A third leg of Cayman’s public finance management reform dealing with public authorities is in the works.
Public authority reform will create legislative control and financial accountability for statutory authorities and government companies such as Cayman Airways and the Turtle Farm.
Not yet drafted, the Public Authorities Bill would join the Public Management Finance Law and the Public Personnel Management Law as the third element of Cayman’s Financial Management Initiative.
Deputy Financial Secretary Peter Gough outlined the Public Authorities Reform at the recent Caribbean Regional Technical Assistance Centre workshop held here last month for delegates from 20 Caribbean countries.
Mr. Gough said a Public Authorities Law would make authorities and government companies fiscally responsible.
The proposed legislation would be overarching in nature, meaning it would take precedence over individual statutory authority laws.
In a sense, the legislation would force each authority or company to operate as a separate and economically feasible entity.
There will be no more grants or subsidies to those entities from Government.
‘Their losses will count against government,’ Mr. Gough said. ‘You can’t leave them out there making loses.’
Should an authority or Government company lose money, Mr. Gough said it would have to receive an equity injection, which would carry over on their balance sheet just like in private sector accounting.
Consistently poor performing entities would either have to find ways to change the bottom line or face possible elimination, Mr. Gough said.
As with the general focus of the FMI, the Public Authorities Law force statutory authorities and government companies to be output driven.
Purchase agreements would have to be signed yearly with government detailing the terms and conditions of the output.
For authorities that serve mainly in a regulatory capacity, the Public Authorities Law will primarily serve as an umbrella law to put some governance around those entities.
One key point addressed by the Public Authorities Bill will deal with who can sit on the boards of statutory authorities.
Under the provisions of the proposed bill, Cabinet ministers and members of the Legislative Assembly cannot sit on boards.
Civil servants could not serve as chairman of any board, and there would be no remuneration for civil servants who sit on boards.
There would also be specifications of skills and experience for board members, and the maximum term for sitting on a board would be four years.
Mr. Gough expects some of the proposals to meet with resistance.
‘There will no doubt be debate on some of this,’ he said.
Leader of Government Business Kurt Tibbetts said he was a proponent of idea.
‘The policy of this government is, as far as possible, not to have ministers or members on these boards or chairing these boards,’ he said.
Mr. Gough indicated that it is hoped the necessary bill would be drafted and enacted sometime this year.