OAG stands by report on Dubai and o’seas office failings

| 04/05/2022 | 111 Comments
Cayman News Service
Then Premier Alden McLaughlin and his chief officer, Eric Bush, in London in November 2020

(CNS): Deputy Governor Franz Manderson has found no breach of the Public Management and Finance Act (PMFA) following an investigation into a report by the Office of the Auditor General (OAG). But Sue Winspear told CNS she stands by the special audit she was asked to conduct on how the former administration and civil servants entered into deals and contracts relating to overseas offices and Cayman’s attendance at the Dubai Expo.

Winspear found examples of poor governance and administrative failings that amounted to breaches of the law, saved in the end only by a change in government and under-spending at the ministry.

In a statement released Tuesday evening, Manderson said he had concluded his internal investigation into the findings of the report, “The Dubai Expo and CI Overseas Offices – Examination of Potential Breaches of Legislation“, which focussed on what had happened immediately before and after the 2021 elections.

He said that the most serious finding by the OAG was that the Ministry of International Trade, Investment, Aviation and Maritime Affairs breached section 12 of the PMFA and the Constitution by spending funds that were not appropriated by Parliament.

Manderson determined during his investigation, based on financial reports available now that were not available to the OAG at the time, that sufficient funds were available to meet the costs associated with the Dubai World Expo and the opening of the overseas offices, so there was no breach of the law.

But Winspear’s special audit was a technical and nuanced report which found there were breaches of the Cayman Islands Constitution, the PMFA and the Public Service Management Act (PSMA), as well as irregularities around some of the human resource practices. She also found that clear guidance was lacking on how the civil service should implement government policies after an election had been called.

In the release Winspear accepted the specific point highlighted by the DG that technically there was no breach of PMFA as the funds requested for 2021 were not actually needed after all. However, she explained that things were more complicated than that. Funds had been requested at a time when the civil servants did not know there would be enough in the budget at the end of the year, otherwise they would not have made the request to Cabinet for the money.

“After the election, activities relating to the new overseas offices and Dubai World Expo were scaled back as a consequence of the different priorities of the new government, and so the actual costs were able to be funded from within the existing 2021 budget for that ministry,” she said, pointing to the under-spending because of that policy change.

“I prefaced my report by stating that I presumed the funds requested and agreed by Cabinet in January 2021 were both necessary and requested in good faith. The commitment to the additional staffing costs of course continues beyond 2021,” she said.

Winspear said that the ministry still committed the next government to spend money which they did not at the time know they would be able to meet.

The report stirred up considerable controversy, not least because it was leaked to CNS after several failed attempts to secure the document through official channels. Much was made of the leak by the deputy governor, Governor Martyn Roper and the PPM.

The DG said that the report raised material issues about the conduct of the civil service, and as such, it should have been treated with the highest level of confidentiality in order to allow the entire review process to conclude fairly. But the report itself made no mention of specific individuals and focused on the breaches, irregularities and poor governance in general.

It was when the DG’s office was given the report and an internal investigation was initiated that the focus switched to specific staff members at the ministry, in particular the Chief Officer Eric Bush, who oversaw all of the financial requests as well as the recruitment processes questioned by the auditors.

Winspear noted that she was asked to examine the facts, the chain of events and what took place. She had made no allegations against any specifically named individuals.

“I trade in facts,” Winspear told CNS, as she stated that she stood by the findings in her report. There have been calls on social media recently for an independent review of what happened by an outside entity, and the auditor general said she would welcome such a review because she was confident that her report was accurate, factual and would withstand scrutiny.

However, it is clear from the release issued by the DG on Tuesday that there will be no further action in relation to most of the issues raised, which have not been addressed.

Governor Roper, who had asked the auditor to take a look in the first place, said in the release that the deputy governor had “fully investigated” all the issues arising from the report and that his “investigation has been carried out comprehensively and objectively in the interests of fairness to all concerned”.

