‘Premature’ audit story attacked

Financial Secretary Kenneth Jefferson and the Health Services Authority have both lashed out a Cayman Net News report last week detailing ongoing delays in having government financial statements submitted for auditing.

The story described a special Auditor General’s office report on the problem, expected to be handed to legislators this week, which it said would detail $1.5 billion in outstanding government-related accounts.

Mr. Jefferson said it is incorrect to say that government is yet to account for $1.5 billion in budgetary expenditure since the 2004/05 year. He added ‘any utility of the article is easily lost because the pre-mature release of details in the Auditor General’s report has resulted in an unbalanced article of unwarranted gloom and doom.’

The Caymanian Compass first reported on the special Auditor General’s report on 30 June, with Mr. Duguay saying at the time he hoped his report would cause legislators to demand that accounts be submitted on time.

Contacted Monday, Mr. Duguay said he did not want to comment on the Net News story or the accuracy of the $1.5 billion figure, saying he would prefer to talk about issues raised in his report: ‘These are very important issues for the Cayman Islands and I want to talk about these issues,’ he said.

The story described the Health Services Authority as one of the worst offenders when it came to submitting financial statements for audit – a charge its CEO, Lizzette Yearwood described as ‘erroneous’.

‘This is not the case’ she said, adding the latest Auditor General’s report acknowledges that the HSA has produced and submitted financial records for audit for the past two financial years.

HSA Board Chair Pastor Alden Ebanks also hit out at the story, telling an audience at a Cayman Islands Hospital event Thursday night: ‘We can disclaim the assertions made in today’s Net News that we are one of those government entities that did not submit our financials on time.’ He said financial statements for the 2007/08 financial year are expected to be ready by the 31 August deadline.

However the HSA has never submitted financial statements for the 2003/04 and the 2004/05 financial year.

The report will give an entity by entity account of how far behind schedule government ministries, portfolios, statutory authorities and government companies are in submitting financial records for audit, as required under the Public Management and Finance Law.

Mr. Duguay told the Compass in late June that the only core government entities that are up to date with their auditing requirements are his own office and the Office of the Complaints Commissioner. He said the situation among statutory authorities and government companies varied, with nine out of 25 having handed in financial statements for the 2006/07 year.

Mr. Jefferson attributed the audit delays to a new system of accounting introduced by the PMFL, which requires the preparation of output statements.

‘Whilst we are generally in a position to present the financial statements of government and public entities to the Legislative Assembly, the aforementioned law dictates that the audited financial statements must be accompanied by audited output statements: the latter is delaying the former and the end result is an overall delay,’ the Financial Secretary stated.

Mr. Jefferson claimed the fact government financial records aren’t being audited in a timely manner does not mean government is not accounting for money used.

He said government appropriations are approved by the Legislative Assembly and the inclusion of financial statements in annual and supplementary budgets during the course of a year make it clear to legislators how those approved funds have been used.

However Mr. Duguay has recently pointed to allegations of financial misappropriations at the University College of the Cayman Islands as evidence of the importance of regular, timely audits. It was a routine audit of the UCCI’s 2006/07 financial statements that unearthed questions about financial misappropriations within former President Hassan Syed’s office.

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