Tue | Nov 30, 2021

EDITORIAL - Apply private-sector reporting standards to govt firms

Published:Friday | June 13, 2014 | 12:00 AM

The focus has been on the part of Sandrea Falconer's statement about the Cabinet's instruction to government companies and public bodies that they spend less on the production of their annual accounts.

So, we expect the gloss to be out, as well as the expensively choreographed photographs of board members and CEO. Which is good, especially in these times of economic austerity, when the central government has slashed spending and asked public-sector employees to take a freeze on their wages.

For, as Ms Falconer, the de facto information minister, said, what is required is not "the gloss and full photo shoot", but the information contained in the documents.

"The Cabinet emphasised the need for transparency and good governance as well as the efficient use of resources in the production of annual reports," she said. On this, the Government has our full support, except that we would add timeliness as another important criterion of the process.

Indeed, as our correspondent, AC Count, has been pointing out over several weeks, delays in the publication of the annual accounts of state-owned companies and agencies are a major obstacle to the analysis of their performance. And, we might add, to judging the quality of their management and overall governance. Indeed, late, incomplete and absent financial reports are an easy way to hide poor performance and, perhaps, fiduciary irresponsibility - to the cost of taxpayers.

We, of course, make no specific accusation about any particular agency, for as AC Count has been noting in his articles, the problem of late annual reports by public agencies is widespread. Neither are they tabled in Parliament or available to the public, even when - like the Urban Development Corporation (UDC) - the agencies or departments control many billions of dollars worth of taxpayers' assets and, as the UDC does, declare their commitment to "conduct our business in a transparent manner, while assuming responsibility for our actions and communicating openly and regularly with our clients and stakeholders".

PUBLISH ON WEBSITES

We agree with AC Count that, in delivering on their commitment to transparency, and in acknowledgement of the advance in technology, such agencies, particularly those that "deal with finance or development", should publish their updated accounts on their websites. Among the agencies identified by AC Count are: EXIM Bank; Jamaica Mortgage Bank; Development Bank of Jamaica; the UDC, JAMPRO; the Tourism Enhancement Fund; and, we would add, the Jamaica Tourist Board and the National Water Commission.

We would also suggest that, as part of the public accountability process, such agencies are made, by law, to adopt the requirements of publicly listed companies, which have to make public quarterly financial statements and their annual accounts, within a specific period after the end of the quarter. If they are likely to miss those deadlines, they are obliged to advise the stock exchange on pain of penalties.

As is well known, the bulk of Jamaica's nearly J$1.8 trillion debt was not created by the central government, but rather its embrace of contingent liabilities accumulated by parastatals. Consistent, periodic publication of the financial accounts of these agencies would help to induce restraint, allow for the engagement of the public in oversight, and bring pressure for restraint before the proverbial horse bolts. And it would be in keeping with new accountability laws to which the central government now has to adhere.

The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.