Results of the financial auditing of the 2015 Central Government Accounts

One of the main tasks of the Icelandic National Audit Office (INAO), according to law, is to audit the Central Government Accounts and the accounts of entities that are responsible for operations and finances on behalf of the government. The manner in which such work is performed and the results thereof are presented to the Alþingi in an annual report.

The report, entitled Audit of the 2015 Central Government Accounts, points out a few issues the INAO believes should be improved in the state’s preparation of financial statements and financial management. The main comments and recommendations are as follows:

  • The closing of the government accounts continues to significantly deviate from general accounting rules. Due to the treatment of accrued indexation and exchange rate changes of loans and liabilities of the Treasury, the INAO believes the financial statements to be in excess of ISK 72,9bn. This does not affect the equity position of the state.
  • The INAO believes contributions to the IDA to be an operational contribution and not an initial contribution and should be debited as such in the Central Government Accounts.
  • At the year-end 2015, commitment for the initial contribution to the Asian Infrastructure Investment Bank of total ISK 457bn should have been debited in the Central Government Accounts.
  • It has been agreed to increase the employer‘s contribution to Section A of the Government Employees’ Pension Fund to 15.1% as of 1. January 2017. The total contribution to Section A of the Government Employees’ Pension Fund will thus be increased to 19.4% to keep the Fund’s overall status in balance.
  • Since the Central Government Accounts were published the government announced that earlier statements on complete state guarantee on all deposits were no longer in effect.

The report, as usual, is quite detailed and contains various other comments and recommendations.

The total expenditures of the Treasury amounted to ISK 667bn in 2015 while income amounted to ISK 687bn. Recognised assets amounted to ISK 1,011bn at the end of the year, ISK 156bn lower than previous year. The Treasury’s debts amounted to ISK 1,924bn at year-end, decreasing by ISK 103bn between years, whereof pension commitments increased by ISK 73bn. Negative equity at year-end amounted to ISK 913bn.