He added, “It is unfortunate that the press commentary after the leaking of the OAG report, and before the Deputy Governor’s full investigation was complete, led to inaccurate and skewed views being aired in public. Notwithstanding the findings of the Deputy Governor’s investigation, I am grateful to the OAG and Deputy Governor for ensuring that going forward the jurisdiction has learnt important lessons for the future.”

The main lesson that appears to have been learned is the need for clearer policies and practices relating to the role of civil servants and their ministers in the run-up to an election.

“As a consequence of this OAG report, we have now developed a formal policy entitled, ‘Period of Election Sensitivity’,” Manderson said. “Once approved by Cabinet, this guidance will provide clear information on how civil servants and ministers should conduct government business once an election has been called.”

Most of the issues that came to light in Winspear’s report were largely as a result of the election not going in the PPM’s favour. Given the findings, it is not surprising that the opposition has joined the chorus in condemning the leak. But were it not for a change in government, the audit office would not have found the irregularities.

In a statement about the deputy governor’s finding, Opposition Leader Roy McTaggart, who chairs the Public Accounts Committee, described Winspear’s report as inaccurate. McTaggart said she was incorrect in her findings and “wrongly concluded” that there was a spending breach.

Nevertheless, most of Winspear’s findings have remained unchallenged.

She told CNS that claims by the former administration that the circumstances surrounding the request for money for the overseas offices were exceptional were undermined by the statement by the opposition leader. McTaggart stated that the offices and the Dubai Expo were in the works for many months, so it is evident that they did not meet the criteria of exceptional circumstances required for the request to Cabinet for the funding.

Preoccupied by the leak rather than the questions raised by the auditor general about the chain of events and the failure to follow proper procedures as identified in the report, McTaggart said the exposure of the report caused “shameful repercussions”. He has also asked the deputy governor to complete an inquiry into how the document was leaked and who leaked it, and take appropriate action.

See the OAG report and press releases by the DG and the opposition in the CNS Library.


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Category: Government Finance, Government oversight, Politics

Comments (111)

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  1. Anonymous says:

    Cayman needs a Commission of Inquiry, similar to BVI just had. Not sure we’re suitable for direct rule, but there is need for matters to be looked into by the UK, if Cayman neglects to do so internally.

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  2. Unhappy Caymanian says:

    LOL This is great consistent governance.

    We don’t do cash in suitcases any more but we carry in doing everything else…..

    no problem

    no surprise.

    Third world.

    You get what you either vote for or turn a band eye to.

    So reassuringly normal for Cayman.

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  3. Anonymous says:

    Another example of UK failing to ensure good governance in the Cayman Islands.

    Like the BVI, the problem is the corrupt UK.

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    • Anonymous says:

      The UK are angels compared to the people of the lodge. I would welcome U.K. rule until they had it working properly. It couldn’t be worse than what we’ve had for the last 20 years or so.

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  4. Anonymous says:

    ..and just like that Eric comes out smelling like a rose again..Thanks Franz…for nothing..

    The Auditor General is no fool and she knows corruption when she sees it

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  5. Anonymous says:

    Sue Winspear is great at her job. She takes no nonsense and really is a protectorate of good governance.

    You wait and see – she will suddenly be pushed out and replaced by a lapdog, fully trained in turning a blind eye!!

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    • Anonymous says:

      Sandy Hermiston would make an excellent replacement. The present auditor general seems to take her role a little too seriously. She thinks it is important. Does Sandy want to come back? She could do nothing effectual and make an excellent tax free salary. She could even employ her buddies overseas at government expense, whether or not Caymanians were available.

