Ministries still failing to report on cash collected

| 26/07/2021 | 39 Comments
Financial Secretary Ken Jefferson (right) seated next to Accountant General Matthew Tibbetts

(CNS): Two of government’s most senior accountants, Financial Secretary Ken Jefferson and Accountant General Matthew Tibbetts, told Finance Committee Tuesday that work is underway to get each ministry to properly report on the coercive revenue they collect on their own books. Currently, funds that government entities collect from members of the public and businesses appear only in the Entire Public Sector consolidated accounts, and because government failed to produce this overarching ledger for many years, the public has been left in the dark about the details of how cash is actually collected.

While the funds that public authorities receive from government to run their departments is recorded, how they collect cash that is fed into the public coffers and redistributed via the budget is not. In short, how much money government gets from the public is not being reported back to the people in an accessible or timely fashion.

Appearing before the Public Accounts Committee, Tibbetts detailed the efforts being made to get the ministries to report this information, but he said it was a work in progress. When, or even if, this happens, as there is still some debate among government accountants, it will lead to public authorities facing qualified or even adverse audits on their annual accounts.

Speaking at the PAC hearing on Tuesday, when the new members met for the first time under the new administration, Tibbetts answered questions about progress on implementing past recommendations made by the auditor general as well as those detailed in her latest report, “Improving Financial Accountability and Transparency: Financial Management and Reporting“.

Government continues to address a catalogue of issues relating to the overall reporting of how it collects and spends money that already present major problems for the public finances. These include how the future healthcare liability for civil servants (estimated to be around CI$205 billion) should be accounted for, and keeping up with the valuation of the government’s built capital assets and the roads network.

But the issue of making the accounts more transparent and accessible to the public is another ongoing challenge.

The need for ministries to report the details of revenue collection is seen as an important factor in relaying core information to the public about the fees they pay. It is not just the Ministry of Finance that collects money from taxpayers, and the auditor general has advised government to stop the current distinction in accounting between the executive (outgoing payments from government) and entity (what each ministry collects through their various departments).

While ministries get money in the budget to run their departments, they take in money of their own that goes back into the Treasury. Fees are collected by civil servants from the public for myriad services and departments, from the sale of plants at the Department of Agriculture to vehicle licensing. However, the ministries do not reveal the details of what they collect.

The first time that this revenue appears and the public is able to see it is when the government accounts are consolidated by the finance ministry, which publishes the EPS accounts. So far, of the completed EPS accounts that governments have managed to produce over the last fifteen years, successive auditors have raised concerns about the management of that coercive revenue.

Tibbetts said that merging the entity and executive books will see ministries getting qualified opinions again, but until they do begin doing this, the EPS will never get a clean opinion. He explained that chief financial officers across government are aware of the need to begin this merging and it is something the government is working on.

In the report, Auditor General Sue Winspear pointed out that the entire public sector spent $979 million in 2019 on delivering goods and services and maintaining government’s estate, and generated revenues of $1,136 million of which $796 million was coercive revenue collected by core government.

“It is essential therefore that there is strong financial management and transparent reporting on the financial performance and position of the public sector and what it is delivering for these monies,” she wrote but noted that it is “only through the consolidated EPS financial statements that the Government can be held accountable for significant items such as coercive revenues, transfer payments, including social welfare payments and grants, support to voluntary bodies (non-governmental entities), debt and financing expenses.”

She said the quality of these financial statements has improved slightly over the years, from a disclaimed to an adverse audit opinion in 2012–13.

“However, much needs to be done to improve the EPS financial statements to move to a qualified and ultimately unqualified audit opinion. I acknowledge that this is not easy and many Governments across the world have their EPS financial statements qualified for a number of years after they are introduced. That said, it is not impossible and I strongly encourage the Ministry of Finance and Economic Development to develop a roadmap.”

This first PAC was chaired by the former minister of finance, Roy McTaggart. Given the conflict for the now opposition leader, he stated at the outset that while he would chair the meeting, he would not ask any questions during the witness hearings.

See the report in the CNS Library.

See the PAC meeting on CIGTV below:


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Category: Government Finance, Government oversight, Politics

Comments (39)

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  1. Chartered Caymanian Accountant says:

    The money hasn’t ‘gone missing’ or ‘disappeared.’ What the Auditor General is saying is that revenue is not appearing in the annual accounts of the Ministry in which it was collected. E.g. Education Department collects school fees therefore this revenue should feature in the Ministry of Educations annual accounts. Which, of course, increases public visibility etc. The only time we get to see this is when all the various Ministry accounts are consolidated into one which may not give the level of transparency and is produced, I assume, later than the individual Ministry accounts. Yes, it’s ‘bad accounting’ which needs to be fixed but no money/ revenue has gone missing.

