Consultants and temps cost public $38.5M in 5yrs

| 13/03/2018 | 32 Comments

Consultants, Cayman News Service(CNS): The Cayman Islands central government spent more than CI$38.5 million on consultants and temporary staff between June 2012 to June 2017, according to a new report from the Office of the Auditor General (OAG). The latest audit into how the government is spending public cash once again raises questions about value for money as well as the justification, planning, management and general monitoring of what can be costly contracts. Auditor General Sue Winspear said government uses consultants and temporary staff for various justifiable reasons but it does not monitor how much it is spending or consider the issue of value for money for the public purse.

The report, “Government’s use of consultants and temporary staff“, was completed last month and, having been circulated to members of the Legislative Assembly, it was made public Monday. The audit focuses entirely on core government’s use of consultants and temporary workers and does not include government companies or statutory authorities.

Although the public auditor pointed to some improvements in the procurement process, she found that not all the core government departments audited were following best practice.

“The government needs to better demonstrate the value for money obtained from using consultants,” Winspear said. “Most of the consultant contracts we reviewed did not have a business case to justify the need and those that had been prepared could have been better.”

The report makes more than fifteen recommendations on how the government can improve its overall management on consultants and points out the need for better workforce planning to help project the need for contracting consultants and for civil service management to monitor spending.

In total, government spent around $12.2 million on 17 consultants’ contracts that were not justified by a business case, the audit revealed. While most of the contracts she looked at had been subject to open procurement, some contracts were awarded through single source procurement but should have been tendered. The auditor raised other problems which also pose a risk to value for money.

“Once appointed, the government rarely manages or evaluates in any form or way the performance of consultants,” Winspear noted. “Contract management and post-contract evaluation are essential components of obtaining and demonstrating value for money.”

The report gives a detailed breakdown of which ministries and central government entities used the most consultants over the last five years and why. It also singled out the top ten contractors that are benefiting from government work.

RBA Advertising, which is contracted by the tourism ministry to promote Cayman overseas, is the main beneficiary of public cash for government contracts, while the second biggest beneficiary was Deloitte & Touche, which secured almost $3 million. Close behind was Sidley Austin, which represents the financial services sector’s overseas interests and lobbying. HSM Chambers came in fourth place when it comes to securing government work and KPMG was fifth.

Winspear stated that government is not consistently considering value for money when engaging the consultants or temporary staff or evaluating their performance. There are no guidelines in place about what to do if the contractors provide poor or substandard service. She also warned that there are no standard contract for the use of consultants, which means ministries are generally accepting suppliers’ terms and conditions.

The audit found that spending fluctuated from year to year, from a high of $8.4 million in 2012–13 to a low of $5 million in 2013–14. Legal services, IT consulting and implementation, advertising and promotion, major capital projects, and public relations were the major areas where government employed outside private sector contractors to handle its work.

Government used more than 100 different suppliers of consultancy services, ranging from small, sole providers to large companies. The top ten suppliers accounted for around 44%, and the top three suppliers for more than 23% of the $34.9 million total spent on consultants. Government spent around $3.6 million on temporary staff alone, which has more than doubled since 2012, with around $1.3 million of that money going to just three local recruitment agencies: Stepping Stones, Personnel 2000 and Affinity Recruitment.

Responding to the report, Public Accounts Committee Chair Ezzard Miller said his members would be meeting shortly to question government officials about the issues highlighted by the auditor general, but he raised concerns about government not routinely measuring how much it is spending on consultants.

“We find it alarming that the government does not consistently consider value for money when engaging
consultants,” Miller said. “It is unacceptable that the auditor general concluded that there was no
justification for appointing consultants in most cases she looked at and that some consultants had been
appointed without any competition.”

He added, “The PAC is equally concerned with the amount of money spent on temporary staff while qualified and capable Caymanians remain unemployed.”

He said that $38.5 million was a significant amount of money but the report provides a mixed picture about how it is being spent, and he said PAC will be looking to government to respond on how they will address the findings in the report.

See the full OAG report in the CNS Library

See viewpoint on government’s use of consultants by MM

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Category: Government Finance, Government oversight, Politics

Comments (32)

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  1. Anonymous says:

    38+ million in 5 years, gasp!!! Really? Nah, this is just sensationalist sound bites when you really put things into context.

    Over the corresponding period, the government spent over 1.2 billion on personnel costs. If outside expertise was brought in to assist at a cost of less than 3% how is this a big deal?

    The difference between the consultants’ cost and the payroll bill is at least the consulant had to deliver something for the fee received, can we say the same for staff at the Government?

  2. Anonymous says:

    most of them probably ex civil servants who build systems they alone can manage? just another day in paradise….