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    • Anonymous says:

      Yup, like Roper

  6. Two Cents says:

    First, let me thank you CNS for your excellent reporting on this matter, and for the essential service that you provide to these islands in trying to keep us informed of what is going on. I shudder to think where we would be at without you. I urge everyone to consider adding CNS to their regular tithing – to whatever extent they can afford – as I have done. This matter provides a chilling example of what our leaders think of us and what they would willingly share with us – in both cases ‘very little’.
    When I first read the statement from the DG on Tuesday evening, it came across as a press release announcing what the civil service had found following the ‘leak’ of the 17-page report of November 2021 by the OAG. But it didn’t mention any ‘report’ from the DG. I read it again; surely in 6 months (Nov 2021 – April 2022), the DG and his World Class organisation had produced a World Class report for us to read, digest and solve all our mental gastroenteritis that the AOG’s report had caused.
    Clearly, I was wrong.
    Now bear in mind that according to the paragraph 6 of the ‘leaked’ OAG report, their “audit was solely limited to addressing the following ten objectives provided to me by the Deputy Governor”. Their report addressed them between August-October 2021 – 3months.
    And after 6 months, this is what the DG and Gov Roper thinks explains the findings of the OAG 17-page report – 3 pages of utter fluff? They focus on the findings re objective 2 and have response to the reporting on the other objectives that the OAG was given?
    As their vindication, they hang their hat on something that the OAG could not possibly have known in October 2021; the ministry involved didn’t actually need the money that they said they would need and Governor Roper’s Cabinet told them on 12 January 2021 they could go ahead and start spending. Really DG, really Gov!! And they don’t even have the manners and respect to acknowledge their advantage of hindsight.
    Let me put what went down in layman’s terms. The Cabinet gave the ministry a cheque knowing full well that they didn’t have money in the account to cover it (they would need to go to Finance Committee to effectively deposit the money into their account). The former Premier’s ego kept him from going to the LA and so no approval from Finance Committee could be obtained (no deposit made to cover the cheque). The Governor wasn’t sharp enough to point out to the former Premier and former Minister of Finance that they needed cancel/revoke the approval that they had given the ministry if they weren’t going back to Finance Committee (making a deposit to cover the cheque they had given the ministry). Through the intervention of the new government, the ministry ended up not needing to try to cash the cheque that the former Cabinet had given it.
    This folks is what the Governor, DG and former Minister of Finance are all clapping their hands and cheering about. Neither of them can say that when the Governor humoured the former Premier on 10 February and announced early elections, Cabinet revoked the approval that they had given the ministry a month earlier on 12 January even though there was no intention to go to Finance Committee (there would be no funds deposited to cover the cheque). The ministry was left with the now-worthless cheque; they just didn’t try to cash it.
    I won’t comment on the statement by the former Minister of Finance and now Leader of the Opposition. He has clearly put his foot in his own mouth up to the knee with his demonstrated ignorance of the PM&FL.
    In closing, let me highlight that according to information in the public domain, the Auditor general, Mrs. Sue Winspear, took up her initial appointment in July 2016 on a 3-year contract. She is still here, thank God, and so was seemingly given a renewal, presumably for a further 3 years. If correct, that would mean that her current contract is up in July 2022 – 2 months from now. In my opinion, she has been an exemplary public officer and has earned the respect and admiration of the people of these islands. I trust that she is willing to continue to serve as our Auditor General. If she is, I urge the Governor to retain her and to make an announcement to that effect a priority. I assure him that if she is not retained, I will make every effort to determine if she was willing to remain and was not offered another contract.

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  7. One, two, three, one, two, three says:

    1. Experienced furrener points out issues of poor governance, bias and/or corruption.
    2. CIG/Officials dismiss criticisms.
    3. Nothing changes.

    The pattern of administrative oversight again and again. Winspear is just the latest to have to learn how to do the Dugay Waltz.

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    • Anonymous says:

      The auditor General got it wrong in her report. I don’t understand why that is so hard to understand.

      I know the negative posters don’t want to accept that. I know the truth hurts sometimes. Suck it up and move on.

      The truth has come out.

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  8. Anonymous says:

    John John has also released his report on his investigation in to the matter. It states, “You not see nuttin'”

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  9. GoJoeB says:

    Can’t teach old third world dogs new tricks. The best you can do is try and keep them out of jail. If that is the best Cayman has then that’s the best that can be done unless the UK feels it needs to step in and give the Cayman Islands the Government it should have instead of what it deserves.

