CIG’s full 2016 accounts receive adverse opinion
Finance Minister Roy McTaggart in the LA, 16 March 2018
(CNS): The government’s Entire Public Sector consolidated financial report for the year ending June 2016 has received an adverse opinion from Auditor General Sue Winspear for a long list of reasons, including the government’s failure to fairly state its liabilities and of poor controls over coercive revenue. While government’s financial reporting has improved from the dire situation just a few years ago, the public is still not able to depend on the numbers being presented on how government collects and spends the people’s money.
Finance Minister Roy McTaggart told the Legislative Assembly last week that by the end of 2019, the Entire Public Sector consolidated financial statements should receive, at the very least, a qualified opinion because the matters that led to an adverse opinion on this report are being addressed.
But McTaggart said government and the Office of the Auditor General (OAG) remain at odds over one issue, which is whether or not the public sector pension should be included. The 2016 accounts exclude this because, the minister said, it is held in trust for civil servants and is not government’s money, while the auditor says government has control and there is a legal requirement to include it. Describing it as a technical disagreement which is behind the adverse opinion, he said government and the audit office are in discussions about removing the qualification point.
The liabilities of post-retirement healthcare obligations for civil servants and their dependents is another problem for the government’s books, as well as the problems of starting balances and the questions surrounding the value of government’s property, roads and other assets.
The auditor also found that she could not confirm the cash that government collects because poor management controls of the revenue meant she did not receive all the evidence needed to support the claims in the accounts. McTaggart said the government would be seeking outside professional advice to ensure it addresses the problems identified regarding the revenue before the end of the current two-year reporting period.
As he presented the report to his colleagues, McTaggart said progress had still been made because in the past the auditor completely disclaimed the government’s efforts to provide the people with a financial report on the public purse for previous financial years. Admitting that there was a long way to go, he said that government was working on the list of qualifications with the goal of getting a clean opinion in the future.
Category: Government Finance, Government oversight, Politics
Remember when Mac fought tonhave the CS Pensions excluded and Alden went crazy fighting the idea ? Now his agovt doing the same thing! What a difference and election can make
And the beats goes on…….
Why is no one asking the Head or Acting Chief Immigration to be held responsible for all the mess there and resign? Is it because she’s not Caymanian or a British man, then there’d be outrage?
There is no equivalent of “responsibility” in Absurdistani.
The Auditors requests are totally unreasonable and if followed through we will end up with more ‘Fairy Tale like’ figures if we carry through with them. Include the value of the roads as an asset? What about the value of the water around us , in canals , ponds etc.? What about the value of the air above us? ( such as the airspace directly above our ‘underpasses’ ). Couldn’t we just increase the value of these things and end up with a perpetual ,humongous, surplus?
A bricklayers understanding of accounting.
Accounting has crossed into fairyland these past few years.
All people including Mr. McTaggart will one day stand before God to give account of themselves. I am sure he is up for it.
Please leave this wonderful man alone as he is very highly qualified and doing his best to get things into order.
Does that mean God is going to visit Hell?
Its not only our accounts that have an adverse opinion. Rightfully so.
So the much celebrated accounts are not to be celebrated? The pension liability has to be included for the accounts to be a fair picture of the state of Caymans government finances, otherwise it is not a true picture and will never get a proper sign off. Everywhere else has issues with pensions, mostly declared and I cannot help wondering why our lot want to hide it. Maybe finances are not so healthy and we can’t afford the damn port or other expenditure after all? Better to fill that hole ( and there has to be one) out of the surplus ( if that’s real) over time and cut our budget to a manageable size.
creative!!!?
This is as good as it gets. What McTaggart does not fix is not fixable. In case you haven’t noticed, no governments anywhere follow the accountants rules.
Presumably someone has a picture of Ezzard taking back the framed certificate from Ken Jefferson to commemorate the government’s clean audits?
Roy stop defending the incompetence of the civil service management. These issues must be owned by the CO’s and DG that run public sector.
Make no mistake the buck stops with DG Franz Manderson as head of the civil service.
Let’s hear the spin from the smooth talking DG about a world class civil service who is accountable.
We cannot blame MrMcTaggart for the problems going back decades, which he has inherited. We can certainly however blame our incompetent civil servants many of whom cannot perform the functions they are paid to perform. Once again Government are now turning to the private sector whose fully wqualified professionals have to sort out the mess created by the incompetents.
Franz Manderson is ultimately accountable
We can however blame him for being at best disingenuous and at worst deliberately misleading. To describe failure to include a liability when the law states it should be included a technical disagreement is quite astonishing for a professional accountant. When he was in the private sector as an auditor you can bet your boots he didn’t tell clients that their breach of US GAAP or IFRS were merely technical disagreements. Tell it how it is Mr McTaggart – the accounts do NOT provide a true and fair view. Simple as that.
