A high probability of ‘significant fraud’
An estimated $500,000 worth of
vehicle fuel was purchased in 2008 and early 2009 by employees and ex-employees
of five Cayman Islands government departments
who did not use that petrol for job-related functions.
That’s the conclusion of Cayman
Islands Auditor General Dan Duguay following a review of an internal audit unit
report regarding fuel usage at the Department of Vehicle and Equipment Services facility on North Sound Road.
The government’s internal audit
unit looked at the five departments and statutory authorities who accounted for
more than 73 per cent of fuel purchases at the North Sound Road facility between January
2008 and March 2009. Those agencies reviewed included the Royal Cayman Islands
Police Service, the Department of Environmental Health, the Water Authority,
the Public Works Department and the National Roads Authority.
The audit unit’s conclusion – not
the auditor general’s – was that a lack of internal controls by the management
of these five departments led to the potential for significant fraud to occur
with the purchasing of fuel.
“Although testing was only
conducted on the top five consumers of fuel from (the Department of Vehicle and Equipment
Services), we feel that it is likely that the concerns noted for these five
agencies would be seen in most of the other 55 agencies that purchase fuel,”
the internal audit unit’s report concluded.
The auditor general was a bit more
“In 33 per cent of the purchases
reviewed, the (internal audit unit) identified problems that should have been
investigated by the organisations involved,” the auditor general’s report read.
“These transactions could be viewed as suspicious.”
“The Office of the Auditor General
has estimated that as much as $500,000 of fuel annually may be for
non-governmental purposes,” Mr. Duguay’s review concluded.
A number of problems with vehicle
fuelling – described as “severe breakdowns in all elements of the control
system” were identified by the auditor general’s office:
*Twenty-six per cent of the fuel
cards and drivers cards issued by the five government agencies reviewed
belonged to people who were no longer employed with the agencies who had issued
*Vehicle cards issued by the five
agencies could not be found in the records of those agencies.
*The review of nearly 10,000 fuel
purchases over a 15-month period found that the employees or ex-employees using
the gas cards only entered the vehicle’s odometer readings about eight per cent
of the time. Therefore, it is difficult to prove who was using the card, and
for what vehicle.
“To pinpoint one specific person,
we may not have enough evidence,” said Deputy Auditor General Garnet Harrison.
“It may still be referred to police.”
However, police officers and former
police officers were identified in the internal audit unit report as having
some of the fuel cards that were potentially abused.
Read more about this story in
Thursday’s Caymanian Compass…