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  10. Anonymous says:

    The position of the DG was to take a revisionist perspective based on the outcome after policy changes and directives massively clawed back the costs CO Bush had committed the government to spending. But, and this is why the OAG is correct to stand by their report – CO Bush, at the time of making that set of decisions and commitments, did not do so with foreknowledge that government would scale back costs to avoid spending money that had not been appropriated.

    It’s absolute BS for the DG to basically go, “well the shot missed, so even though CO Bush fired the gun, no harm, no foul.”

    Time for the DG to retire, and we can only hope that this event has shown enough of CO Bush’s true character so as to preclude him from aspiring to be his successor.

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    • Anonymous says:

      Amen this right here captures everything!

      It speaks to the core of the events, intent, breach of constitution, hiring processes, nepotism and cover up by the governor plus deputy governor that only makes matters worse. This is what official corruption looks like when the system decides to protect itself rather than to do the right thing.

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    • Anonymous says:

      And WTF is the Governor supporting this? Has the FCO told him they can only afford one direct rule at a time?

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  11. Anonymous says:

    Eric Bush will be Franz Manderson’s successor whenever that day comes. Watch this space!

    Lodge has preordained it so.

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  12. WhaYaSay says:

    Teflon Eric

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  13. Anonymous says:

    I think the recruitment process for civil service on a whole need investigating and if internal controls are honest and forthcoming then some serious fines should follow. We are talking misrepresentation when a post is advertised as being vacant when someone is actually “acting” in said post. Also, when applicants go through the full interview(s) process and no one from the civil service bothers to send a feedback because someone is actually already holding the post (contract renewed). Similarly, when qualified applicants send their applications down the “rabbit hole” at CIMA’s jobs portal and not a courtesy of response from CIMA and then these positions are posted on WORC for work permit renewals. Authority imposing fines on private sector – start doing the same for the civil service!

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  14. Anonymous says:

    We are most definitely living in a time when intelligent people are being silenced so that stupid people won’t be offended.

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    • Anonymous says:

      Ain’t this the truth?

      Governor and Deputy Governor are deeply OFFENDED being exposed as they were.

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  15. Anonymous says:

    Asking for a friend. Has anyone looked into RCIPS finances/budget and how the commissioner is spending the money?

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  16. Slacker says:

    I bet Sue is getting on the Dan Dugay train when her contract comes up.

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  17. Anonymous says:

    There are two kinds of people in the world, those who think that the government is looking out for them and those that think.

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  18. Anonymous says:

    The lodge runs deep with this one

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  19. Anonymous says:

    Rule of law! No laws were broken! Try again Mr leak the OAG report and Mr leak the stipend list. I hope every single person on the tourism stipend list remembers PACT because one of their ministers is famous around here for leaking confidential documents.

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    • Anonymous says:

      Sinister attempt to get at the last government via Eric..PACT/UDP still moaning..?

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      • Anonymous says:

        Eric’s incompetence and wheeler dealer style will always lead to questionable decisions and investigations it’s in his nature

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        • Anonymous says:

          CCTV, License Plates, Dubai….anyone got any other success stories from Eric’s corner they want to share?

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      • Anonymous says:

        Sinister? All these offices were set up by Eric for him and Aldart to travel around the world. Eric hired his friends for roles they can’t do. Two of them may never get the visas to work in the various offices. Yet CIG is paying these people. Who dropped the ball there? Eric. But ZERO consequences for this cock up costing CIG hundreds of thousands of dollars.

        I don’t blame PACT, this is weeks before PACT was sworn in. PACT has showed us they hold people accountable.

        Head of the Civil Service? Not so much. World Class.

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        • Anonymous says:

          OK 6.53 let’s see PACT hold accountable the person who liberated government marl for his family’s benefit.

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  20. Anonymous says:

    All of you screaming lodge please be advised that Wayne and Chris are also members

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  21. Anonymous says:

    Ahoy DG. Easter Island calling. Our most block-headed Moai has gone missing. Please send him back asap.

