Frequently Asked Questions
The Principal Auditor is independent of the executive arm of the government. The Principal Auditor’s role is to report to the Gibraltar Parliament on the accountability of government departments, statutory authorities and agencies. This is achieved by providing independent information and assurance on whether government’s activities have been carried out and accounted for in accordance with the Parliament’s intention and with due regard to securing value for money and the avoidance of waste.
The Principal Auditor is appointed by the Specified Appointments Commission in accordance with Section 56(2) of the Gibraltar Constitution Order 2006.
The work of the GAO is undertaken under the powers vested on the Principal Auditor under the Gibraltar Constitution Order 2006 and the Public Finance (Control and Audit) Act.
The Principal Auditor is constitutionally independent of Government. In the exercise of his powers he is not subject to the direction or control of any person or authority. In the determination of the matters that will be subject to audit the Principal Auditor exercises complete discretion. Although the GAO is technically still part of the Government, a proposed new audit law considers to establish the GAO under the stewardship of the Principal Auditor thus providing the independence of the GAO.
Who is responsible for the preparation of financial statements for government departments, statutory corporations, authorities and agencies?
The Accountant General is responsible for the preparation and submission of the government consolidated financial statements to the Principal Auditor in accordance with Section 52 of the Public Finance (Control and Audit) Act. Each individual statutory corporation, authority and agency is required to prepare and submit to the Principal Auditor their respective financial statements as prescribed by the respective legislation. It is, therefore, not the responsibility of the GAO to prepare the financial statements of the government, statutory corporations, authorities and agencies.
Why is it necessary to audit government departments, statutory corporations, authorities and agencies?
The Principal Auditor, through the audits of government departments, statutory corporations, authorities and agencies, assists the Parliament in holding the government accountable for its use of public moneys.
The mandate of the Principal Auditor is provided in the Gibraltar Constitution Order 2006 and the Public Finance (Control and Audit) Act. The Principal Auditor is the auditor of the public accounts of Gibraltar and of all courts of law and all authorities and offices of the Government.
The Principal Auditor is further required to audit the accounts of a number of other bodies, such as those of statutory corporations, authorities and agencies; and other bodies whose accounts the Principal Auditor is specifically required or empowered to audit and report on under their respective laws.
As provided by Section 60 of the Public Finance (Control and Audit) Act, the Principal Auditor is empowered to audit and report on the accounts of every person, corporate or similar body that is in receipt of a contribution from public moneys; or in respect of whom the Government has given a guarantee to any person; or whose operations may impose or create a liability on any public moneys – not being a body corporate whose accounts the Principal Auditor is for the time being specifically required or empowered to audit and report on under any other law.
He also has a statutory obligation to examine liquidators’ accounts in respect of companies in compulsory liquidation and official trustee accounts of debtors adjudged bankrupt where the winding up commenced prior to 1 November 2014, the date of the coming into force of the Insolvency Act 2011. The Principal Auditor also audits all Government’s pension funds and other special funds.
A financial statement audit results in an independent audit opinion being expressed on the annual financial statements of the Government and Statutory Corporations, Authorities and Agencies. This opinion expresses whether the financial statements comply with accounting standards, laws, regulations and Gibraltar Government Accounting Instructions. A value for money audit assesses whether government departments, statutory corporations, authorities and agencies carry out their activities effectively, efficiently and economically; and in compliance with all relevant laws.
At present there is no independent audit of the GAO. However, the proposed new audit law provides for the appointment of an auditor by the Government to audit the accounts of the GAO. The accounts, together with the report thereon, shall be presented to the Government and laid before the Parliament by the Chief Minister. The independent auditor shall also have the power to carry out economy, efficiency and effectiveness examinations of the operations of the GAO. A copy of such report shall also be presented to the Government and laid before the Parliament by the Chief Minister.
Reports issued by the Principal Auditor can be found on the Reports page of this website.