CIG still battling to produce full public accounts
(CNS): Seventeen years after the Cayman Islands Government introduced the modern accounting system it now uses, it is still not able to get an unqualified opinion on the entire public sector accounts or produce the completed accounts on time. In a review of the 2021 government books released by the auditor general this week, Auditor General Sue Winspear raised concerns about the need to tackle the ongoing problems affecting this crucial year-end consolidated accounting.
“The government needs to develop and implement an action plan to improve the quality of the consolidated financial statements of the entire public sector, which sets a roadmap for moving from an adverse opinion to a qualified audit opinion in the first instance and an unqualified one in the longer term,” she said in a press release issued with the new report.
Winspear has made a list of formal recommendations to improve matters, including the need to bring the pay and working conditions of staff at statutory authorities and government companies (SAGCs) in line with the civil service, as required by law. But she said she was more concerned that government estimates the full cost of harmonising all staff terms and conditions before it is implemented by SAGCs because of the impact this is going to have on government finances.
“In 2021, the Health Services Authority were the first to adopt the same pension contribution framework as the civil service and if all SAGCs do the same, the additional cost to the government will be significant,” she warned. “After quantifying the potential cost impact, government will need to take a policy decision on whether to amend the Act or provide SAGCs with sufficient funding in their future budgets to pay for this.”
This year’s submissions from many government entities were delayed, Winspear said, pointing the finger at the finance ministry and the poor leadership on the government transition and its handling of the broad reshuffle of departments within ministries when the new government was elected.
“During the 2021 financial year, there were significant issues that affected the whole of the Cayman Islands Government and I would have expected the Ministry of Finance and Economic Development to provide better leadership on these matters,” the auditor general said.
“Many departments were transferred into new ministries in July 2021 after the May elections, which meant the assets, along with liabilities and budgets, had to be transferred. The Ministry of Finance did issue guidance on this but the process was not well handled and instead of all balances for new departments being agreed by the timescale set, many dragged on until after the year-end, affecting the quality of draft financial statements and the accuracy of balances included,” Winspear added.
Several ministries missed the statutory deadline but some finance teams and her audit staff worked through the issues, even though the Office of the Auditor General had to conduct a further seven audits to complete 2021. Winspear called for better reporting to allow users to determine whether resources have been used effectively and efficiently. The budget and subsequent accounts should be measuring the performance of government entities against outputs and outcomes.
Overall, 43 out of 50 public sector entity audits for 2021 have been completed to date and they were all unqualified. The 2020 and 2021 audits of the consolidated Entire Public Sector accounts are ongoing.
The outstanding seven audits are for the Ministry of Health and Wellness, Cayman Islands Airports Authority, Cayman Turtle Conservation and Education Centre, Ministry of Financial Services and Home Affairs, Ministry of Investment, Innovation and Social Development, Ministry of Financial Services and Commerce and the Entire Public Sector.
Based on the 19 core government audits completed, the financial results of ministries, portfolios and
offices show that all but three recorded a surplus in 2021. The planning ministry and the office of the commissioner of police recorded deficits for the 2021 financial year. The Ministry of Finance and Economic Development (MFED) broke even.
But across the SAGCs 2021 was a mixed year, with 17 recording surpluses, six deficits and one breaking even. Five SAGCs recorded the most significant surpluses: the Health Services Authority (HSA), the Port Authority of the Cayman Islands (PACI), the Cayman Islands Monetary Authority, the Segregated Insurance Fund and the Civil Aviation Authority. But for the HSA and PACI the surpluses were due to technical issues such as the revaluation of assets and liabilities rather than from operations. PACI actually had an operating loss
The Water Authority and the National Housing Development Trust (NHDT) were the two SAGCs that recorded the most significant deficits due to the re-measurement of the post-retirement employee healthcare liability. But Winspear warned that a number of public authorities continue to show signs that they are under financial strain.
Winspear said that most public bodies now routinely prepare annual reports to accompany their
financial statements and she urged people to read them to get a deeper understanding of government business. But after improvements in recent years in sending the accounts to parliament, she said she was disappointed that, at the time of completing this audit, only eight of the 43 completed reports for 2021 had made their way into the official public domain via parliament and most reports have not yet been approved by Cabinet to get these important documents to the final step.
“Parliament does not sit frequently enough to table these reports,” she said, before urging parliament to meet more frequently so these reports can become public and for the government entities to publish them on their websites as soon as possible.
Check back to CNS for more detailed stories relating to the reports later this week.