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  22. Anonymous says:

    Cayman is a Land of many laws. But zero oversight.

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    • Anonymous says:

      In the release Winspear accepted the specific point highlighted by the DG that technically there was no breach of PMFA.

      End of story! Thank you DG and AG. You both did the right thing.

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      • Anonymous says:

        Auditor General right. Deputy Governor wrong.

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      • Anonymous says:

        You mean “OAG”.

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      • Anonymous says:

        The Auditor General was trying to save her face. There is no such thing as ‘technically’ there is no breach. Either there is a breach or there is none. That’s like a judge saying you were not technically speeding because the cops speed gun wasn’t working but you will be fined anyway.

        The AGs investigation was thorough and included advice from the Attorney General. That advice effectively said that Winspeare was wrong. Just because someone has a fancy title it does not mean you can’t be wrong. And she was wrong and should just accept it.

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      • Anonymous says:

        Roper and Manderson are implicated. Who does the Attorney General report to? How could Franz’s investigation be objective? It was a cover up.

        There was no objective investigation. The Attorney General is conflicted. Sue Winspear isn’t conflicted. She is being muzzled because Roper himself is guilty.

        Stinks to high heavens. Franz, you investigated yourself? Foolishness.

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      • Anonymous says:

        Its like saying I robbed the Bank, but when Police showed up I put the money Back so no offence done.

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    • Anonymous says:

      Wait. I stand by my report but admit that the most serious conclusion was technically not correct???

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    • Anonymous says:

      With laws and administrative protocols in place, they still feel the need to make the rules up as they go along, in order to realize a specific or desired outcome.

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  23. Anonymous says:

    Sue Winspear for Governor!

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    • Anonymous says:

      I want to record my thanks to our DG. He knows that doing the right thing will not always be popular.

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      • Anonymous says:

        The DG is the lord of double standards and bs excuses. He is Cayman’s best politician with zero shame that facilitates nepotism plus incompetence from his inner circle. The civil service is a mess on his watch.

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        • Anonymous says:

          04 @ 5:29 pm. – Just wait until the public finally retires Franz Manderson with OBE or even CMG, then he really enters politics for WB! What a s***** politician’s smile!

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        • Anonymous says:

          I said this years ago but you would not listen. Its all about him in the end and what you can do for him at the time

      • Anonymous says:

        The right thing in this case being sheltering his friend?

  24. Anonymous says:

    This is an absolute disgrace for a “world class” service

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  25. #CAYMANKIND says:

    This entire pig is slathered with lipstick.

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  26. Ambassador of Absurdistan says:

    Just Another Day in Absurdistan

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  27. Anonymous says:

    Cover up!

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  28. Anonymous says:

    Manderson’s legacy is confirmed with this sad chapter of abuse by his most trusted CO and the excuses.

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  29. Anonymous says:

    The FACT that in the end in 2022 the funds were not needed because of a change in the priority of a new Government does not change the FACT that at the time the actions were done in 2021 it was ILLEGAL I have lost all faith in the Deputy Governor and the Governor … but then, that’s Cayman for you… I’m sure if the CO was a Jamaican he would have been relieved of his position and sent back home immediately … Caymanians are NEVER wrong …

    This immigration status Sword of Damocles which is held over everyone’s head is inhumane and cruel treatment!

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    • RES IPSA LOQUITUR says:

      So let me get this right is it only MPs actions that matter when it comes to accountability in government?

      Governor and DG have embarrassed themselves with this bollocks!

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  30. Anonymous says:

    What else would you really expect DG Manderson to say? No way he could or would ever criticize anything the Sir Alden and his main man EB ever did. Only one who will suffer will be the Ms Winspear.

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  31. Anonymous says:

    Give um heck auditor…cayman oligarch’s….yur throne falling…go pact go…

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  32. Anonymous says:

    I don’t think that these findings come as a surprise to anyone.

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  33. Anonymous says:

    Stand firm Madam Auditor General! You have a proven track record of thoroughness, fairness and transparency. The public has had no reason to second guess your work.

