‘High probability’ of fraud

Audit reveals fuel free-for-all


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
depot on North Sound Road.

The government’s internal audit
unit looked at the five departments and statutory authorities that 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
those cards.

*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.

The internal audit unit stated that
the RCIPS had 505 “active” employee fuel cards, but that nearly 28 per cent of
those (141 cards) belonged to individuals who were ex-RCIPS employees.  

One of those ex-RCIPS employees
made 156 transactions at the Department of Vehicle and Equipment Services
facility between 1 January, 2008 and 17 January, 2009. That employee had left
the police service on 28 February, 2007, audit records showed.

There were eight former police
service employees identified in the internal audit report who had made at least
one gas card transaction after leaving the service.

The police service wasn’t the only
agency to have gas cards held, and in use by, former workers. According to
audit records, there were 38 cards held by former Department of Environmental
Health workers, 25 held by former Water Authority employees, and 24 held by
ex-public works employees.

The Department of Environmental
Health told the audit unit it had deactivated the 38 cards belonging to its
former workers shortly after the audit was released. The Water Authority said
it had sent some requests for gas card cancellations to the Department of
Vehicle and Equipment Services prior to the audit being completed. However, the
Water Authority did not request confirmation that those requests had been affected.

The Public Works Department may have
sent requests to cancel gas cards held by ex-employees, but auditors said there
was nothing on file to prove those requests had been made.

According to an RCIPS statement
submitted to the audit unit, processes were put in place to cancel ex-employees
cards and that a list of deactivation requests had been sent to the Department
of Vehicle and Equipment Services. The police service said it will request a
quarterly report from vehicle and equipment services to verify that only
current employees have active fuel cards.

The internal audit unit report was
completed in December 2009, although Department of Vehicle and Equipment
Services officials had issued warnings about government workers’ use of the
fuel depot as early as May 2009 in an internal memo.

Mr. Harrison said that internal
audit reports are typically sent to the Financial Secretary and copied to the
auditor general’s office. They are not formally presented to members of the
Legislative Assembly as are the auditor general’s reports.

In this case, Mr. Duguay said he
believed the gas card report was significant enough to be brought to
lawmakers’, and the general public’s attention.

“We came to the conclusion
that it was a very high probability that significant fraud relating to the use
of fuel for non-governmental purposes had, and continues, to take place,” Mr.
Duguay noted in his report.


The Department of Vehicle and Equipment Services fuelling facility on North Sound Road.


  1. It is time for the Caymanian people to stand up and recognize that they are responsible for our current situation. The increase in violent crime, fraud and a huge public service sector are not caused by the expats as so many beleive.

    A country, regardless of how large or small, is like a corporation and as such, must be run that way. That includes running it efficiently and with as little waste as possible. I applaud the current governments effort in reducing their pay and hope that they continue to trim the fat. Hopefully the RCIP will be able to weed out the small faction of criminals responsible for the current crime spree.

  2. Is it any wonder the government is in such dire financial straits when abuses like this are uncovered? The taxpayers have been subsidising turtle meat for years, and now we find out we’ve been subsidising gasoline stealers as well. What next?

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