And that of course is passing lightly over the other problems, like not being able to account for the cash that was collected or give any assurance that all taxes that were payable were paid or are held on the books as debts. That’s not even a technical disagreement – that’s not being able to assure the public that there isn’t wholesale misappropriation or sweetheart deals.
Which I am sure there is (wholesale misappropriation AND sweetheart deals). Corruption needs fuzziness to hide and flourish, that is why we will never see transparency in government.
Or, from the inside: ‘do it one way’. Wait, we no longer want it done that way. But don’t change, we have friends we want to give consulting gigs to. Whatever floats your boat.
Though if, as an attending accounting professional, he fails to point out the obvious when passed the microphone, he becomes culpable. Such a shame.
Roy McTaggart is a qualified accountant and must know that the argument he puts forth for not including the Public Sector Pension in the Govt accounts is entirely wrong. It is a Govt liability, and Govt must fund it. As such it must be included, however bad it makes the balance sheet look. It will be of interest to Caymanians to see their country is on the brink of bankruptcy because of it, but sticking your head in the sand won’t make it go away.
I agree. Roy knows better and both pension and health care liabilities must reflected on the balance sheet. From one chartered accountant to another! 🙂
He’s not chartered – only certified.
Question is – “ How good an Accountant was/is he? “. Passing exams is one thing, but applying the knowledge in practical situations is another.
Its a liability, umpteen years in the future. We shouldn’t lose track of it, but it shouldn’t be counted against current debts.
How about the present value of that debt then?
That’s not what they are asking for, though. Current level is known, sown and paid every month. What they want is the amount for sometime in the future to be counted against current revenue.
RIght, the money we need for the future will mysterious appear as we need it. Cayman has been riding too high off donations from billionaires/millionaires and drug lords, good luck in the future, times are a-changing.
So why does the U.K. government keep lots of things “off balance sheet” especially the crippling PFI agreements they got into exactly for that reason…to keep the books looking good. Socialist Prime Minister Gordon Brown loved PFI because it meant he could spend like a drunken sailor and leave the next generation to pay for it. We economists call it inter-generational taxation. Roy knows all this of course.
PFI is but a trifling 300bn quid compared to unfunded public sector pension liability of 1.5tr! (5bn and 270bn respectively pre Gordon Clown!)
How is it that, despite having a minister with an exceptional background in accounting and finance, we still can’t get our government to come up with a solution that helps us improve the monitoring and record retention of financial transactions?
It really does boggle the mind.
Because in the real world, we do not let Bean-counters try to grow the beans, only count them. Invariably any private company (other than accountancy firms) that let an Accountant have control of their company; will struggle to survive in the following years. Put them in charge of unsuccessful organisations such as the Civil Service, and you end up with this debacle.
Well duh. A year late too, not that it matters. Years on, the minimum threshold of “completeness” under the PMFL continues to elude CIG, yet all of the Dept Heads that are responsible (and would be fired anywhere else) get commendations on what a great job they are doing. The ironically-named IRIS accounting system for Entire Public Service, that we paid a great deal of money to deploy in compliance with International Public Service Accounting Standards (IPSAS), is still not adapted across departments, and as we’ve seen, there are departments where no income has been recorded in years (and new Criminal Cases where money was discovered to have been diverted to personal accounts). If we look closely, we can assume we’re also missing the Billion+ dollar Public Sector Pension Board (PSPB) liability, and the post-retirement Healthcare liabilities. Great job everyone! See you next year!
The standards within the civil service should result in firings starting at the top of the service but nothing will change and more excuses will be accepted. The poor management and performance of the civil service will be the downfall of the Cayman Islands.
yawn….just read miller shaw or e&y reports…..
10:33, that’s getting to be a really boring post. Both reports contained kernels of accuracy but we don’t like reports in Cayman that tell us to, for example, privatize Radio Cayman. If you have ever listened to the pompous bozos calling in to Sterling Dwayne and telling him that Radio Cayman must be preserved as a national treasure etc etc you will realize that none of these reports should ever have been commissioned because they will simply come up with things that a Caymanian Government would not do. Like the elections boundaries report…..combine East End and North Side. Of course it makes sense but, Jesus Christopher , no way bobo.
civil service…a rats nest of incompetence and failure
Need to hire more qualified expats
10:32, Unlike my bank and insurance company who don’t answer my calls or emails????
You have options. That’s the point.
No that’s indifference. Completely different. 😉
At least if a bank employee gets fired we don’t have to keep paying them or their pension for another 40 years!
time for more awards franz…..zzzzzzzzzz