Auditor seeks advice on valuing government assets

The Glass House, the old government administration building, soon to be demolished

(CNS): The Royal Institution of Chartered Surveyors has given the nod to the Cayman Islands Office of the Auditor General on a government evaluation of its land and building assets, following an independent review of the process. In 2013 the government undertook its first ever valuation since the implementation of the Public Management and Finance Law and the auditor said he contracted the independent surveyors to review that valuation and ensure it was in line with international standards.

The failure of government to properly value crown property for so long has been a major factor in many of the qualified opinions given by Alastair Swarbrick and his team at the audit office on government financial reports. But with the evaluation of all the government’s buildings such as schools, post offices, libraries, and the legislative assembly among many others complete, and an assurance from the independent surveyors that the valuation was conducted in line with the relevant standards, the auditor general said he will soon be reporting on the findings of the review and government’s property values.

The assurance from the RICS about the valuation also comes in the wake of announcements by the premier that the government plans to sell the George Town Police Station and crown land in Safehaven in the near future. It has also revealed plans to demolish the Glass House, the old government headquarters which was declared unsafe more than a decade ago and replaced by the new HQ next door.

Speaking about the decision to contract RCIS to ensure the valuation process was robust, Alastair Swarbrick said he was extremely satisfied with the level of professionalism and quality of the review by the RICS team

“The work conducted and the feedback provided was characterized by my staff as being both technically strong, and at the same time pragmatic and relevant to the situations on the ground,” he said. “This mixture has provided valuable information to us, the local valuation professionals involved, and ultimately to the audited bodies of the government and the general public.”

Swarbrick explained that a valuation of fixed assets should be undertaken by government every five years but the last valuation was in 2001. Given that this was the first valuation since the introduction of accrual accounting after his office had reviewed the revaluation as part of its audit process, it was decided to engage an expert to review the methodology.

“We considered it was important to get additional assurance from an independent valuation expert that the methodology employed by the government was in line with the relevant valuation standards required for financial reporting purposes, rather than rely solely on our own assessment,” he said. He added that the RCIS have generally provided the required assurance his office needed for the purposes of its audit and the key findings will be reflected in the audit office’s review of the governments accounts later this year.

The RCIS said its contract with the auditor general was the first of its kind in the region and it commended the office for auditor its commitment to professionalism and transparency in its audit process. RICS Director of Regulation Michael Zuriff said the organisation was looking forward to continuing to work with that agency. He said it was a “great example of how RICS can help governments assure quality in their own auditing capabilities”.

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RICS will hold its second Cayman Islands Property and Construction Conference at the Grand Cayman Marriott Beach Resort in George Town on 5 March.