The Cayman Islands government has
revealed in budget documents examined by the Caymanian Compass that there is an
“absence of accounting skills” within the Ministry of Finance.
The ministry and the auditor
general’s office are taking steps to provide additional training for civil
service personnel responsible for keeping the books. Earlier this month, a five-day crash course
was held to help government accountants and auditors keep up to date with new
standards in financial management and reporting. Seventy-five government
employees attended, including employees of the auditor general’s office, the
budget management unit and the treasury department.
“We have to become familiar with the
new international standards and their implications,” said Audit Manager Martin
Ruben. “Financial managers should understand, for instance, the way a school is
financed and how this is to be reported.”
The five-day training workshop was
led by Welsh auditor Iolo Llewellyn, who applauded Cayman’s adoption of
international financial reporting standards well ahead of the United Kingdom.
However, Mr. Llewellyn said there
was also some debate during the workshop about applying the extensive
accounting standards – developed primarily for large public corporations – to
Cayman Islands government operations.
Problems from the lack of
accounting skills within government are grave. In the 2010/11 budget, managers
within the Ministry of Finance noted that an absence of accounting skills was
still an outstanding issue and that it posed an “unquantifiable” risk in terms
of financial value to government.
The budget documents also noted
staff had previously “failed to exercise due diligence or employ informed
business judgments” in some cases. Continuing training was also recommended for
managers and junior staff members.
Lack of accounting training among
government staff was revealed during hearings of the Public Accounts
Committee in May. Those hearings focused on the lack of timely government
accounts, which left the Cayman Islands in a position of spending some $1.5
billion for which no audited accounts were available.
During the May PAC meeting,
government staffers said they had turned in those documents to the auditor
general, who held them seeking further information. Assistant Auditor General Garnet Harrison
said at the time that the situation was not as simple as auditors refusing to
sign off on fairly presented budget documents. In some cases, Mr. Harrison
said, it appeared government staff failed to understand basic balance sheet
issues such as receivables and payables.
“Those submissions are not very
credible,” Mr. Harrison said. “We end up asking ‘OK, can we really audit these
things?’”
Those statements to the PAC were
confirmed by chief financial officer of the government Portfolio of Internal
and External Affairs, Vinton Chinsee, who told the same hearing that he had
experienced first-hand what Mr. Harrison had described. “When I got here two years ago, what I found
was the person who was actually doing the transactions didn’t understand what
they were doing,” Mr. Chinsee told the committee.
Although he did not agree that all
fault for the delayed accounts reporting lay with government departments alone,
Public Accounts Committee Chairman Ezzard Miller has cautioned Premier McKeeva
Bush about the issue publicly. Mr. Miller has said it’s likely the Premier – as
the new Minister of Finance – would take the blame for missteps of staff.
Under Cayman’s 2009 Constitution,
responsibility for government finances shifted away from the governor-appointed
financial secretary to the elected Minister of Finance.
The Cayman Islands auditor general
is planning to release a report in mid-December about the state of government’s
accountability reporting. According to the auditor general, less than half of
the government entities met statutory deadlines for turning in their 2009/10
financial statements this year.
Dozens of government departments,
statutory authorities and government companies remain years behind in
submitting proper financial statements and annual reports to the Legislative
Assembly. Auditor General Alastair Swarbrick has said the mid-December report
will provide an update on the progress of those reports “at whatever stage
we’ve got to”.
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After living here for the past two years, I’ve come to realize that the Cayman islands Government is lacking a lot more than just "accounting skills".
75 staff out of the office for 5 days = 375 man days or roughly 1.5 man years of lost work time in real terms. Probably time that could have been spent addressing other matters. It would be interesting to see a cost/benefit analysis for this little exercise -if there’s anyone in post who can prepare one.
Why not file an FoI request to find out how much this little exercise cost? At the same time it might be worth asking how many civil servants recruited into these posts actually had the qualifications they needed for the job?
This is a sad state of affairs and even makes me laugh. On one hand you have bitter words being said about the handling of the Immigartion Board and granting of Work Permits to non-Caymanians and now you read this article"…Lack of accounting training among government staff was revealed during hearings of the Public Accounts
Committee in May. Those hearings focused on the lack of timely government accounts, which left the Cayman Islands in a position of spending some $1.5 billion for which no audited accounts were available…"
It brings the question to the forefront: Is CIG hiring the right people to handle its financial affairs, be it local or expatriate?
Does anyone in the Cayman Islands really realise how grave and precarious a situation this represents ?
Civil servants who are hired and paid to do basic bookkeeping jobs for their departmental budget accounting not qualified to undertand even the basic difference between a debit and a credit, much less what a balance sheet is ?
