Luck to help sort finance law

The Cayman Islands government is bringing in some outside advice in hopes of making its often-criticised Public Management and Finance Law easier to understand and operate.

An accountant, Keith Luck, who recently helped the UK Foreign and Commonwealth Office reform its financial and corporate system, has been hired for a similar job in Cayman.

“Mr. Luck’s review will focus on the mechanisms that underpin the financial and human resources management model, including the Public Management and Finance Law and Financial Regulations,” a statement from the government read. “The Integrated Resource Information System (which the government uses to run its HR and financial databases) will also come under scrutiny.”

Mr. Luck is expected to remain in Cayman for most of February to perform the review.

Governor Duncan Taylor said Wednesday that whatever the issues with the country’s current law might be, it’s clearly not working as intended.

Cayman’s government has not had a full set of audited financial statements since 2004, even though the Public Management and Finance Law requires those to be produced each year.

“It’s not functioning as well as we’d like,” Governor Taylor said.

The governor echoed earlier comments made by Auditor General Alastair Swarbrick, who said that certain requirements in the law, such as how government reports what it has accomplished for the year, have very little value. Also, the auditor general recommended the elimination of quarterly financial reports, which most government departments have never done anyway. In its most recent budget, Cayman’s government acknowledged that problems with its accounting 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.

But Governor Taylor indicated his belief Wednesday that the main problem is with the finance law, not with those trying to implement it.

“It the excessive burden of the workload is reduced…I think you’ll find we have some good accounting skills,” he said.

Under Cayman’s 2009 Constitution, responsibility for government finances shifted away from the governor-appointed financial secretary to the elected Minister of Finance. However, Mr. Taylor said, as Cayman’s governor, it is his responsibility to ensure good governance is maintained here – and that includes balancing the cheque book.

“If we can introduce a simpler accounting system for the Cayman Islands…that clearly is going to be better governance than not having audited accounts at all,” Mr. Taylor said.

Mr. Swarbrick, in a recent report presented to the Legislative Assembly, said the information contained in many submitted annual reports, especially those turned in by government ministries, was “useless” for determining financial accountability. The auditor’s office had to issue what’s known as a ‘disclaimer of opinion’ for 12 of the 15 government ministry financial statements submitted between the budget years of 2005/06 and 2007/08. A disclaimer in that context means auditors were not given enough information to conduct an audit.

1 COMMENT

  1. What Cayman needs is Micawbers Law to be enshrined as the first and continuing principle. Individuals may borrow themselves into penury and bankruptcy, but Governments must NEVER do so.
    For those who dont get it, try Googling Micawber.