Over two decades on, CIG still struggles with accounts
(CNS): Auditor General Sue Winspear still has “concerns about the quality of the submitted financial statements” by government entities after hundreds of adjustments and additional disclosures had to be made to the 2022 financials submitted for audit this year. In her latest general report on the Cayman Islands Government’s annual bookkeeping, she also noted failures to comply with legislation, particularly in relation to procurement.
Twenty-three years after the government rolled out the public management and finance legislation that changed the government’s accounting systems from basic accounting to meet proper international financial standards, the government’s army of accountants is still struggling to keep the books straight.
While Winspear admitted there had been dramatic improvements in recent years, with most ministries and public authorities getting the books in on time — and after the adjustments getting clean opinions — there are still some significant issues.
“The quality of financial information submitted to my Office by the public bodies needs improvement,” she said in the report, Financial Reporting of the CIG – General Report, 31 Dec 2022, which has a significant amount of information. “This is demonstrated by the number and value of audit adjustments made to the financial statement after they had been submitted to my Office for audit.”
Winspear explained that for the 2022 accounts, over 280 audit adjustments valued at a whopping $115 million were made by public bodies.
“These adjustments resulted in expenditure changing by over $26.5 million, which affected the bodies’ financial performance,” she wrote. “Assets and liabilities were also adjusted by over $29 million and almost $85 million, respectively, which affected public bodies’ financial positions. This means that decisions could have been made based on inaccurate financial data during the year.”
She also warned that the internal controls for most public entities still need to be strengthened, and accounting policies were often inadequate. “All of this hinders transparency of the financial reporting process,” the independent auditor said.
In a press release about the report, she said there were concerns about statuary authorities and government companies not complying with the law. Several SAGCs have still not aligned staff remuneration or terms and conditions with the civil service more than three years after the legislation was changed. The government has also failed to cost this harmonising of staff terms and conditions and consider the implications for the bottom line.
Another worry about the management of public finances is the failure of many public entities to follow procurement rules. Some public bodies have procured goods and services without approval from the Public Procurement Committee, while others have directly awarded contracts for procuring goods and services without approved business cases.
“These issues must be addressed to ensure that public bodies get value for money when procuring goods and services using public funds,” she said.
In the report, Winspear also details the sticky challenge that the government faces over its consolidated accounts. The Entire Public Sector financials are an important part of the whole process because the public is only privy to certain elements of public finances in this document, such as the actual revenue that the government collects.
Because of the CIG’s failure to implement corrective measures to improve the quality of the consolidated financial statements, her office will likely issue an adverse opinion. However, due to the catalogue of problems with these important accounts, the audit office is still working on 2020 and 2021 documents, and the 2020 financials are about to get an adverse opinion.
“The Ministry of Finance needs 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.
Check back to CNS next week for a close-up analysis of the various financial and annual reports from some of the 47 different public bodies, the auditor general’s concerns, their financial health and their compliance with the law.
See the auditor general’s report in the CNS Library.
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Category: Government Finance, Politics
True about the pay separation.
How come front line staff in government companies like Tourism attractions make less than $3,000 full time workers in these times?
Govt workers need to realize their salaries might sound low but free Pension & Healthcare has to be included in the equation. Those two things are worth between at least 1000 and 3000 monthly so in that context salaries are not too bad.
Don’t worry, Franz will be gunning to replace the Auditor general with one of his friends soon and that way none of this will make it into the light of day. A world class Civil Service if you ask Mr.Manderson and the Governor. Who really knows what the financial situation really is. I hear that the civil service are not happy with PACT so i see a big Christmas bonus coming to win their votes. Where is the anticorruption commission? why are they ignoring everything that is happening within procurement? Put a snitch line in place managed by a audit firm – the standard for most governments and large companies. Take action before its too late.
I cannot see Franz not going through due process when Mrs Winspear’s tenure comes to an end.
The one thing we have been blessed with is the high standard
of professionalism and ethics of Mrs Winspear and her team. I should add that her predecessors, many of whom I have worked with have also been excellent. Compared with other Caribbean jurisdictions we are lucky.
Maybe its time new Chief Financial Officers (CFO) are employed. If you keep getting the same result every year something just not adding up. Need new visionaries. Same people in the positions for too long. Perhaps send the CFO’s into audit roles and the auditors placed as CFO, could yield a better result.
This is another example of lack of enforcement (aka consequences) and the impact it has across all of society.
It starts at the top and when CIG can’t be bothered to have their financial statements in order, it sets the tone for the rest of the civil service and here’s how it shows up:
Garbage fees left uncollected
Traffic violations ignored- including DUI’s
Development laws ignored
Lack of consequences for violence and anti-social behaviour in schools
Poor exam results tolerated
Elected officials behaving poorly, and criminally
Inconsistent application of duty policies
And so on…
Imagine if the CIG made enforcement of all laws and policies a top priority going forward- what do you think the outcomes may look like?
