 2002 and 2003. Most serious were delays in the public pension and insurance funds which controlled assets of some $1 billion …

In small communities, auditors are more directly exposed to pressures from auditees and local interests. Some audit offices express concerns with preserving their independence. The Auditor General of Bermuda has described it as a fragile privilege, not ensured by legislation alone …

NAO Conclusion for Bermuda:  As one of the most prosperous Territories in the World, Bermuda faces mainly risks arising from its background of commercial success. Over a period of years it could become less attractive to expatriate workers and foreign companies and less competitive as a financial centre, due to the rising cost of living and doing business there. Restrictions on entry by expatriate workers, who can take a year to receive work permits, can lead to protracted vacancies in key and specialist posts, in both the public and private sectors.

Sustained efforts will be needed to ensure that the jurisdiction maintains its positive international reputation and its competitive edge through which such notable success has been achieved, recognising that other centres are becoming increasingly attractive business locations and increasingly positioned to compete directly with Bermuda.