Many of Cayman’s statutory authorities have failed to submit financial statements as required by the Public Management and Finance Law.
The problem predates PMFL, but has continued despite its enactment.
Public Accounts Committee Chairman Osbourne Bodden spoke about the problem in the Legislative Assembly last Thursday when he read his committee’s report on the Report of the Auditor General on the Financial Statements of the Government of the Cayman Islands for the six month period ended 30 June 2003.
‘The Committee is still concerned about the tardiness in the submission of financial statements by statutory authorities for tabling with the Legislative Assembly,’ he said. ‘This is crucial to the accountability and transparency process and impacts the usefulness of timely information.’
Statutory authorities are supposed to submit financial statements for audit to the Auditor General with in a set period of time after then end of the financial year on 30 June. For most authorities, the time is two months; however some are given three months.
Mr. Bodden said some authorities simply are not meeting the deadlines.
‘The Committee feels that certain statutory authorities need to be more responsible and accountable with their financial audit obligations,’ he said. ‘This can only enhance and benefit standard reporting requirements, best business practices and good governance.’
In a subsequent interview with the Caymanian Compass, Mr. Bodden confirmed that getting financial statements on a timely basis is still a problem to this day.
‘It’s like pulling teeth with some of them,’ he said. ‘Some authorities are simply ignoring the law.’
Mr. Bodden added, however, that the fault of not getting the financial statements table in the Legislative Assembly on time is not always that of the statutory authorities.
‘Sometimes the authority does what it is supposed to do, but the Ministry holds it up,’ he said.
Auditor General Dan Duguay confirmed that the tardiness in receiving the annual financial statements from the statutory authorities is a source of frustration for his office.
‘It makes if difficult for us from a planning point of view,’ he said.
Mr. Duguay also confirmed that most of Cayman’s statutory authorities are not meeting the deadlines set by law for submitting financial statements, something he said was undermining the whole purpose of the Public Management and Finance Law.
The financial statements must also include information on outputs, as detailed in the PMFL. Without the financial statements, the government has no way of knowing if the statutory authorities are doing what they said they would do at the time of getting their annual budgets approved.
‘The government gives [the statutory authorities] money and asks them to be accountable for it,’ Mr. Duguay said. ‘Before they get voted new funds, we should want to see what they’ve done.’
Mr. Duguay said some authorities were doing a good job at getting their financial statements in on time, including the Cayman Islands Stock Exchange, the Cayman Islands Monetary Authority, the Water Authority and the National Roads Authority.
He particularly praised the NRA.
‘They’re a relatively new agency and they could have taken the route and said they would have to be late with their financial statement, but they got it in.’
On the other end of the spectrum, Mr. Duguay said the Health Services Authority was probably farthest behind in submitting its financial statements.
‘The HSA haven’t submitted financial statements quite a while,’ he said. ‘The last one we received was for 2003.’
The Public Service Pensions Board is also far behind, but Mr. Duguay called it a success story of sorts because it has taken positive steps to catch up after being four years behind at one point.
‘We currently looking at their 2004 statements, so they’re only two years behind now,’ he said.
Mr. Duguay said part of the reason why statutory authorities are not meeting their deadlines for submitting financial statements could be because there are no penalties specified in the PMFL for not doing so.
‘There’s nothing in the law that I know of with regard to sanctions,’ he said.
Mr. Duguay said he hoped Cayman’s Legislators held the authorities accountable if they did not submit financial statements on time.
‘If [the head of an authority] can’t do their job, the legislators should hold them accountable, perhaps with the ultimate sanction,’ he said, referring to their positions.