Audit reveals serious concerns at OFTEL
The office that oversees
government’s hand-held radio communications system, as well as handling contracts
for and maintaining local communications towers and government telephone
services, was found to have inadequate management systems and inconsistent
operations during a review completed by auditors in August 2009.
“This opinion is based on inconsistent
operating procedures observed during testing, which were compounded by lack of
finance staff during the period under review,” a report from the Internal Audit
Unit stated. “Further, lack of formal operating policies and procedures and
non-compliance with existing laws and regulations were noted.”
The report, which covered the
period between July 2007 and June 2008 – became public following an open
records request filed by the Caymanian Compass earlier this year.
According to auditors, the Office
of Telecommunications, or OFTEL as it is frequently referred to, plays a key
role in providing critical communications services to key agencies throughout
the Cayman Islands.
At the time of the report there
were 2,200 radio users or subscribers on the country’s computer controlled,
multi-site high-frequency communications system. Agencies using the radios are
charged a $55 per unit fee each month.
Other telecommunications systems
include a multi-site digital microwave network, local and wide area computer networks
and routers, and radio control dispatch consoles for the 911 Emergency Centre
and the Cayman Islands Fire Service. The office also provides essential
infrastructure, technical support and maintenance for the national weather
radio FM broadcast system and the public hospital radio paging network.
In the 2007/08 government budget
year, there were 12 jobs listed in the telecommunications office, but only six
“(This) makes the unit’s capacity
to effectively render the services expected of them particularly onerous,” the
audit report noted.
At the time, the office also lacked
proper financial expertise to monitor the business end of its operations. That
included signing annual contracts with the 51 public and private agencies
serviced by the telecommunications office. At the time the report was
completed, 46 of those 51 contracts were not to be invalid. Examples of agencies
that did not have valid contractual agreements with the telecommunications
office included the Royal Cayman Islands Police Service, the fire service, the
Immigration Department and 911.
“Lack of valid agreements with
internal and external customers contravenes the stipulations of the (Public
Management and Finance Law) as well as increases the risk of loss of revenue to
OFTEL,” the auditors wrote.
In its management response, the
telecommunications office insisted that actual services to various agencies
were not interrupted and stated that it considered all those services being
provided by just two permanent staff to be “a feat indeed”.
“When compared to a similar-sized
network, such operations require significantly more staff, i.e. in excess of
three times the present compliment,” the telecommunications office responded.
Another major finding of government
auditors was that, if the telecommunications office had such concerns about
staffing, it had not identified those previously in risk management
“(The risk management
documentation) does not indicate the agency’s inability to adequately manage
the network system by recognising its full capacity to handle day-to-day operations,
early detection of vulnerabilities and ensuring quick recovery in case of
malfunctions or disaster due to the current lack of documentation of the network’s
technical infrastructure,” the Internal Audit Unit report stated. “OFTEL
technicians only discover its connections and possible weaknesses as problems
In addition, auditors said there
were certain basic questions about the communications network design, capacity
and limitations that telecommunications office managers simply could not
Those included whether the
communications system was installed as per its planned design; whether it was
built to standards that could withstand catastrophic weather conditions; and whether
there were back-up systems in place “so as not to rely on one radio service
“It is difficult to evaluate,
manage and mitigate the potential risks an organisation is dealing with when
risks and extent of exposure are not properly identified,” the audit report
read. “It was apparent that OFTEL’s personnel were not aware that the routine
checks and connection monitoring is part of their maintenance activity to
ensure that the agency will have the sufficient capacity to respond to an emergency.
“As such, the number of hours spent
in performing these maintenance duties (was) not correctly documented in the
time recording system,” the auditors said. The time recording system, or TRS,
is the system that most government departments use to monitor employees’ daily
work and productivity.
management said it had received bids from independent consultants on a
potentially more detailed evaluation and audit of the communications network
and were awaiting instructions from the government ministry on how to proceed.
In response to the latter concern
about routine equipment check and connection monitoring, the office stated it
did not receive a “hand-over” from its predecessors and that it had no proper
advice to guide it in this regard. Officials again stated the need for more
guidance from government and the need for a permanent financial advisor in the