Office of the Auditor General
Victoria Hall
11 Victoria Street
Hamilton HM 11, Bermuda

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Tel:
Fax:

(441)296-3148
(441) 295-3849

Email: auditbda@gov.bm
Website: www.oagbemiuda.gov.bm

AUDITOR'S REPORT

To the Minister of Finance
I have audited the balance sheet of the Government Employees Health Insurance Fund as at
March 31,1997 and the statement of revenues and expenses and fund deficit for the year then
ended. These financial statements are the responsibility of the Fund's management. My
responsibility is to express an opinion on these financial statements based on my audit.
Except as explained in the following paragraphs, I conducted my audit in accordance with
auditing standards generally accepted in Bermuda and Canada. Those standards require that I
plan and perform an audit to obtain reasonable assurance whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation.
I was unable to obtain sufficient appropriate audit evidence to support the accuracy and
completeness of contributions revenue of $10,647,534. As a result, I was unable to determine
whether any adjustments might be necessary to contributions, excess of expenses over revenues,
assets and fund deficit.
For the previous year, my examination indicated serious deficiencies in the accounting records
and in the systems of internal control. The opening balances of the accounts enter into the
determination of the balance sheet and the statement of revenues and expenses and fund deficit,
and I am unable to determine whether adjustments to the opening balance of the fund deficit
might be necessary.
In my opinion, except for the effect of adjustments, if any, which I might have determined to be
necessary had I been able to verify opening balances and contributions revenue as described in
the preceding paragraphs, these financial statements present fairly, in all material respects, the
financial position of the Government Employees Health Insurance Fund as at March 31, 1997
and the results of its operations for the year then ended in accordance with accounting principles
generally accepted in Bermuda and Canada.

Hamilton, Bermuda
March 7, 2001

Larry T. Dennis, C.A.
Auditor General

211

GOVERNMENT EMPLOYEES HEALTH LNSURANCE FUND
BALANCE SHEET
MARCH 31, 1997

1997

1996

$

ASSETS
CURRENT ASSETS
Accounts receivable
Due from the Consolidated Fund of the Government
of Benmida (note 4)

382,199

229,665

973,022

1,688,938

1,355,221

1,918,603

LIABILITIES AND FUND DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued liabilities
Claims payable to Bermuda Hospitals Board
Claims payable to Mutual Reinsurance
Other claims payable
Contributions received in advance

62,020
323,542
48,098
1,332,956
817,031

3,862,400

2,583,647

2,507,179

665,044

1,355,221

FUND DEFICIT

45,500
633,266
250,613
2,070,368
862,653

1,918,603

The accompanying notes are an integral part of these financial statements.
212

GOVERNMENT EMPLOYEES HEALTH INSURANCE FUND
STATEMENT OF REVENUES AND EXPENSES AND FUND DEFICIT
FOR THE YEAR ENDED MARCH 31, 1997

1997

1996

S

$

REVENUES
10,647,534
148,306

9,282,035
193,575

10,795,840

9,475,610

11,766,020
599,405
188,757
44,761
19,250
15,000
4,782

10,180,458
558,149
196,585
40,763
13,000
1,700
4,545

12,637,975

Contributions (note 3)
Interest

10,995,200

1,842,135

1,519,590

EXPENSES
Claims (note 3)
Premiums - Mutual Re-insurance Fund (note 5)
Salaries
Administration
Audit fees
Actuary
Telephone

EXCESS OF EXPENSES OVER REVENUES
FUND (DEFICIT) EQUITY, BEGINNING OF YEAR

854,546

2,507,179

FUND DEFICIT, END OF YEAR

(665,044)

665,044

The accompanying notes are an integral part of these financial statements.
213

GOVERNMENT EMPLOYEES HEALTH LNSURANCE FUND
NOTES TO THE FFNANCIAL STATEMENTS
MARCH 31, 1997

1.

AUTHORITY
The Government Employees Health Insurance Fund ("the Fund") was established under the
Government Employee (Health Insurance) Act 1986 and its subsequent amendments.
The Fund provides health insurance benefits for government employees and their enrolled
dependants and covers medical expenses, such as hospital stays, doctor's visits and
prescription drugs. The Fund derives its revenue from contributions received from
contributors and the Government of Bermuda. Contributions to the Fund are compulsory
for all government employees, and are matched by an equivalent amount from the
Consolidated Fund.

2.

ACCOUNTING POLICIES
The financial statements have been prepared in accordance with accounting principles
generally accepted in Bermuda and Canada and include the following significant
accounting policies:
(a) Translation of Foreign Currencies
The financial statements are reported in Bermuda dollars. The Bermuda dollar is at
par with the United States dollar. Assets and liabilities are translated at the exchange
rate prevailing at the balance sheet date. Revenues and expenses are translated at the
exchange rate in effect of the transaction date. Translation gains and losses are
included the statement of revenues and expenses and fund deficit.
(b) Use of estimates
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of
revenues earned and expenses incurred during the year. Actual results could differ
from these estimates.

214

GOVERNMENT EMPLOYEES HEALTH INSURANCE FUND
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 1997

3.

CHANGE IN ACCOUNTING PRESENTATION
The Government Employees Health Insurance Fund (GEHI) and the Supplementary
Insurance Scheme Fund (SIS) have been combined for the fiscal year ended March 31,
1997. The previous years' balances have been restated to reflect this change. The two
Funds fall under the Government Employee (Health Insurance) Act 1986 and its
subsequent amendments and in management's opinion should be presented together.
1997
$

Contributions
GEHI
SIS

1996
$

10,401,754
245,780
10,647,534

9,282,035

11,461,313
304,707

9,908,405
272,053

11,766,020

Claims
GEHI
SIS

9,050,125
231,910

10,180,458

DUE FROM THE CONSOLIDATED FUND OF THE GOVERNMENT OF BERMUDA
The amount of $973,022 (1996 - $1,688,938) due from the Consolidated Fund of the
Government of Bermuda represents the net position of certain revenues received and
expenses paid by the Consolidated Fund on behalf of the Fund, which has not yet been
reimbursed. The rate of interest accruing on the balance is 7% per annum.
PREMIUMS - MUTUAL RE-INSURANCE FUND
The Fund pays premiums to the Mutual Re-insurance Fund which provides reinsurance for
the costs of haemodialysis treatment, long-stay hospital care, hospice care and diabetic
counselling.

215

GOVERNMENT EMPLOYEES HEALTH INSURANCE FUND
NOTES TO THE FPNANCIAL STATEMENTS
MARCH 31, 1997

6.

RELATED PARTY TRANSACTIONS
The Bermuda Hospitals Board, the Mutual Re-insurance Fund, the Consolidated Fund and
the Government Employees Health Insurance Fund are under the common control of the
Government of Bermuda.
All transactions between the Government Employee Health Insurance Fund and the related
parties are in the normal course of operations.

7.

STATEMENT OF CASH FLOWS
A statement of cash flows has not been prepared as it would not provide any additional
useful information.

8.

COMPARATIVE FIGURES
Certain comparative figures have been restated to conform to the current year's
presentation.

216