Inadequate oversight for the
issuance of visitors’ arm bands at the Cayman Turtle Farm led to the
“possibility of abuse and misappropriation” of funds collected from sales of those
items, an internal government audit has revealed.
The arm bands were one of several
control weaknesses noted in the Internal Audit Unit’s report, which expressed
serious concerns about the management of inventory and the collection of
revenues from cruise ships that send visitors to the West Bay tourist
attraction. Turtle farm managers said they have taken steps to address most of
those problems.
The audit – conducted during
government’s 2008/09 budget year – was only completed in May 2010, due to a
change in management at the government-owned tourist
facility. It was released to the Caymanian Compass under a Freedom of Information
request made in October. Auditors noted the change in management at the turtle
farm led to a delay in the report’s release because they could not obtain the
required management response to the report.
The problem with the arm bands,
which are issued to all paying visitors at the park, is that there were only
two colours used – blue for adult visitors and orange for children.
The blue arm bands were handed out
to adult visitors whether they paid the full price charged to tourists (US$45),
the price paid by guests of local residents (US$22.50) or the price charged to
resident visitors (US$12.50).
“The potential exist(s) for sales
agents to collect for Boatswain’s Beach (now called Cayman Turtle Farm) tourist
sales category but post the transactions as either a resident guest or resident
category and the difference misappropriated,” the audit report stated. “There
are possibilities for price manipulation and misappropriation in the sales of
the blue and orange arm bands.
“This arm band colour coding policy
has created the potential for up to 72 per cent price manipulation and
misappropriation where tickets valuing at US$45 may be sold for US$12.50 and
vice-versa.”
Turtle farm managers said
implementing a half-dozen different coloured arm bands for park visitors was
deemed not practical because it would “overcomplicate the enforcement of access
controls” at the park. However, turtle farm managers said customer receipts are
now being issued and that computer controls which allow the void of any sale
now must be approved by park supervisors.
Auditors also noted that security
and record keeping in areas where the visitors’ arm bands were kept was not
adequate.
For instance, any of three park
employees were allowed single access entry to the area where the arm bands were
stored; large numbers of those bands were taken from the storage area but
auditors noted no proper records were kept on the numbers of arm bands in
storage.
“There are concerns that the
measures in place to fully account for arm bands that are issued to the tours
department to accommodate visitors’ arrival from cruise ships and to the
marketing department for public relations purposes are inadequate and open to
the possibility of abuse and misappropriation,” auditors noted.
Cayman Turtle Farm managers said,
as a result of the audit’s findings, cash collections and departments would be
taken over by the park’s accounts department and that tighter controls will be
maintained over the issuing of the arm bands.
“Each cashier will be made
responsible for the wristbands issued to them,” park management noted.
Other problems were noted by
auditors in the sale of food and beverages at the turtle farm, where the manual
inventory system made it difficult to keep track of what stock items were being
used.
Auditors also found there was a
“heavy reliance” on trust with staff members who were not adequately
supervised. A lack of funding made it tough to obtain a proper inventory
management system as well.
“(The Cayman Turtle Farm) is unable
to determine whether or not there is a misappropriation of stock items,
including arm bands, and the full impact this may be having on the company’s
financial position,” the report noted.
Budgeting
The audit, which focused on the
operation and collection of revenues at the Cayman Turtle Farm, also revealed a
surprising discrepancy between what the facility expected it would earn and
what it actually took in for the year.
For example, turtle farm budget
projections for 2008/09 anticipated that the park would take in some US$6.9
million in revenue from tours. According to auditors, what the facility ended
up earning was US$3.3 million on tours – less than half of what was projected
at the beginning of the budget year.
A similar difference was seen in
retail sales, which were estimated to come in at US$1.9 million but ended up
being under $1 million. Food and beverage revenue estimates were US$1.15
million for 2008/09 but ended up being US$826,000.
Only in turtle meat sales and
property income did the turtle farm revenues exceed expectations. The failure
of revenues to meet expectations led to a government subsidy of more than US$12
million for the turtle farm for the 2008/09 budget year.
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