Turnquest: $1 bil. liability issue is rhetoric, cost not due this fiscal year

The Progressive Liberal Party (PLP) government is being disingenuous in mentioning $1 billion in unreported liabilities if the supplementary budget has not increased by $1 billion, former Minister of Finance Peter Turnquest said on Friday, explaining that the Ministry of Finance’s modified cash basis of accounting does not recognize expenditure not due within a fiscal year, or which has not generated an invoice.

Turnquest, who made the remarks while on Morning Blend Business on Guardian Radio, called Prime Minister and Minister of Finance Philip Brave Davis’ mentioning of the $1 billion during his supplementary budget presentation “rhetoric”, especially if those costs are not due this fiscal year.

“This billion dollars that they’re talking about, it cannot be that you go out and search for a billion dollars for an obligation that does not fall due within this fiscal year and then say the government has not recognized this liability,” Turnquest said.

“We operate on a modified cash basis, meaning that we recognize expenditure when it happens or when the bill is received. And so, if there is something out there that has not generated an invoice, has not generated a real commitment, then it will not show up in the government’s numbers.

“It should be footnoted I would agree with that, but it is not gonna show up in the actual numbers because the government accounting system doesn’t work that way.”

Minister of Economic Affairs Michael Halkitis told reporters on Thursday that audit, consulting, tax, and advisory services firm Deloitte is auditing numbers from the Ministry of Finance to ascertain what liabilities the former administration might have left behind, further explaining that when that report is done, it will be revealed to the public.

“I’m interested to see what the details of these numbers are, because if they say that there is a billion dollar liability out there that has not been reported, then I would expect that there is going to be a billion dollars added to the borrowing for this year to cover that, because otherwise we are really being disingenuous with that number, really.”

Davis said he expected the former government to reveal the liabilities in its pre-election report. However, the former government contends that it included in the report what the fiscal responsibility legislation requires, which includes government revenue outturn and forecasts for the current and next three years; government expenditure forecasts for the current year and next three years; approval of new spending since the annual budget; fiscal balance forecast for the current year, past two years and next three years; net and gross debt for the current year and next three years; level of guarantees; tax relief, remissions and other waivers; the outstanding stock of arrears for all government entities including all new unpaid invoices since the stock of arrears was last reported and other significant financing matters.

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source https://thenassauguardian.com/turnquest-1-bil-liability-issue-is-rhetoric-cost-not-due-this-fiscal-year/