Abuse led to 800% budget overrun at dump

| 02/10/2018 | 39 Comments
Cayman News Service, Cayman Islands dump

George Town Dump, Grand Cayman

(CNS): Government has finally released a series of internal audit reports documenting abuse and mismanagement of overtime payments at the Department of Environmental Health, which led to an eye-watering 2016/17 budget overspend of 796% — more than CI$2.24 million. The audit, which started in November 2017, was conducted by Andy Bonner, the director of the Cayman Islands Government’s Internal Audit Service and covered three phases, with the final damning report being completed last month.

The review of what went wrong at the dump found “multiple failures and missed opportunities to report the issue across numerous roles and responsibilities within both the Department and the Ministry”.

The audit found a catalog of management failings and made numerous recommendations to address the issue, though all eleven in the final report have been redacted and hidden from public view. In the conclusion of phase 3 of his audit, Bonner described what amounted to an alleged fraud of public cash.

“Our review identified multiple employees from the Department of Environmental Health with implausible 2016/17 overtime records, indicative of widespread abuse and substantial mismanagement within the Solid Waste Collections, Landfill, Recycling and Fleet operations,” he wrote.

“We believe the exploitation of a cultural practice, whereby overtime is routinely accrued before the completion of regular contracted hours, intensified in 2016/17. Inadequate management information renders it impossible to quantify, but a significant number of paid overtime hours could have been regular work hours for which no additional expenditure should have been made.”

Bonner stated that the audit did find that the overspend was also driven by vehicle downtime and staff absenteeism. And despite noting them as “major factors contributing to overtime” for garbage pick-up, it did not find sufficient evidence to substantiate the extent of the 2016/17 increases.

“With inadequate management information, malfunctioning internal controls and conflicting evidence, we believe there is a high probability that intentional abuse of the system was another significant factor behind the increased expenditure,” the audit stated. “We believe a number of options were available to Department of Environmental Health management that could have been deployed to effectively contain the overtime overspend.”

The reports were all released by government on Tuesday afternoon, just a few weeks after the Ministry of Health confirmed that the former DEH director had been retired out of the civil service. Until now, government has made no comment about the scandal surrounding the mismanagement of the dump, and in particular garbage collection, even refusing to acknowledge the absence for almost a year of the director.

But in statement released with the three phases of the audit, officials claimed to have adhered to the audit’s recommendations and that investigations were still going on its findings.

To bolster capacity at DEH, the ministry pointed to the transfer of Richard Simms from Vehicle and Equipment Services and Mark Bothwell from Public Works to the posts of acting director and acting assistant director while government recruits two permanent bosses.

“For the past several months the DEH management team has focused on strict accountability and performance management to deal with the issues of poor attendance and unsatisfactory performance that helped to create the overtime overspend,” ministry officials stated.

“The team has also worked to improve the effectiveness and efficiency of solid waste collections, the area of DEH operations identified as accounting for nearly all the overtime expenditure. This approach has led to a reduction in overtime costs of some 80% over 2017 levels. We believe the success of these efforts has shown in improvements to the regularity of the waste collection service across the Cayman Islands.”

The ministry also stated that the ministry’s chief officer, Jennifer Ahearn, has ensured that senior staff have a clear understanding of their respective roles and responsibilities.

“The ministry has re-introduced internal monthly finance updates to regularise reporting from its finance team to other ministry managers. This also allows the finance staff to provide regular updates on departments’ performance against budget targets,” the release stated. “The chief officer has also taken steps to ensure there is a shared understanding of when matters should be escalated to the chief officer’s attention, and what sort of actions are required to prevent a similar situation in the future.”

The audit made a total of 21 recommendations to prevent a repeat of these significant failings, but eleven have been redacted. While Bonner points to potential abuse by employees, he also implicates both the department and the ministry management.

“Ultimately, the director of DEH had the responsibility of managing the approved budget, avoiding cost overruns and escalating concerns to the ministry, all of which he substantially failed to do,” the audit stated.

“At the ministry level, the CO should have been agreeing and authorizing overtime for the department and the CFO and DCFO should have been monitoring expenditure, budget variances and forecasts, and escalating concerns to the CO to ensure the department was operating within the parameters of its approved budget; however, these responsibilities were not carried out as intended.”

