PPM claims ‘unauthorised’ spending

For the first time since news of Cayman’s pending budget trouble was announced, former Leader of Government Business Kurt Tibbetts has inferred that some $19 million in government spending between April and June was not authorised by his administration.

In a statement released Wednesday, Mr. Tibbetts also said the United Democratic Party government has found a political ally, Financial Secretary Ken Jefferson, in their efforts to hammer the previous government over Cayman’s $74 million operating budget deficit.

That deficit was for the government financial year that ended 30 June.

Mr. Jefferson made a lengthy statement to the Legislative Assembly on 1 July in which he said the previous government had been warned of a projected $68 million budget deficit in early February, but did not follow his advice in making more serious reductions to proposed government spending.

‘Quite frankly, this is nonsense,’ Mr. Tibbetts said.

‘The statement the financial secretary made on 1 July does not explain why he would tell Cabinet and finance committee that the government was projecting a $29 million deficit and total cash reserves of $126 million as at the end of June…if he did not believe that to be the case,’ Mr. Tibbetts said.

Mr. Jefferson previously said that Mr. Tibbetts and members of the People’s Progressive Movement government were told of the $68 million budget deficit on 9 February. Following that revelation, both men agree that a long series of meetings were held from late February and early March with an eye toward reducing that number.

Mr. Tibbetts points out that on 20 March Mr. Jefferson advised a public meeting of the Legislative Assembly’s finance committee that the agreed upon budget savings and revenue increases projected were realistic.

‘In summary, we believe that the revenue figures and the expenditure figures are as realistic as possible,’ Mr. Jefferson told the committee in March.

‘Is the financial secretary in the habit of giving statements and assurances to the Cabinet, to finance committee and the Legislative Assembly of this country which he does not believe are true?’ Mr. Tibbetts asked.

Mr. Jefferson said that the previous administration planned on budget savings and revenue increases that never materialised in the last quarter of the 2008/09 financial year.

For instance, some $4 million in savings from the Ministry of Health, $1.1 million from the Ministry of Tourism, another $1 million from the Ministry of Education and some $4 million from the Portfolio of Finance and Economics was proposed during the budget meetings in February and March.

Extra revenues were also expected from a government-proposed economic stimulus package, lease renewals of Crown lands, and additional company fees.

Mr. Jefferson said those savings and revenues were not realised, and that government ended up on the wrong side of a $36 million dollar drop in forecast spending and earnings.

He said the projection of a $29 million operating deficit in March was ‘unrealistic.’

In his statement Wednesday, Mr. Tibbetts seemed to infer that the civil service ignored proposed reductions in expenditure set out by the PPM government.

‘How does (Mr. Jefferson) explain what occurred since the budget was reduced by finance committee on 21 March and the ($74 million) deficit position at 30 June…during which period he says a further $19 million in unauthorised operational expenditure has been incurred by the civil service?’

Mr. Tibbetts said Mr. Jefferson also did not provide an adequate explanation for why government’s actual operating deficit jumped by $20 million between the end of March and the end of April.

The former government leader said that information was never given to his administration.

Mr. Jefferson said government generally takes its highest revenues in January, February and March, at the height of tourist season, and tends to see a gradual fall off through the late spring months. He said government ministers should have been aware of that.

The financial secretary also noted that none of the increased spending had been approved by the current UDP administration.

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