Central govt to transition to accrual-based accounting by 2022
Prime Minister Dr. Hubert Minnis revealed yesterday that the government plans to transition its public financial reporting to an accrual-based accounting system by the end of June 2022 in the central government. It will then move to have the accounting method used in the public sector at large by 2023.
While speaking at a Bahamas Institute of Chartered Accountants (BICA) seminar, Minnis acknowledged that the transition to an accrual-based accounting system from a cash-based system will be a challenge, but asserted the need to do so in order to garner the public’s trust about the government’s finances.
Minnis said there is a critical challenge the public sector faces with this type of reform.
“I am advised that based on regional and international experience, the lack of adequate technical resources can be a major setback in regards to the implementation of accrual-based accounting in the public sector,” he explained.
“The government is also in need of professional accountants to manage resources and provide financial leadership, so that we can achieve improved decision making and policy outcomes.”
Raymond Winder, Deloitte & Touche (Bahamas) managing partner, told Guardian Business yesterday that he hopes the government can move “faster” in trying to implement the accrual basis of accounting, indicating the need to speed up the target date.
“When we compare ourselves to others in the Caribbean, we happen to be a lot further behind in making that transition, so that is a welcome sign from the prime minister,” said Winder.
“I hope we can stick to that time level and the various commitments from people and capital to make it happen.”
Many countries, including regional neighbors, have already transitioned or have started to move towards an accrual approach.
Winder said the task is achievable once the government is able to engage individuals within the government and also seek help from those in the accounting profession at large.
“I think that can help in terms of training and development, in getting government prepared for that transition,” he noted.
Winder added that the government would need to look at other governments that have made the transition.