COVID-19 costs obscured in budget reshuffle

| 30/10/2020 | 15 Comments

(CNS): Government has appropriated an additional CI$100 million in expenditure across various ministries as a result of the COVID-19 pandemic. But the actual expenditure has been blurred in the re-budgeting of line items presented to Finance Committee this week, with government lumping COVID-19 related spending with other expenditure, using unspent allocated coronavirus cash on other things and recovering some costs.

In one of the government’s most confusing supplementary appropriation Finance Committee meetings to date, members of the Legislative Assembly voted on dozens of changes to the 2020 budget line items, which included many related to the pandemic.

However, despite spending, setting aside or expecting to spend around CI$101 million, Financial Secretary Kenneth Jefferson told the committee on Thursday that this was not necessarily what the pandemic has actually cost the public purse so far.

Illustrating what he meant, Jefferson said that while the Ministry of Finance and Economic Development had paid out over CI$2 million on British Airways flights (an issue that had raised significant concern among commenters here on CNS), the reality was that the flights ultimately broke even because government recouped just under $3 million. He pointed out that the original expenditure of over $4 million on COVID-19 PCR test kits from South Korea shrank to a mere $300,000 when the sale of several thousand kits to other countries and NGOs was taken into account, as well as the donation from local philanthropist Susan Olde.

In other cases, COVID-19 related spending has been allocated but not yet spent. Over CI$9 million was appropriated by the Ministry of Tourism for payment over the next three months to workers in the sector who are furloughed or jobless as a result of the collapse of the industry. That was just one of a dozen budget reshuffles for that ministry which resulted in net additional spending of more than $30 million over the original budget.

Some money that was requisitioned under the label of COVID was actually spent on other things. CI$2 million in the community affairs budget that was set aside for temporary assistance to work permit holders stranded here when the borders were locked down turned out to be far more than was needed.

Government spent less than $900,000 on helping expatriate workers before they were able to leave, and the remaining cash was used by the ministry for work on a seniors centre and other support for the elderly. But this spending was in addition to another $3 million in the same ministry that was spent on social assistance to local people in need over and above the previously budgeted amounts.

An equity investment into the Health Services Authority of over CI$9.2 million was to cover the cost of some COVID related expenses that have already been incurred and some that are expected, but it also included other health expenditure unrelated to the pandemic.

In the Ministry of Commerce, Planning and Infrastructure, another CI$9.5 million was approved in additional spending to cover the grants to small and micro businesses hit by the economic fallout from lockdown and the closed tourism sector.

Appropriations for the education ministry covered some indirect COVID-19 spending, such as internet upgrades and the purchase of laptops for students, which were areas of significant weakness exposed when school learning was forced online under lockdown. It also included help for farmers. But with the most appropriations of any ministry, the reshuffling of cash across the departments resulted in additional net spending of more than CI$27 million, a significant chunk of which is to fund the John Gray High School project.

The bulk of the COVID spending was appropriated by the Ministry of Finance and Economic Development for other ministries in a $40 million line item covering everything, from test kits to the cost of quarantine. It also appropriated CI$4.6 million to cover the fees for the line of credit secured by the ministry to cover what is expected to be a difficult year for government in 2021.

That ministry was the only one that did not require any non-COVID related additional spending appropriations of its own.

See the Supplementary Appropriations Bill in the CNS Library

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Category: Government Finance, Politics

Comments (15)

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  1. Jg says:

    There is no next step, until these hard headed a$$holes learn to wash their hands and wipe their asses properly. The world will blame Alden and Trump but cant do their part.

  2. Anonymous says:

    How fantastic CNS that you use a cartoon of “cooking the books!” You and Charlie Hebdo know how to be spot on!!!
    This is all so sad that Government has padded up their employees in a downturn economy when private sector has been at a loss. Even in the last recession, the CI Government has gone on a spending spree like a drunken sailor. The new airport with its ugly, hard to cool and looking like a sphinx ugly type of construction. All the other white elephant projects of wasteful spending. What is to become of the Cayman Islands economy? Banks cannot continue to lend them money forever. What do they plan to retire debt with? It is all scary and sad.

  3. Anonymous says:

    You can’t lie about cash in the bank.

    Eventually the truth will out when it runs out…

  4. anon says:

    Shambolic. Once again they forgot to keep a record of all the cheques they wrote.

  5. Anonymous says:

    It’s called ‘creative accounting’. All public bodies (and most private sector entities) do it – what’s new?

  6. Anonymous says:

    Only unclear because no one thought to ask in advance that the accounts (transfers, etc.) not be reported as normal. Simple solution is for the LA to ask the Government to have the FinSec prepare such a report if that’s what people really want to know. (And I can understand why we think we do.) Just remember it will then be in excruciating detail, like the annual budget, which I admit I never read when they publish it before Finance Committee each year.

  7. Anonymous says:

    Clearly, these guys couldnt balance a personal cheque book. We have made a grave mistake allowing them to handle our money all these years. They all need to be fired. IMMEDIATELY.

  8. Anonymous says:

    Pigs at the trough – if the spending was legit they would have no issue with transparency.

  9. Anonymous says:

    FATF look no further. CIG world’s greatest money launderers

  10. Anonymous says:

    we need an audit into civil service performance and expenditure during covid….

  11. Anonymous says:

    Government has appropriated …But the actual expenditure has been blurred…lumping..the…most confusing…this was not necessarily what …actually cost the public purse…spent on other things…over and above the previously budgeted amounts…dozen budget reshuffles…reshuffling of cash across the departments…resulted in additional net spending of more than CI$27 million….

    ANYONE’S HEAD IS SPINNING? Enron creative accounting fades in comparison to CIG accounting practices.

  12. Anonymous says:

    How creative!

    • Anonymous says:

      And not one word about how they could be saving money. You have 400+ CAL employees on full pay doing what? They’re running maybe 10 flights a month and it takes 400 employees… US airlines are laying off thousands of employees or the employees are taking pay cuts. And furloughs. When is the bloated public sector going to start carrying its fair share of the economic slowdown? Does anyone really think Jon-Jon or Ju-Ju actually understand the creative accounting going on here, my guess they look around on the assembly voting and raise their hand to look like they fully understand the vote. This might be the biggest shame of all.

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