CIG fails badly on 2015 accounts
(CNS): The government has been given an adverse opinion by the Office of the Auditor General (OAG) on its 2015 consolidated accounts on the basis of around 18 different failings. Despite commitments over the last few years by the deputy governor and assurances that the consolidated accounts of core government as well as the statutory authorities and government companies would be heading towards an unqualified opinion by the end of this administration, the latest set of accounts show that government bean counters still have a long way to go to give the public a truthful account of how they collected and spent the cash.
Finance Minister Marco Archer, who has been credited with significantly improving the state of the public finances, presented the adverse accounts on the last day of the Legislative Assembly. Archer said this was only the second time that government has even managed to produce an entire set of accounts and the last time they were completely disclaimed. He said some of the remaining challenges would be addressed in the forthcoming consolidated accounts for 2016, which are still being audited, but government does not expect to have a clean bill of health until the 2018 financial year.
The minister said the government was not satisfied with the state of its accounts but he pointed to the failings of the US government, which has not had a clean bill of health for 20 years.
The OAG found numerous problems with the accounts that government is likely to continue to struggle to correct. These include the failure to include the public service pension assets and liabilities, poor control of revenue collection and management across the public sector, significant problems with the valuation of government assets, and the failure to state liabilities such as the dump and the environment. The result, according to the auditors, is that the accounts do not represent the real picture.
It is now more than twelve years since government implemented the Public Management and Finance Law, introducing what was meant to be a more precise regime to report its financial statements to the public. But the failure by senior civil servants, especially chief officers, to hold their teams accountable means the public has even less understanding of how government manages the three-quarters of a billion dollar budget it takes to run the country.
See Archer’s presentation on CIGTV below:
Category: Government Finance, Government oversight, Politics
It is time for all Caymanians in the US to go back to your little island and stop visiting or using US resources, or using US for medical or educational help. Your stink is far reaching across the oceans and there is not one true-blooded American (you can have our snowflake libtards) who can stand your whining while you let your system go to hell. Time to put Caymanians on the ICE list. We already have a water-wall, soon come you show your passports and we buy you a one-way ticket home to deal with your own problems.
I thought that is why they appointed the Wonder Boy as the new Accountant General??? This is what he is supposed to be doing.
It goes beyond him, the incompetence is pervasive throughout the entire Department and its leadership.
Wonderboy is just a token Caymanian appointment, don’t expect him to lead them out of this mess. He didn’t get to where he is by holding people accountable.
If you know how the relationship between the Accountant General and the respective CFO’s work, you will realise this is an ignorant statement.
I was told that CFO’s do not report to the Accountant General, they are accountable to their chief officers.
If CFO’s are allowed to do whatever they want and not be held accountable by the Accountant General or the Chief Officer of Finance (formerly Financial Secretary), why should the Accountant General or the Chief Officer of Finance be held accountable for all of the Government’s accounts?
The Civil Service is a mess! All under the “great leadership” of the Deputy Governor!
A lot of people are not held accountable in the civil service so most of them feel no pressure to actually do their jobs. There are no repercussions. They screw up, they are placed on paid leave for years, they are not performing, they get promoted or transferred to another section in Government.
They get qualified or adverse audit opinions and there is no investigation as to why much less holding anyone accountable, they just shrug their shoulders, face a temporary PR nightmare and move on.
It is not difficult to see why private sector workers are disgruntled and complain about civil servants. Not all are lazy but they are few and far apart.
This cavalier attitude starts with management and trickles down the totem pole. Bosses who come in at 10am and leave at 3pm and take 2 hour lunches, soon employees are following suit and nothing is said or done.
Deadlines are not met, nothing is said or done.
Their performance agreements and assessments are a joke and are only there for show because you have some bosses who just rubber stamp them and give their employees the average grade.
Try to learn that the plural of CFO is CFOs not CFO’s. You have apostrophe disease which means we can discount what you say.
The simple-minded always tend to focus on the insignificant things and miss the substance of the post.
Does the poster’s misuse of the apostrophe punctuation make the post any less true?
When you don’t have a strong argument, just flail wildly and attack anything.
Wonder Boy came in late 2015, after this financial year had passed.
An estimate of future dump liability (assume this means remediation cost since there is no current legal liability) or environmental liability (what environmental liability?) would be nothing but a wild guess. There are too many uncertainties. Why keep beating this horse. Fixing the dump depends on commitments not yet made.
What on Earth do the failings of the US government have to do with our government not being able to produce proper financial statements, and records. Worst possible sort of naive excuse for the failure of our own systems. Might as well add – don’t sweat the gun crime in Cayman – it is far worse in the US.