See the audit reports in the CNS Library

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Category: Government Administration, Government Finance, Government oversight, Politics

Comments (39)

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  1. Anonymous says:

    I visited the dump several times this week to dispose construction waste and the environmental health employees at the dump still act if they are still disgruntle and lost in the mismanagement system. Suggestion is that the chief officer for health should offer the employees some counselling. Before they may decide to become drug users. And the mismanagement team that were indentified in the audit report that were released to the public on October 1, 2018. The chief officer for health, ministry of health senior staff and all of the environmental health Will decide to have a sudden drug testing of the environmental health employees. And the employees that were indentified in the environmental health internal audit report that were released to the public on October 1, 2018 that had the intentional impausible over-time money received records. Could be the same employees that will be systemic told and escape as drug free and other environmental health employees be found as drug users and be penalized and terminated from their employment. Which would be by the indentified mismanagement team which would be the chief officer for health, ministry for health senior staff and the environmental health management that have all failed their duties. And could be a high possibility still failing their duties well contented abusing the system in their own way and still have their jobs.

  2. Anonymous says:

    The buck stops with the minister. He needs to resign. He’s clearly not up to the job. Just listen to him, for goodness’ sake!

  3. Anonymous says:

    The public should recall that a CEO of the Cayman Islands Airports Authority was suspended and later dismissed (by the Board of Directors) for similar actions of gross mismanagement and unjustified expenditure of public funds. However, this Government, through a new Board, re-hired him to the same organization after he was cleared in a criminal investigation!!

    So, why do mismanagement and waste of public funds count in this case but didn’t matter at the Airport?

  4. Anonymous says:

    800 percent doesn’t reflect abuse, it reflects extremely poor initial budgeting skills.

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  5. Anonymous says:

    So did the staff members come up with this on their own? Or was management giving them a nod and a wink to charge up some overtime? Or were certain highly placed “members” arranging for members of their personal networks to get dump jobs and asking management to go easy on them and turn a blind eye…?

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  6. Anonymous says:

    another glorious day for the civil service!

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  7. Anonymous says:

    I live in Savannah and during the past few weeks the garbage was sometimes collected between 4am – 5am in the morning when it is still dark. Very unusual.

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  8. Anonymous says:

    “Ultimately, the director of DEH had the responsibility of managing the approved budget, avoiding cost overruns and escalating concerns to the ministry, all of which he substantially failed to do,” the audit stated.

    Scapegoat or was he just that dam bad???

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    • Anonymous says:

      Scapegoat. I suspect he saw what was happening, tried to stop it and trod on too many influential peoples’ toes. Why else would CIG pay him off with a non-disclosure deal?

  9. Anonymous says:

    Very strange that Mr. Miller, Mr. Mclean and their colleagues have not commented on this. Or maybe they are turning a blind eye as it does not mesh with their agenda

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    • Anonymous says:

      2:28
      Perhaps their agenda includes everything that is ongoing across the board? Eyes are opening and actions are being taken. It appears one after another, exposure is taking place.

  10. Anonymous says:

    No man, not Driftwood…Anybody and Everybody besides poor little Driftwood…

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  11. Anonymous says:

    Key points, something serious happend. Chief Officer acted quickly, stopped the bleeding. Called in internal audit. Put in a new leadership team. Held staff accountable. Put procedures in place to ensure problem is not repeated. Released info to the public. A text book response to a major problem.

    I am satisfied.

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  12. Anonymous says:

    Now let’s make the *economicis geniuses* in the LA, handle our Healthcare as well!

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  13. Anonymous says:

    I’m on a gravy train with whiskey wheels!

  14. Anonymous says:

    ‘Vehicle downtime’ or in plain English a combination of the ‘couldn’t care less’ attitude of staff towards basic vehicle maintenance like checking the oil and water every week coupled with convenient breakages when they wanted a few days off.

    I’ve run a vehicle fleet in the UK and it doesn’t take a genius to see what’s been going on at DEH over the past few years. Because their wages are guaranteed, staff figured out if the equipment they needed to do a job broke they could sit on their backsides doing nothing while it was fixed then pick up overtime during the catch up – I’ve been there, seen it and sacked the idle buggers who were trying to pull stunts like this. In fact on two occasions where the damage was deliberate I’ve had the drivers involved charged with criminal damage. It’s all about having the one thing DEH and many (most?) other government departments lack – management with the balls to roll up their sleeves and get stuck in when their staff are clearly taking the p*** out of the system.