    No so much Franz Manderson’s and worse, Eric Bush’s!! They both need to go.

    Your Excellency, the Civil Service can stand NO more “questionable” (being polite) incidents under this DG and retain any credibility!!

    Please, NO one in the senior echelons of the CS should ever utter the words “world class” again!

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    • Anonymous says:

      She can stand firm all she wants. Her contract is not going to be renewed. And nothing will change. In this case the Governor/Uk are complicit in that they really wanted Cayman participation and funding for Dubai- so the the only person that protects people like the auditor general is not only indifferent but PO. She is toast. For being honest and independent.

  34. Anonymous says:

    Franz will not get his lodge brothers in trouble. Franz is one of them and not one of us. He needs to go. His time was up long ago!!! Totally useless!

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  35. Anonymous says:

    and what did people expect from franz???
    his failure is now complete.
    any comment mr governor?

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  36. Anonymous says:

    Franz protecting his best mate Eric as usual.
    Disgraceful really.

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  37. Anonymous says:

    “Sue Winspear told CNS she stands by the special audit she was asked to conduct on how the former administration and civil servants entered into deals and contracts relating to overseas offices and Cayman’s attendance at the Dubai Expo.”

    Try put that in your pipe and smoke it DG 🤣

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  38. Anonymous says:

    Time to start packing Governor Roper you dropped the ball

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  39. Anonymous says:

    Thank you Auditor General for standing your ground and dealing with the facts.

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  40. Anonymous says:

    The saddest part of this is grasping just how many people are still out there acting in concert to pave over transgressions, and the lengths they will go to insulate each other. With tenured high level civil servants authoring and approving these fact revisions, we are years away from the prospect of good transparent governance.

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  41. ppm DISTRESS SIGNAL says:

    Please resign Deputy Governor for love of country

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  42. Anonymous says:

    😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂

    The Cayman Islands Civil Service is a joke and all the deflection or poor decisions by the leadership proves it

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  43. Facts says:

    But of course he would not. Fellow West Bayer and Fellow Brother (Lodge). EVERYBODY ELSE IS WRONG……..

    Come on now if anyone expected a different outcome then your only fooling yourself.

    Facts. Proven Facts……..

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  44. Anonymous says:

    Eric Bush is the golden calf protected by DG and the Lodge how else can you explain all of this?

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    • Anonymous says:

      And his crappy security company that installed the traffic cameras should pay all the money back to CIG for shoddy workmanship.

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      • Anonymous says:

        CCTV, License Plates, Dubai….anyone got any other success stories from Eric’s corner they want to share?

  45. Anonymous says:

    Franz Manderson as Deputy Governor never fails to disappoint or insult the intelligence of the public

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  46. Anonymous says:

    Eric and Franz deserve each other.
    It is a joke to expect Franz to find his and Alden’s favorite CO that holds all their secrets guilty of anything.

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  47. Anonymous says:

    O land of oft, fresh wheezes
    Of illicit gains unfair
    With opportunities for misappropriation literally ev’rywhere.
    O sea of murky dealings,
    Concealing the darkest news,
    When ‘ere my thoughts sink downward,
    I always think of you…

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  48. Anonymous says:

    Franz, you really going take the fall for this?

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  49. Anonymous says:

    Direct Rule please. Now. We simply cannot govern ourselves.

    Franz, have your robust law-enforcers arrested the leakers of the stipend information yet? (Because they sure as hell haven’t arrested any of the people that are known by them to have defrauded the government).

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  50. B. Edlam says:

    Inmates should never be allowed to run the asylum.

    #WorldClass

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    • Anonymous says:

      Roper let us all down to cover his guys. Very disappointed in his role in this latest civil service embarrassment.

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      • Anonymous says:

        He very sadly has gone from apologist to enabler. The standards of governance are not only far below what Caymanian deserves, they are in some respects criminal.

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      • Anonymous says:

        Just more Roper lawlessness.

        Shame on you Roper.

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