Although the consolidated accounts of Government may have received an adverse opinion, I do not think in prior times any better opinion was received. There may be criticism of Minister Archer but where among the candidates for the assembly will be found anyone as suitable and qualified for the job of Minister of Finance except possibly fellow Progressive candidate Roy McTaggart?
Really? I can think of a few
Ezzard Miller – Chairs the Public Accounts Committee
Winston Connolly – A Caymanian Lawyer same as Marco and just as bright
Alva Suckoo – Has an MBA from Syracuse
you all need to stop thinking of Marco as the Financial Messiah he is no smarter or better than any of those three I just mentioned
Ezzard Miller?! Somebody call the circus, their clown has clearly escaped.
Mr Conolly is not a candidate for 2017 and Mr Suckoo and Mr Miller are trained in areas apart from Finance.
Have we all forgotten the old Minister Of Finance who had no education and knew nothing of accounts as demonstrated by the First Cayman Bank fiasco? The megalomaniac insisted on signing the Cayman currency notes. How soon we forget and be careful what you wish for. We certainly do want him back.
Why don’t we just outsource all of the this stuff to a real world, private sector accounting firm?
Also have the Minister of Finance, Cabinet Members and Chief Officers sign some serious Employment/Perfomance Agreements. If you as the “powers-to-be” are unable to produce what should be very ordinary financial documents, then you do not need to be in those particular jobs – as you have continually proven your incompetence.
We in the Cayman Islands continually brag about being a financial centre, but our Government does not even know how to account for a national budget that is under a billion dollars annually.
Okay now for the sarcastic part – can we ask the Dart people to help, seems like they know how to manage dollars.
What are you talking about having Dart help, Camana Bay is already the unofficial monetary capital of both George Town and West Bay. While Dart cannot control the voting, the Dart $$ is continue to speak loudly – administration after administration – next district to buy out – Little Cayman!!!!
As much as I hate to say it, the best consultancy contract that could have been given would have been to one of the big 4 to implement as system that could actually be properly audited..
Firstly you do not need a big four. The big ten or even twenty can do the job. With 1200 accountants working on the island, why can this problem not be fixed?
In Bensons day we did not have this crap.
And in Lloyd George’s day women didn’t have the vote. Feeble comment, Mr Johnson.
What a pathetic response Mr Anonymous. I see u have a few thumbs down!
For your edification 9.02pm, Mr Johnson’s comments emanate from a highly qualified and highly respected member of the accounting profession. I suggest you direct your criticism to the highly paid so called “accountants” in the Civil Service who after decades have still been unable to produce accurate financial statements.
Oh please 3:25, I know who Mr Johnson is.
Great then show respect. At least he gives his name. Who the heck are you.
Someone without all the money he got AFTER he came to Cayman with nothing.
Granted, but back then they were doing ‘cash accounting’ which did not give any real indication of a true picture. That is, if I have not paid it yet then there is no need to acknowledge it.
The system could be audited -if civil servants would actually comply with it. Its hardly rocket science. Its not being complied with because a) it would show an unpleasant reality and b) there are zero penalties for non compliance.
I’m convinced there is widespread resistance at all levels of government to proper records and financial controls because it would be too unpopular with voters to prevent all the under-the-table perks and deals that are done and the honesty system that is used and widely abused in many ministries. As long as no-one is accountable the favour system can operate in full swing. The only people who lose out are the honest hard-working ones.
I’ve always been amazed at how the government here can say they have a huge surplus and the next day say they don’t have reliable records. Looks like Marco and Alden’s surplus is no exception…they have done really well selling work permits to who ever asks.
Overstated assets, understated liabilities and inability to collect revenue.
“The OAG found numerous problems with the accounts that government is likely to continue to struggle to correct. These include the failure to include the public service pension assets and liabilities, poor control of revenue collection and management across the public sector, significant problems with the valuation of government assets, and the failure to state liabilities such as the dump and the environment. The result, according to the auditors, is that the accounts do not represent the real picture.”
As a CPA, I am appalled. How worse can it get? Well at least not as bad as the US is the response from those in charge.
Disgraceful response from the Minister of Finance. This is inexcusable and disappointing to hear him be dismissive of some very serious long term problems in the government that he claims are improving under the progressives.
I would’ve expected this gibberish from his precedessor not someone who holds themself out as a model of professionalism and fiscal prudence. You have become like the rest. This is nothing Deputy Governor Manderson and Mr. Archer should take lightly and not the time for political rhetoric. It is clear that without any accountablity within senior management of CIG nothing will change.