  3. Burning Spear says:

    Alden and McKeeva’s land of confusion what mess these islands are in everyday things are getting worse for local people while elite drink latte’s and go through the 21 steps of enlightenment.

  4. West bay Premier says:

    Oh value for money , Tourism is booming some says . I don’t see NO ads for the Cayman Islands in the USA , see lots for Jamaica and Turks , Bahamas . Where are the majority of Tourists coming from ? I believe the USA , so that could say that where Cayman are spending those millions of dollars aren’t spent wisely.

    • Anonymous says:

      If you watch BBC or BBC America or Canadian TV as I occasionally do, I was surprised by the frequency of such advertisements. But you never let fact get in the way of a good rant…

    • Anonymous says:

      Up until yesterday I would agree with you but last night (Tuesday) there was an advert on 1 of the main US channels for the Cayman Islands, and I cannot remember the last time I saw one.

    • Anonymous says:

      I saw a very short ad on US cable the other night. Some girl in a bikini swimming underwater. She could have been anywhere. There was nothing at all to distinguish Cayman from anywhere else in the filming. Complete waste of money there are so many other things they could have shown that sets Cayman apart.

  5. Anonymous says:

    There has to be a reality check in terms that Cayman has a global economy, with 30,000 + people to choose from to lead it (a lot less if we deduct the children, infirm, unwilling). Add in an education system that is not producing (in some cases) what is needed in the work force/politicians, then you understand that there is a need for external consultants on matters in which the Government frankly has no expertise or clue. Think about that, there are a lot of areas where we don’t have a clue, waste management, construction, policing, health, drugs policies etc etc. However, it would be good if these contracts were subject to more scrutiny and more notice taken of the reports produced.

    • Anonymous says:

      But what good are all these reports and expense when the politicians simply ignore them (Miller Shaw report being a prime example)?

  6. Anonymous says:

    “$38.5mln in un-actioned consultant advice”, would be a more accurate headline. The true “knowledge vacuum” is likely 10 times that figure, much of it occupied with hot-air and ego.

  7. West bay Premier says:

    I think that everyone should be able to see that there were 17 cases of hiring Consultants with no business plan , and that there is wrong going on . Most People won’t correct anything unless they see it or be told that it’s wrong .

  8. Anonymous says:

    The Civil Service is the largest employer of Caymanians on this island. Surely with that enormous pool of talent they wouldn’t need consultants/specialists to help them navigate the complexities of running a country with the population of a small town.

    I suggest they take a run at it on their own and see how it goes. I am sure they can find better ways to spend the extra $7M/year they are wasting on consultants. Maybe they could open an Iguana Experience Center.

  9. Anonymous says:

    This expenditure will help to identify the senior positions within the government that can be eliminated.

  10. Anonymous says:

    Value for our money spent. never happen in previous and current Government(s) over the last 20 years. Not their money and no accountability in the administrative arm of Govt. and forget about collecting the outstanding debt(s). We have to get elected you know. Increase the next budget like all the previous ones is the mentality, we will find a way to spend it. Oh boy easy come and easy go.

  11. Anonymous says:

    The public management and finance law requires government to obtain independent financial and legal advice before deciding to proceed with certain decisions. That advice comes from … you guessed it, consultants. If they were not hired, the other cry would be that government is not following the law. Damned if you do and damned if you don’t.

    • Anonymous says:

      They wouldn’t be damned for using the reports if they had a strong business case, full accountability on the expense and did more than just read and then ignore all the advice they get from consultants at our expense.

  12. Anonymous says:

    Where are the accounting firms? Based on media announcements over the past 5 years there are other firms who also clearly got a large payoff. Review of port, review of privatization of government entities, review of George revitalization, review of Airport, etc.

  13. Anonymous says:

    Well someone has to do the work while the CS are jet skiing.

  14. Anonymous says:

    Ahh boy… It looks like every Tom Dick and Harry is taking advantage of this simple government. They’re going to run this place into the ground.

  15. Anonymous says:

    not that bad compared to the cost and wastage of the normal civil service every year….
    read miller shaw or e&y reports….

  16. West bay Premier says:

    You leave them in the Government, and next term the consultant cost would be $75 million and that all they would be doing hiring consultants . You all better tighten that money reign . But where did the buck stop and what did the people and the Islands get for that kind of money .

  17. Anonymous says:

    Read carefully the management responses. You get a clear Picture. Lots of fluff from the AG.

  18. Anonymous says:

    So do we believe that all of these world class private sector companies ripped off the Government. I don’t think so. Looks like the AG was scapping to find fault.

    Oh value for money. Tourism is booming.

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