How can anyone really trust or believe Premiere McKeeva Bush’s statements of millions of dollars of budget savings since his government has been in power when the governemnt’s own accounting professionals are adamant that his staff don’t know diddly squat about bookkeeping and accounting in the first place and certainly, neither does he !
‘Under Cayman’s 2009 Constitution, responsibility for government finances shifted away from the governor-appointed Financial Secretary to the elected Minister of Finance’.
Was there not some clause in this Constitution that spelt out the massive conflict of interests in one person being both Premiere and Minister of Finance at the same time and prevented it ?
Cayman not only now has Premiere with almost unlimited power, given to him by a new Constitution that has no protections in it, who is manipulating the immigration system, re work permits board and also the financial system of the country.
What in the terms, dictatorship, banana republic and third-world operations does the people of the Cayman Islands not understand ?
Absence of accounting skills in the Ministry of Finance? Hmmm… maybe they were using some of those ‘Special’ employees so prevalent in the Public Works department?
See the story on the Absence of Accounting skills in the Caymanian Govt:
http://www.compasscayman.com/caycompass/2010/11/23/Gov-t-has–absence-of-accounting-skills-/
The situation is so grave that in 2009 the Govt. had to hire accountants from a private firm to prepare financial statements of the 13 Ministries since 2005. That was perceived as the Govt.’s last chance to have its accounts in order and still I believe all the accounts have not been submitted to the Auditor General yet.
The Assistant Auditor General, Harrison says: "In some cases it appeared government staff failed to understand basic balance sheet issues such as receivables and payables". And then we shout about giving jobs to qualified Caymanians.
Fighting about the Work Permit Board or giving jobs requiring specialized skills and training to non-qualified Caymanians will not solve the problems of the Caymanian people. The basic problem is that there is a real shortage of higher education institutions on the islands and not everyone can afford to send their children to private universities in the US/UK. I don’t know how many of the adults have a University degree but the number is certainly less than that required for a developed nation. Hence the lack of skills required to run a business or a Govt. for that matter. The Govt. needs to increase its higher education budget and possibly invite foreign investment for a full-fledged University on island. America’s strength is due to the universities and colleges founded by its forefathers in the 17th and 18th centuries. Why does everyone have to send their children abroad for a college degree?
A bigger problem is the denial about the inadequacy of higher education in our youth. Getting a high school certificate/diploma does not make you qualified to hold professional occupation. In UCCI and SMU there are more foreign students than local ones which shows the lack of importance afforded to higher education in the country. The examples of Zimbabwe and South Africa in this century are before us. If only we could heed.
Johnny
In principle,what you have said carries some truth to it but does not tell the entire story.
As a young college graduate accountant some years ago, I worked for the CI Government and was very well aware of the inadequacies of the government accounting system and staff at the time.
At the same time, we young degree graduates coming into the system encountered an entrenched civil service personell in both the Treasury Dept. and Auditing Depts. that had no university degrees or professional expertise but were ‘in the job’ and fiercely protective of their positions.
I can guarantee that some of those same people are still doing government accounting jobs and are no better or more qualified now than they were then.
As recently as 2008, when I last lived in Cayman for a short while, I applied for a governemnt accounting role that was advertised and for which I was more than qualified and knew that I was wasting my time when encountering the person to whom I had to submit the application.
What Tiger has been pointing out is the cases of the ‘qualified and educated Caymanians’ who are systematically denied the right to work in their own country….
Not unqualified, uneducated Caymanians who are used as an excuse to justify the granting of work permits to expatriate professionals.
Both unqualified Caymanians and qualified expatriates have been given jobs that qualified Caymanians should have first preference to.
My unique experience and take on the matter tells me that it is Caymanians doing this to other Caymanians.
An expatriate work-permit holder is just another pawn in this elaborate scheme of which, for most part, they know nothing about.
They are usually only too happy to have gotten a job and been granted a work-permit to work in the Cayman Islands.
Unless and until this changes, the universities and colleges, whether abroad or local can turn out as many degreed and professional Caymanians as they like.
All you will end up with is that many more unemployed, qualified, professional Caymanians.
I no longer live in the Cayman Islands because I’m simply not prepared to have a work-permit holder scoff in my face of his/her superiority over me because he/she has a’work-permit grant’ job to keep me out of having the same job for which I am as qualified as or he/she is.
I’ve moved on….
Firery:
You have "hit the nail on the head".. there are persons in high ranking positions who do not have a clue of how to manage the financial accounts; they fear "new blood" as it would expose them and maybe was is hidden… this is not a Cayman problem only.. but in the current economic climate of this country where CIG has just borrowed 185million, who wil track where this money goes… suggestion.. better we form a line for a bailout behind Ireland