✅ 🥳 👊🏽 👀 👨🏽✈️ 👩🏽✈️ 💥 🥂 🚓 🚀 ⛩️ 🩷 💯
More promotions and job creation than Quakers have Oats and yet productivity and efficiency at and all time low. Customer service is non existent and is now resorting to pushing some funny face button as you leave thankful you got something done after hours of wasting time navigating the quagmire of bureaucracy of our so called World A$$ civil service. The only thing rising is the frigging level corruption we see and tolerate every day match only by the phony complaints of being underpaid and overworked by obnoxious senior government employees.
Failing at public responsibilities has devolved into ritual habit and isnt a struggle. Franz allows this, and perhaps encourages it. That’s why this should escalate to a police matter. It’s not only the professional time theft of those with duties and standards of oversight but also indelible corruption costing us perhaps hundreds of millions.
Relax folks. These accounts are prepared in accordance with Cayman Regularity Accounting Principles otherwise known as CRAP.
The definition of a world class civil service.
Franz should hand out promotions and bonuses for such performances instead of the usual gibberish. In the real world holding professionals accountable goes with the job but not Cayman’s civil circus.
If this happened in the CIG Statutory Authorities, eg., CIMA, CAA, etc, and Corporations, eg., CSX – there would be endless name-calling by the DG and his minions.
Do you jobs, please!
2:28 you obviously haven’t understood the report.
It is clear that you obviously don’t .
get it done, Franz!
God forbid I am late filing my audited FS with CIMA, they will yank my licence. What is the downside for CIG?
yup!!
A lack of effective internal controls is one of the main reasons erroneous figures make it all the way to the financial statements undetected. Should the people who sign these financials attesting to them being correct before they go to the Auditor General be held more accountable?
A lack of accountability is the biggest problem faced by the public sector, no one speaks up or challenges incompetence or improprieties, the status quo is the easiest position.
Agree with the majority of your comment except people DO speak up challenge incompetence and questionable practices and those are the ones who are ignored, put on garden leave or fired.
“World-Class” means staying in your lane and turn your face the other way and if you see something, don’t dare say anything.
Trying to imagine a private company whose management can’t get their accounts to even a “qualified “ standard year year after year, and whose auditors routinely propose double digit million dollar adjustments and even then won’t approve the accounts, and yet still retain their very highly paid jobs. World class all right- if you use Trump Corp as a standard.
you lost me on Trump corp
time for class action lawsuit against the incompetence of the civil service and cig.
any comment mrs governor????
As long as the UK doesn’t have to either bailout Cayman or put direct rule with its consequent costs and cries of imperialism, we really don’t give a …You elected these bozos, you sort it out.
MP’s do not run the civil service. Never have and constitutionally cannot do so. The responsibility falls to persons like Deputy Governor Franz Manderson and his predecessors Donovan Ebanks, Lemuel Hurlston. That’s why they that get paid the big bucks and incredible post retirement packages.
Yet we promoting dingbats and nut jobs in senior positions in government who have little or no management skills other than spreading gossip & lies and stirring up animosity in departments and practicing pure laziness and inflating their salaries .No surprise here this is not apart of their job description producing work is not permitted only talking and complaining about work to their friends is .
Timing of the news from the AG couldn’t be better, especially when we have two Legislative Watchdogs visiting. Coincidence, or was is it planned to coincide with this visitation?
This failure to account and follow procedure seems more deliberate than incompetence and smacks of cronyism and misappropriation.
Shouldn’t be any surprise if the hammer comes down.
The visiting team are reviewing the Parliament not the Civil Service, there is a thing now called “separation of powers” and one CANNOT crossover to the other.
But they do
There’s no excuse for CIG not making enough effort. There are enough accountants on work permits and plenty of caymanians qualified or on their way to being so, that progress, accuracy and timeliness could have been vastly improved upon. So then you have to think that there’s a different agenda here, a deliberate plan to NOT be honest, and to hide expenditure that might otherwise be deemed inappropriate or improper. Without quality in the numbers, who knows who is benefitting by means of fraud
“Without quality in the numbers, who knows who is benefitting by means of fraud”. Exactly. Why there is zero interest in correcting it. Pols and CS in an incestuous relationship where the CS gets fat salaries, no one says anything about side hustles that feed off procurement and selective enforcement of rules to feed vested interests. All paid for by us through crippling levels of duty and artificially stoked prices. And the Governor, charged with overseeing governance, says there is nothing to worry about. Well , nothing for her or the FCO to worry about.
Interesting to read this considering that government strictly requires entities who receive government subsidies to
1. have all audits up to date and
2. If an entity receives an adverse opinion, their eligibility for funding ceases. All well and good except that the same Government doesn’t follow its own rules.