Why on earth should the public service pension assets be included? The whole point in setting a pension up under trust is the assets are seperate from the sponsoring employer. The trouble is the public service management law does not recognise that difference so every year CIG has to include a meaningless item of data in their accounts.
You are wrong on pensions – Sadly for all of us.
While the private sector pension plans are defined contribution plans where the assets are held separate from the employer the Government plan works differently. It is a defined benefit plan whereby the benefit you get is a function of your salary in the few years before you retire. You are guaranteed a certain payout regardless of the assets currently in the trust. The problem here is that government has knowingly been under-funding the trust for decades. The current assets are nowhere near enough to pay everyone what they have been promised. This underfunded amount is huge and this is why government want to avoid reporting it to the people.
This is the case….defined benefit pensions…in many jurisdictions for public servants so stop trying to demonize it. How many civil/public servants do you see living in Vista Del Mar or Yacht Club or all these other gated communities? Correct…none. But these guys living there are on defined contribution schemes and annual salaries and bonuses that are disgracefully hair raising and allow them to retire in their 40s so stop with the outrage about civil servants.
Well done Marco and PPM proving again that your logic and financial management is all about smoke and mirrors to deceive the public
All you can hear is Marco this and Marco that yet he is so relax to point at the USA system, wow all that glitters surely isn’t gold where he is concern. I often listen to him on radio and he is as arrogant as they come.
Ah…pointing to the US as an example of this being OK? Seriously? Nothing to see here…
So someone explain this. I listen to the LA and saw the financial statements of core government and sacs being tabled and all had received either qualified opinions or qualified opinions. So we know for certain how our money is being spent.
How is it that the EPS did not get a qualified option. It seems to me that your statement about the public not knowing how it’s money is being spent is a grossly inaccurate statement.
What we want to know is why was the EPS given an adverse opinion? I bet it has nothing to do with the quality of the financial statements. Come on CNS you can do better ?
Well, the fact that the majority of individual ministries got qualified or un qualified opinions does not mean that the consolidated accounts should.
First, some of the ministries did not. Once you have one part of the whole structure with unverifiable or auditable results the whole barrel is poisoned. If you have four departs, A through D, You cannot add A 1 plus B’s 2 plus it may be 2 or 3 for C and “we have no idea what D should be” and get to “the consolidated position is not materially different from 5”, because you have no idea what D’s position is.
Second, even if you have perfect results for the individual ministries, if you have no confidence in or information on the consolidation adjustments, you still cannot issue a clean or qualified opinion. The AG knows what they are doing, and trust me, no one issues an adverse opinion lightly. Try actually reading the report to see what the issues are rather than jumping to the conclusion that the Ag is out of line, when you either have no knowledge of the auditing process )or are a REALLY bad accountant).
All that glitters is not gold where Marco is concerned
When Central Accounting was eliminated by George McCarthy, the Cayman Islands public accounts descended into chaos.
Imagine having a supermarket and then deciding that the deli, the fresh produce, the bakery and the meat all have to run independent accounts?
The painful thing is that no one in the government had the courage to stand up to such madness.
If the desired result of such foolhardy behaviour was the instability of the government, then it was successful.
The new politicians will most certainly have their work cut out.
If they find obstinate bullfrogs squatting in the permanent secretarial positions, they should fire them.
So back in the day, “Central Accounting” took into account public service pensions assets and liabilities, problems with the valuations of government assets and the failure to state such liabilities as the dump and the environment….those things that so worry the auditors? No of course Central Accounting didn’t. And your supermarket “analogy” is childishly pathetic and of no relevance.
And your disagreement of a fact speaks volumes. Affiliate with truth, not benefactors.
*with
Physician, heal thyself.
….and you are the PPM’s best? Glad you pointed to the USA, hope you follow the same fate as Hillary
Coincidence or strategic by presenting these accounts on the last day of the LA sitting? Hmm?!
Until the public service (CS & statutory authorities) of wasting public funds is curbed and reversed, no Government will present a balanced budget.
Where are Franz Mandersoon’s actions on effecting real positive change within the public sector?
12:16. Going from a disclaimer to an adverse opinion is exactly the change the DG talked about. Qualified option next then unqualified opinion.
Your trust and confidence is wonderful to behold. Cause getting to the next step means doing some really painful things like valuing the unfunded liabilities, rather than just not throwing away all the receipts. Adverse opinion may be as good as it gets.
Deputy Governor Franz Manderson’s leadership the continued lack of accountability, the usual spin and excuses are a big part of the problem.
It would have been funny if it has not been tragic.