See the OAG’s full report in the CNS Library.
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Category: Government Finance, Government oversight, Politics
Folks read the report. It’s not all bad news. In fact Cayman is well ahead of the other OT’s in its financial management.
I remember when not one single entity could get their accounts submitted on time.
Not only is that failing a thing of the past. But all audited financial statements are unqualified the highest audit standards.
That should be the headline.
Franzbot alert.
“Better than it was” is still not the financial control or transparency “pass” threshold. There are no special prizes for continuing to fail to maintain reasonable controls in regards to the public accounts law a generation later. Prudence requires failing departments to be put on notice and their head of departments should have been fired for negligence years ago. Franz should be terminated as the head of it all, since he held/holds the duty of putting these servants on notice and terminating them for negligence and non-performance, if that’s the case. HR head should also be put on notice if employee standards are going to be a joke. This is OUR money, not theirs.
The buck starts and stops with the deputy governor. No more excuses and empty promises. Maybe it’s time for him and few others to go now since things seem to be going from bad to worse
another glorious day for the civil service!
time for some awards franzie!
Do Cayman Airways produce accounts?.
Govt. aside when are we going to see audited accounts from Cayman Airways, or, in fact, any accounts?. What year did they last produce unqualified audited financial statements?. We have all these new aircraft flying all over the U.S (and the Brac!), but how much is it costing the public?.
You will never know. Recall that all of their data is commercially sensitive, ie we would be very embarrassed at how much money we are losing.
Don’t forget, Cayman Airways “makes a profit after subsidy”.
…and after ritual non-payment of CIAA landing fees and passenger taxes for years. There are perpetually corrupt reasons why the same identified departments are always in the headlines and don’t produce reports or full transparent accounts.
So does Cayman Brac.
World Class !?!
CIG has no interest in transparent reporting. They don’t understand it but know it will expose their deceit.
One of the most fundamental responsibilities of central government and all of the government authorities, departments and agencies is the production of accurate and timely financial statements.
There now needs to be some accountability.
The executives in any government entity that is unable to produce accurate and timely financial statements should be subject to disciplinary action including termination. CEO’s, CFO’s and other senior executives must not be allowed to remain in place if they are not able to fulfill their basic responsibilities.
They are Caymanians, 9:33, so they wont be terminated as there are no Caymanians to take their place and the idea of bringing in suitably qualified and experienced foreigners to do the jobs wont fly nowadays. That has been the situation for 20 years or more.
Umm… many of them are not from here and if they are Caymanian then often they a grant from a certain criminal, in questionable circumstances. But continue to malign your hosts of you must…
“Many of them not from here”. So, just like the criminals and inmates at Northward 7:41? Lol. The number of posters on here refusing to believe that the problems in Cayman are mostly, not entirely, homegrown is staggering.
CIG’s public service departments, and their service Heads, have had a legal duty to keep transparent basic accounts for the public (our money), for over a generation, and yet nobody in charge of these failures has been put on notice, probation, or fired. Look no further than he who underwrites this failure. What is Franz Manderson’s official comment on the accounting failure he presides over? Why hasn’t he been put on notice or fired?
9:10. Read the report the AG commented our DG for his leadership. The tremendous improvements listed in the AG all happend since his appointment.
Name a Government that has an unqualified opinion on its EPS.
A better fail is still a fail, everywhere in the world. In the case of a prescribed accounting standard, failing to comply with conditions of employment under the PMFL, is also defined misconduct. For such a deficient state to be perpetuated and insulated from recourse for years is at least gross misconduct and at worst institutionalised corruption. Both should be worthy of serious investigation by now.
The outstanding seven audits are for the Ministry of Health and Wellness, Cayman Islands Airports Authority, Cayman Turtle Conservation and Education Centre, Ministry of Financial Services and Home Affairs, Ministry of Investment, Innovation and Social Development, Ministry of Financial Services and Commerce and the Entire Public Sector.
Need we say more?
Outstanding audits are in part a result of staffing shortages in the Audit Office.
Also In the release outstanding audits for Civil Aviation
I blame hurricane Ivan. Oh, and Covid, don’t forget Covid.
Well the CFO who messed up the CIAA has now been hired by HSA to join the other 250+ of her people already there. So that should bode well for the future.
One can’t help but wonder if CIG’s inability (or refusal) to produce accounts that lead to an auditor’s UNQUALIFIED opinion — is deliberate.
#worldclass
#fixthedamndump