When reading the article titled “Luck to help sort finance law” on the opposite page of today’s newspaper, it’s hard not to find the humour of understatement in Governor Duncan Taylor’s assessment of the state of government accounting.
Commenting on the fact that Cayman’s government has not had a full set of audited financial statements since 2004, despite their being required annually by the Public Management and Finance Law, Mr. Taylor said the law was “not functioning as well as we’d like”.
If there wasn’t a smile on his face, there had to be at least a sarcastic twinkle in his eye when the governor made that statement.
Cayman’s difficulties with the PMFL and the deplorable state of government accounting are well documented. There have been those saying for years the problem is an unworkable law.
It seems the governor is beginning to agree with those sentiments, at least enough to bring in some outside help in the form of accountant Keith Luck to review Cayman’s PMFL and Financial Regulations. After six years of frustrations, it’s time we have a review like this.
If Mr. Luck finds the law isn’t workable, it will be interesting to see the reasons for his conclusions. Auditor General Alastair Swarbrick has noted an absence of accounting skills in government departments, which very well could be the root cause of the failure.
Instead of trying to rise to the standards of the PMFL, our civil service has basically said “it’s too hard”. Now, the governor agrees we need to introduce a simpler accounting system, partially because the simpler system is better than having no audited accounts at all.
Some might find the governor’s statement condescending, but the truth is, most of Cayman’s civil servants raised the white flag on the PMFL years ago and Mr. Taylor is only being pragmatic.
Regardless, this failure is embarrassing for the Cayman Islands, a territory that likes to boast about being one of the world’s top financial service centres, but doesn’t seem capable of anything but a rudimentary government accounting system.