    Hope this helps

  2. Anonymous says:

    Simple, you hold back the funds for these ministries/departments until they provide the required reports!

  3. Neverwannabeacivilservant says:

    They don’t want to explain how much they collect as they can’t explain where it went to.

  4. Anonymous says:

    Tibbetts and Jefferson working in one of the most backward ministries. So far behind with technology and mistake after mistake – but never held to account.

  5. Anonymous says:

    No big deal (to a majority who don’t recognize corruption or the potential for it)! I used to work at an SAGC which, under a particular CEO, was selling used public assets (material and equipment) to Tom, Dick & Harry without any inventory controls, write-off process, bidding process or records of where the proceeds of selling Government property were going.

    CEO and his ‘clique’ couldn’t see anything wrong with that!!

    • Anonymous says:

      Not everyone is in the know of SAGC. Please decipher
      Thanks

      • Anonymous says:

        Statutory Authorities and Gov’t Companies.

        Like Cayman Airways, Turtle Farm, and the other black holes for taxpayers…

  6. Justin Thyme says:

    Gee! Will you please commit on that, Mr. Premier?

  7. Anonymous says:

    Could be time for the uk to step in again and approve contracts. Clearly when money goes missing in the millions it is not a world class service and likely corruption. Nothing new though and shouldn’t be difficult to maintain and regularly audit a public purse from a territory with only 70,000 people. Shocking.

    • Cleva Jackson says:

      70,000 people and yet 96,000 have been vaccinated. I don’t understand, can someone explain please.

  8. Anonymous says:

    Keeping in mind that this is NOT a new thing..
    How many of those “honorable” titles need to be removed??? Because that is NOT what most consider honorable.
    Honorable means that you do the right thing. At all times.
    Here’s a few descriptive words to consider from an online dictionary;
    Possessing and characterized by honor, Consistent with honor or good name.
    Decent, ethical, honest, just, noble, principled, respectable, righteous, stand-up, upright, upstanding…
    In case you are wondering.

  9. Anonymous says:

    Senior civil servants too busy running their own businesses to care.

  10. Anonymous says:

    CIG Civil Service, a cesspit of incompetence.

  11. Anonymous says:

    Of course they don’t.

  12. Anonymous says:

    I have an idea, whoever is not doing their job should be fired!

  13. No. 2 says:

    So we still can’t detail how 3/4 of a BILLION dollars is collected.

    Nice, Dr. Evil would be impressed.

  14. Anonymous says:

    Imagine shareholder meeting reaction to any business that didn’t bother to factor cost of goods, or offset to revenue in trying to figure out how well it’s doing, or what money it needs? Or that there is no career consequence, or cost of any kind to them, for being inept at basic bookkeeping for decades!?! …and that’s with in-house full-time full-salaried and benfited career bookkeepers. Insane.

    • Anonymous says:

      Being back Ezzard Miller , he’ll get our honorable career bookkeeper minister to do his job.

      • Anonymous says:

        In all his years, Ezzard achieved nothing. Ask yourself why.

        • Anonymous says:

          “In all his years, Ezzard achieved nothing”
          NOT FOR LACK OF TRYING!!!

          You can ask all you want but if they don’t answer, what are you meant to do? Spank, remove privilege’s, dock pay, dock money allowed the following year, name and shame, beg, plead etc. You see where this goes? NOWHERE.

        • Truth says:

          He ran under the anti-corruption banner and lost the vote. Ask yourself why?

    • Just saying says:

      I frequently wrestle with why they are bad at literally everything. Is it just incompetrnce or is it cunning and indemic corruption and crime. The more of it I see the more I think the latter because it’s virtually impossible to be so bloody incompetent. And a HUGE portion of this sits at the UK Govt and Governors door. He sits there like some pathetic excuse for a diplomat with about as much stick as a poo twig. He needs to get a grip of the pigs at the trough because the reflection is on the UK.

      • Anonymous says:

        Is it the same in the UK?

      • Say it like it is. says:

        Just saying – I agree with your first comment, but for the hundredth time I must point out the Governor’s mandate specifically excludes any interference with internal affairs. You can’t have it both ways, blame your own!.

      • Anonymous says:

        responsibility for the Civil Service lies with the Deputy Governor

  15. Anonymous says:

    It is f’ing ridiculous that millions of dollars we pay in cash to government for many services for which electronic payments are not accepted simply disappears from the public purse. Why are heads not rolling???

  16. Anonymous says:

    #worldclass

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