Secret pay-offs qualify premier’s audits

| 13/06/2019 | 41 Comments

Cayman News Service(CNS): The auditor general has said government’s failure to reveal details of pay-offs made to departing civil servants has led to it falling foul of international accounting standards and to qualified audits for the financial period ending December 2017 in two of the premier’s ministries. In the Office of the Auditor General’s latest review of the state of public finance accounting, this issue is one of a number of areas still creating problems with government’s books. Nevertheless, despite ongoing problems, Sue Winspear found the state of reporting on how public cash is spent has improved massively in the last few years.

The revelations in the report that Premier Alden McLaughlin’s human resources and community affairs ministries paid off senior officers, understood to be Dorine Whittaker and Linda Evans, and kept the amounts secret follows a finding by Ombudsman Sandy Hermiston, in her latest decision following an unsuccessful FOI request, that the pay-off to Roydell Carter could remain secret.

But Hermiston had also noted that using non-disclosure deals to avoid public accountability was wrong, especially when it is used to avoid embarrassment or controversy.

Winspear has said that it is also at odds with government’s obligations on transparent accounting and resulted in qualified opinions for two of the premier’s ministerial areas of responsibility. She stated in the audit that the two ministries had “material termination benefits included in their expenses… but opted not to disclose these amounts… as required” by international standards.

The qualifications for the community affairs and human resources ministry accounts under the control of McLaughlin were two of four ministries where the auditor was obliged to qualify the opinion.

The other two qualifications were on financial reports from the Cayman National Cultural Foundation and the Health Services Authority, both the responsibility of Health Minister Dwayne Seymour. The CNCF faced a qualified opinion regarding a personal injury award it was forced to pay, which has created a contingent liability and its ongoing undisclosed liability to pay more going forward.

A number of problems remain at the HSA that led to its qualified audit. The fundamental problem, however, is the inability of the authority to confirm control of its revenue and deficit. Winspear also raised concerns that the hospital was one of a number of government entities that is short-staffed and is therefore shelling out excessive overtime payments.

Over the 18-month period from July 2016 through December 2017 the hospital spent almost $6 million in overtime, exceeding its budget allocation by more than 500%. The audit also revealed that the hospital, despite all that happened with the CarePay fiasco, is still not properly following procurement rules.

The auditor highlighted several issues in the report but she did commend government for the significant improvements. However, she expressed concerns over how long it was taking for annual reports to be laid on the table, making the documents public, which she said was an important final step for transparency.

She said it was “disappointing that many of these insightful reports have not yet been laid in the Legislative Assembly so that people can see what was achieved during the period with public funds and this is a key recommendation I am making for improving accountability and transparency going forward”.

The issue of governance and internal controls as well as close scrutiny of overtime and travel expenditures are some of the other matters the auditor remains concerned about. She also noted the need for government to put in place stronger functional leadership.

The OAG has completed 39 financial audits; five entities had still not finished the financial reporting process for 2017 in time for this report, though it is not clear why. Those entities were the health and education ministries, Cayman Airways, the Port Authority and the Cayman Turtle Centre.

Because of this, the Entire Public Sector report has been delayed and will now be published at a later date. However, Winspear stated that a decision was made to release this report in the public interest, despite the missing five audits.

See the full report in the CNS Library

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Category: Local News

Comments (41)

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  1. Anonymous says:

    Yep. Still third world.

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    • Anonymous says:

      If only you lived in the Third World

      Would not have time to say it as much as you do

      LOL!

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      • Anonymous says:

        I live here. And I used to live many other places that were not third world. So I have my own experience in this. But this is only my opinion. Not yours.

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  2. Anonymous says:

    y’all should spend some time thinking about Alden successor!

  3. Anonymous says:

    Is it any wonder with practices such as this that other countries want to blacklist us? If the government refuses to reveal public spending and go against international standards what is that saying?

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    • Anonymous says:

      One question, is it the people money or the politicians money. Its the people’s, so they have the right to know.

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  4. Anonymous says:

    Yet, Norene Thompson was put through the wringer before government settles out of court in immunity clause case.

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  5. Anonymous says:

    Government ministers and senior civil servants – as individuals, not as employees of the people (as we’d end up paying twice) – need to be subject to the Fines & Penalties regime….they keep forcing this “stuff” on the (international) business community, but NEVER apply the same rigour to themselves….”do as I say, not as “we” do…”.

    This is the people’s money they are (mis)spending freely, not “theirs”, not the “governments”. But OURS.

    Allow Light and Air into the Septic Tank!

