The accounting policies and practices employed in the preparation of the public accounts are not doucumented in any procedural or policy manuals , and in most cases , are applied on a convention basis . additionally , the financial statements do not disclose these policies in notes to the financial staements.
full disclosure in the notes to the financial staements staements is to enable the user to better understand and analyse the statements in thier apporiate context . unfortunately , there are no notes found at the end of the stement of assets and liabilities and as such the statements do not provide adequate information for the proper interpretation of the accounts .
the following are some of the more significant accounting policies audit assumes are adopted by the treasury in the preparation of the public accounts .
- Reporting Entity
The accounts presented relate to the operation of the Nevis Island Adminstration only .The accounts of statutory bodies operating on the island of Nevis are not inculuded in these public accounts.
- Cash Basis of Accounting
The public accounts are prepared using the cash basis of accounting .Therefore ,only those transactions that involve an exhange of cash are recognized in the accounts.Consequently ,revenues are not recordeed until they are received and expenditures are only charged to the account when payment has been made.
- Classification of Financial Transaction
All revenue received that is not payable by law into a specific fund , must be paid into the consolidated fund . the legislature provides the authority to make expenditures out of consolidated funds by the passing of an appropriation act . These revenues and expenditures are reflected as budgetary or ” above – the – line ” transactions in the consolidated fund .
All other transactions generally fall into the category of borrowing , lending or investing activities and result in financial claims on others or future obligations payable from the consolidared fund .
With the exception of loan proceeds , most of these transactions are recorded as ” below – the – line ” or non-budgetary transactions in the annual abstract and are disclosed on a net basis on the statement of assests and liabilities .
Any funds realizes throough loans and other forms of credit are recorded as revenue when the related expenditure is made . The obligation for the future repayment of the loan is not recognized as a liability .
The fixed assets of the administration such as land , buildings , roads , vehicles and equipment are charged as budgetary expenditures at the time of acquisition or construction . Accordingly , while these are not reflected as assets on the statement of assets and liabilites , this does not negate the fact that the administration has substantial holdings of such physical assets .
Represent financial obligation of the Administration to other parties .As a result of Administration’s accounting policies, certain finanical obligation are not record as liablities .For instance, most money raised through loans are usually recorded as revenue and consequently , the obligation to repay the loan is not recorded as a liablity . However, the financial obligations of loan receipts are recorded in memorandum records and are disclosed in the Statement of Public Debt.
- Foregin Currency Transaction
The public accounts are expressed in Eastern Carribbean (EC $) dollars. Transaction occurring in foreign currency are translated to EC dollars at the prevaling exhange rate at the time of transaction .However ,sterling balances and sterling transactions executed by Crown Agents on behalf of the Administration are translated at a rate pre- established by the Treasury.
- Pensions and Gratuities
Pensions , gratuities and other terminal benefits of government employess are treated ae expenditures and changed against the consolidated fund in the periiod in which payments are made . Estimates pension liabilites are not actuarially determined for disclosure in the public accounts.