(CNS): Five years after arriving in the Cayman Islands and on the eve of his departure, Auditor General Alastair Swarbrick has finally signed his first ever set of government consolidated accounts after his office was able to conduct an audit on the information submitted for the 2013/14 financial year. The accounts were, however, issued with an adverse opinion and he said the state of government finances remains far from ideal. But as he prepares to leave, Swarbrick said that, given the “appalling” and “dire” circumstances he found the public books in when he arrived in 2010, genuine efforts have been made by government to improve the situation.
Speaking to the media at his last formal press briefing before he leaves Cayman for his new job in Paris with the OECD and reflecting on his five years, he said the situation with the accounts had been a major stumbling block to his office’s ability to do more proactive audits on general governance and the management of public spending.
Swarbrick said that the Office of the Auditor General (OAG) had been preoccupied with assisting government accountants with their financial reporting, diverting the team’s attention from other work regarding not just the management and expenditure of the public purse, but the quality and delivery of services and whether they provide value for money.
While it may appear that the audits, reports and recommendations which Swarbrick’s team have undertaken over the last five years have had little impact, as reports keep revealing the same failings and shortcomings in governance procedures, he said that some of the audits had made a real difference. He pointed to the introduction of a travel policy and a saving of some $1 million as a result of following the recommendations his office made to tighten up the expenditure on travel and hospitality by both the political and administrative arm of government. He said that government is also now working on a procurement law following his first report on the procurement process back in 2011 and in general things were beginning to change.
However, the outgoing auditor spoke about the frustratingly slow pace of change and the magnitude of the financial reporting situation that has dominated his five year tenure as the auditor general. Swarbrick said, however, that the publication of the Entire Public Sector consolidated accounts that he signed off for the 2013/14 financial year, despite being given an adverse opinion, was a sign that things had certainly improved.
The report has now been sent to the Legislative Assembly and the public will get to see the first copy of a properly audited annual report for core government’s entire finances for the first time since the 2003/04 financial year. Government went for over a decade without being able to meet the requirements of its own Public Management and Finance Law, which came into force in 2005.
Alongside the ESP, the auditor said that he has also completed another annual review of the overall state of accounts at the ministries, portfolios, government companies and statutory authorities, which will also be released into the public domain within the next few weeks.
Swarbrick pointed to the significant advances in government financial reporting but he said it was important not to “overstate” the case as it was by no means where it should be. He said it should be normal for all government entities to be submitting accurate and supported accounts on time for audit and for unqualified opinions to be given. But he pointed to the legacy problems of asset values, the pension and healthcare liabilities and numerous other issues that are still undermining the quality of the accounts. But there was no doubt, given the terrible starting point, the significant effort to address the problem had resulted in noticeable progress.
But the amount of time, effort and resources spent on addressing the situation was one of the biggest disappointments during his tenure in Cayman as it seriously limited the work of his office to conduct public audits on much wider issues than the fundamentals of financial reporting. With so many challenges in government, Swarbrick said he regretted the fact that many of the subject areas he wanted to look at were sacrificed for the sake of getting the public accounts on track.
Check back to CNS later for more from the auditor ahead of his departure and the release of another damning audit report this Friday.