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Focus on diversification; ‘Private sector must up role’
KUWAIT CITY, Jan 15: The State Audit Bureau (SAB) stressed the need for the government to take a serious stance in the structural reform of the public finances and to reform the structural imbalances in the national economy, represented by the state’s reliance on a single source of income and the government’s dominance over the economic sectors, as well as the weak role of the private sector in economic development, reports Al-Qabas daily.
According to the bureau’s report, the 2020/2021 fiscal year ended with a deficit of KD 10 million and 772,000 compared to a deficit of KD 3 million and 920,000 after the 2019/2020 fiscal year. The State Audit Bureau suggested the necessity of obligating the Kuwait Investment Authority to adopt international financial reporting standards, when adopting the accounting policies of the general reserve and the future generations fund, in order to achieve transparency for these reserves, as they are part of the sovereign fund. It insisted on obliging other financial institutions on the same, as this has a fundamental impact on the results of their business and financial position. This was earlier approved by the National Assembly through the recommendation of the State Audit Bureau during the parliamentary session held on March 7, 2019 regarding the financial situation of the state but it has not yet been implemented.
The report called for amending the dates set for submitting the statement of the invested funds to the concerned minister, stipulated in Article No. 7 of Law No. 1/1993 regarding the protection of public funds, to be from the end of the fiscal year. This facilitates the work of the bodies referred to in article No. 2, and reduces the differences resulting from overlapping reports in more than one fiscal year. The statement will be issued annually instead of every six months, thus giving a refl ection of the results of the investments of a fiscal year, and replacing the thirty-day period prescribed for presenting the statement in three months so that these bodies can submit audited statements. The bureau stressed that the three-month period from the end of the fiscal year specified by the assignment is not suffi- cient to prepare the report, as the Kuwait Investment Authority needs a sufficient period of time to prepare its accounts and extract the financial position of the state’s general reserve and the reserve for future generations, after completing the preparation of the final account of the state and its attached and independent bodies to determine the amount of surplus or deficit in the state’s general budget.