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  6. Anonymous says:

    7:58 am…the people believe it is their money and get angry…i know and have seen how angry they get when they learn of a pay out!!!

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  7. Ron Ebanks says:

    12:29am , if it is Franz fault and Alden is taking the blame , then what kind of Leader that makes Alden?

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  8. Ron Ebanks says:

    3:34 pm you said a mouth full there , that Alden is loosing respect for everything and almost everyone and needs a wake up call .

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  9. Ron Ebanks says:

    7:51am , why would you be shunned and be a target for accepting what is supposed to be rightfully your ? If it was legally earned ?

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  10. Anonymous says:

    The rubbish minister front and center again.

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  11. Anonymous says:

    if it is revealed…these persons will become a target and shunned…i agree with premier and government not to reveal amounts…if i got a payout, i wouldnt want govt to reveal…as …..

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    • Naya Boy says:

      Mann where did you get that one Alden? From the Godfather sounds like a CON Spiracy to me Alden, when since did your government care about people being shunned or targeted This unity government has thrived on those tactics infact it appears to be its motto or mission statement.

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  12. Anonymous says:

    anywhere else in the world…this would be a resignation matter for alden….
    but in caynan…its just another day in wonderland….

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  13. Anonymous says:

    I would love someone to actually be accountable for the treatment of Linda Evans. If the public’s money had to be used to cover for someone’s mistreatment of her, we should at least know who that person was, and what happened to them!

    I do not know what happened to Evans, but there is a real risk that people who do their jobs (which may include standing up to their bosses) simply get thrown under the bus and the public gets the bill.

    We need to know that that is not what is happening, and that the people who incur the liability are not simply promoted.

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  14. Ron Ebanks says:

    Not disclosing these handsome payouts , couldn’t that be one way of buying loyal doaners and supporters ?

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  15. Anonymous says:

    It’s hush money…they’re all just covering each others nefarious dealings.

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  16. Anonymous says:

    Kiss mi neck back!

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  17. Anonymous says:

    The Deputy Gov is the one responsible for the Civil Service. Maybe the Auditor General should have gone to him for the relevant information. Doesn’t she and the DG both report to the Governor?

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    • Sue Winspear, Auditor General says:

      In conducting our audits we only work through officials from the DG down and not the politicians. As the Ombudsman said recently, there were non disclosure agreements in place (despite this being contrary to the requirements of PFML) and so it was determined by the Civil Service that it was better to get an audit qualification for each Ministry rather than break the non disclosure agreements which would make them vulnerable to potential legal action. I hope now the position is clarified we will not face similar issues in future years.

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  18. Anonymous says:

    Alden seems to increasingly believe that he can do whatever he wants, with no accountability. This shambles, starting to deny the constitution over the referendum and finding all kind of illegal ways to block that…where is the Attorney General? Where is the Governor on these matters? I think we now understand why certain legislation on accountability is not being put through…

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    • Boris says:

      The Governor is presently in the UK consulting with his Employer on these issues. Let us hope his findings are fully and honestly reported. Time will tell.

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  19. Anonymous says:

    CNS should have quoted the AG when she said that the two Ministers who had qualified opinions in 2017 have clean opinions in 2018. And in 2018 there were more clean opinions that ever before. Sounds like world class to me.

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    • Say it like it is says:

      3.27pm. A qualified opinion should never happen with Government accounts, do you have any idea what that means?. I am afraid when it comes to civil servants, ignorance is truly bliss.

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    • Leslie Gibbons says:

      NOTHING in the Cayman Islands Government is “world class”.

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    • Anonymous says:

      3:37pm – just FYI on auditing terms :”A qualified opinion is a statement issued after an audit is completed by a professional auditor, suggesting that the information provided is limited in scope and/or the company being audited has not maintained GAAP accounting principles”. This is not the best result.

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  20. Ron Ebanks says:

    I guess since it is wrong for Alden to make these pay out secret, it should be fair for the public to speculate on the reasons why he is doing these secret pay out and not disclosing the amounts .

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  21. Say it like it is says:

    Shambolic, and they call it a world class Civil Service!. A more appropriate description would be the Cover Up Service. If the Auditor General characterizes these payoffs as material they must have been in layman’s terms, obscene. On top of all this are the numerous law suits filed against Government which have been settled at significant cost to the taxpayer but again kept under wraps.

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  22. SMH says:

    The Premier believes he and his portfolios are above the law and international best practices. Typical Alden being Alden thankfully he is now a lame duck Premier. SMH

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