“Owen is “not worried” at this stage about the risk of Cayman falling foul of public finance legislation and the UK stepping in if, as expected, public spending exceeds CI$1 billion in both 2024 and 2025“. Would she like to restate her position in the context of an adverse opinion from the AG?
As long as the completely inaccurate accounts show there isn’t a problem, she isn’t going to ask awkward questions that would require commitments from the UK to sort. Nelsonian blindness.
Year after year, Auditor General after Auditor General, it’s always the same problem. Why is no one being held to account? Why is no one getting fired? What is wrong with the accountants in government that they cannot comply with the framework. Is it a lack of understanding or pressure from their superiors to brush over certain things?
feature not bug.
Why don’t the governor, deputy governor, Cabinet, and backbench – all share this adverse opinion, knowing what that grade means? A conspiracy of ineptitude.
There is so much corruption going on with purchasing, it’s not even funny. I don’t even care or pay attention to it and I see it. It must be 10 times worse in reality
It’s almost like the majority of CIG is a welfare system and taking the publics money to spend on frivolous mostly for personal benefit is par for the course – especially when they look at the public as mostly expats that deserve to get fleeced.
A miracle we got off the grey list.
Two questions:
1. Is it intentional?
2. Is it professional incompetence?
The former is criminal, the latter is cultural.
This. At this stage, Manderson should be under investigation by the FCO.
And all the Chief Officers and Chief Financial Officers plus all their deputies that control policies, projects and operations in all the ministries.
The degrees of maladministration in various areas of our governance do appear to have crossed into the realm of criminality, at common law.
In CIG and on the crony Boards, that’s where massive leaks are happening Mrs Winspear.
professional and incompetence are contradicting words. one is either professional or incompetent
All of these accounting ‘errors’ are just their way of trying to hide the millions (likely hundreds of millions) of public money being misappropriated or given to cronies and family members, or used to buy votes.
Do you mean something like the GOV giving the Music Association funds for 1,000 per person but the members only received 800.00 per person. Accounting error?
Where did this money go and how was it accounted for? Wy is this being swept under the rug?
Franzies for all!
Complete disregard for spending, and blatant disrespect that there is not proper record keeping of how our money is spent.
Well, there is an attempt, it’s just not reliable, and nobody gets fired for this engrained misconduct.
failures to comply with legislation, particularly in relation to procurement….why are we surprised.
Palm Beach County Florida (USA), has a population of 1.5 million people and an annual budget just short of 6 million dollars in 2022.
The reason I bring this up is that in this county, various departments of the government work under their yearly budgets developed by departmental staff, and approved by the elected County Commissioners. However, the unique aspect if the budget and spending process is, The County Clerk, an elected official not reporting to the Board of County Commissioners, reviews, approves and pays all invoices.
In this way there is an open and separate process of payment. Assuring all taxpayers a system of fair, reasonable and justifiable costs of government are implemented.
I suggest the taxpayers of Cayman urge Parliament consider such a system for Cayman, since it is clear that the cost of Government will only increase in the future.
They tried this recently by making the Ministers have to approve ‘big’ expenditures. We see from the report how well this worked.
The two sides of Sue Winspear, –
Like her for what she does or don’t like her for what she does,
Either way don’t deny her the deserved respect for what she’s doing
No way will they get these grotesquely overpaid people in the statutory authorities like Ofreg to give up their huge salaries and perks such as free vehicles and fuel and align them with the civil service salaries which are much less. Who is going to force them? We don’t do enforcement in Cayman, not even for simple things like car window tint!!
We cant manage the dump but lets put out a fine for littering and we will never issue any tickets.
Just like cell phones.. 1 out of 3 cars is on the phone stuck up in front of their face. lets make a rule but never issue tickets,
The old guy who heads Ofreg up now and is supposed to be interim went from a civil service salary of about $90k to over $200k plus fancy vehicle @4:37.
Government not following legislation?
…this is not new. It should not surprise anyone. To much of our civil service has become an expensive, wasteful, and belligerent obstruction to Cayman’s success. It is unaccountable. There are no meaningful adverse consequences for those responsible.
So basically ignoring the rules and official corruption, along with general incompetence, is still alive and well in CIG. I sympathise with Sue Winspear in that she has a thankless task and despite her admirable efforts so little improvement is made by the chumps in charge.
This is OUR money, and demanding basic competence doesn’t have to be thankless. We can all thank Sue Winspear for saying it like it is: a big thank you from all of us getting ripped off by these crooks! Please keep it up!
6th (?) largest financial center in the world and we can’t properly account for a measly $1b despite the thousands of cig employees?!?
Reported by cns at the same time we get off the grey list. Not inspiring at all. I have no confidence my tax dollars are being spent in the right place.
Best bet is to minimize spending in Cayman. The economy won’t flourish and you contribute a smaller amount for the crooks to use. Do all shopping abroad; Buy toothpaste, creams, pads, vitmins, eyewear etc in bulk from the states and carry it back.