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    • Anonymous says:

      ‘Buggers’. How very British. What…what….tally-ho ginger. And all true. Why burst your a*se when you’re guaranteed to get paid? Nepotism is alive and well here in paradise.

      • Anonymous says:

        7:29 And that’s exactly why we shouldn’t trust Caymanians to run any public sector operation on these islands without completely independent oversight. It’s like letting kids loose in a candy store.

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        • Anonymous says:

          Oh please! Its our money! Its our country! Its our people! Not all are a failure! We should have full say over the same.

  15. Anonymous says:

    What I don’t understand is if trucks are under repair and there are workers not showing up, then one would assume that overtime would increase (may not be to the tune of 800% but it would), in order to stay on top of the garbage collection. Just my thoughts.

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  16. Anonymous says:

    Are any of the employees who supposedly presented fraudulent claims being prosecuted?

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  17. Anonymous says:

    Caymankind

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  18. Anonymous says:

    sounds like our fearless leaders are making a’ dog’s breakfast’ of everything they put their hands to do.

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    • Anonymous says:

      CNS i am curious about your statement ” finally released” then you said the audit were completed last month. Given that we are only in the 3rd day of October. I think the two sentences conflict.

      I know we expect alot from our civil service but i have to say Its kinda hard to release an audit before you have it.

      CNS Note: The audit was conducted in three phases the first was finished in March and the second in July.

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  19. Anonymous says:

    So we now know why Mr Carter disappeared. What I don’t understand is why he was the sole scapegoat? He had accountants below him who should have been monitoring overtime. He had accountants above him who should have been monitoring overtime and Mrs Ahearn in charge of it all. Why didn’t more heads roll on this? Are the people who abused the overtime still there? It reminds me of the HSA overtime scandal; same accountants and same Chief Officer.

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    • Anonymous says:

      Too busy organizing the DG 5k instead of managing it seems. Good management is putting in place checks and balances to ensure that one is on top of the issues before they become so big they cause embarrassment. Who and why is she being so obviously protected. Instead it seems the MO is to blame those below, without giving them the support they need with resources so they wont fail.

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    • Caymanite says:

      What about Roydell’s foreigh deputy who was just allowed to leave the island. What part of this was his responsibility?

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  20. Anonymous says:

    Speaking of abuse. No tippage fees paid from hurricane Ivan until the present

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    • Anonymous says:

      Speaking of stupidity. Tippage fees. Here are some thoughts on the subject.

      1. There are currently no garbage fees paid by home owners for DEH to come to their house to pickup garbage, but you think it’s a good idea to charge someone $25 to take their garbage to DEH?

      2. For every $25 collected, we would have to pay $50 to $100 to have people collect and account for, and ensure that the $25 doesn’t go missing.

      3. Construction and garden service companies would go back to dumping their scrap on dyke roads and vacant lots to avoid the $25 fee, so DEH would then have to spend about $250 to clean it up afterwards.

      I’m no advocate of free services, but in this instance it gets the garbage to the location where we want it. I would go as far as providing large dumpsters for tipping throughout the island.

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  21. Anonymous says:

    Years ago these audits would never have seen the light of day. Thank you CIG for being open and transparent. What is missing is the key point that the chief officer called in internal audit. In the private sector something like this would have been covered up.

    I also read that overtime has been reduced by 80% which is a tremendous achivement.

    Both the director and the assistant director are no longer with the Department. Shows accountability. Again would never have happend years ago.

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    • Anonymous says:

      In the private sector this level of abuse would never have been tolerated. When you’re paying out of your pocket you tend to sort these types of things out quickly. When it’s someone else’s money nobody seems to care

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    • Anonymous says:

      hhaaha – are we talking degrees here?

      “Thank you CIG for being open and transparent.” did you miss the part in the article about redacted docs?

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  22. Anonymous says:

    Don’t worry this is the same CIG we should trust to negotiate and oversee a good deal on cruise berthing facilities
    Don’t even have their house in order but talking about transparent, accountable government

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