Auditors ‘disclaim’ financial statements
The former Ministry of Tourism,
Environment, Investment and Commerce’s reports on its financial activities
between mid-2006 and mid-2008 were so inadequate in some areas, government
auditors were forced to admit they couldn’t perform a review of those areas or
vouch for their accuracy in any way.
Last week, Auditor General Alastair
Swarbrick’s review of the ministry’s financial statements was released in the
Legislative Assembly with a disclaimer of opinion attached; audit-speak for: We
can’t make heads or tails of it.
For instance, one area not
contained in the information provided to auditors by the ministry was the
number of key management personnel employed there during the 2006/07 government
budget year. Those figures also did not state how much those key management
personnel were paid, auditors said.
“We don’t know how many, we don’t know
how much they were paid, and it’s not our job to go find out,” said Audit
Manager Martin Ruben when questioned about the report by the Caymanian Compass.
“We don’t put together these financial statements for the ministries.”
The Ministry of Tourism’s financial
statements were two of more than a dozen where the auditor general was forced
to issue a disclaimer of opinion between 2004 and 2009 for various government
ministries and portfolios, as well as statutory authorities and
In response to the audits, the
following statement were written for both the 2006/07 budget year and 2007/08
year: “We were not a part of the ministry/portfolio during the fiscal year as
chief officer and chief financial officer and as such we were not responsible
for, and therefore could not ensure appropriate internal controls were
established and maintained throughout the fiscal year.”
The statement was signed by current
ministry Chief Officer Carson Ebanks and Chief Financial Officer Wendy Mazanares.
Both were brought into the ministry following the election of current minister,
Premier McKeeva Bush.
Since the 2009 elections, the
ministry has also reorganised to become the Ministry of Finance, Tourism and
Development, with responsibility for different areas.
Former Tourism Minister Charles
Clifford was contacted by the Compass about the state of accounts under his
“I was never given any indication
that there was a record keeping issue that could potentially affect future
audits,” Mr. Clifford said in a statement. “However, because these are
administrative functions these questions ought to be directed to the senior
civil servants in the Ministry.
Mr. Clifford also pointed out there
were some difficulties in the hand-over of the ministry office during 2009 that
could have affected record-keeping.
“I know that the current minister
who is also the premier refused to move into his office until certain senior
officers were removed from the Ministry, so I doubt that there was any
opportunity for a proper hand-over or transition with senior civil servants,”
Mr. Clifford said.
Among the areas where auditors
found shortcomings in the 2006/07 financial statements included:
Revenues of $2.5 million for
services provided were unverifiable, according to Mr. Swarbrick.
A workers benefit expense account
of $306,000 could not be audited because of “insufficient information”.
A end year cash balance of more
than $1 million could not be verified.
Employee entitlements also were not
kept track of: “The financial statements did not include an accrual for comp
time for the ministry. The schedule provided was not complete for accrued
vacation leave and omitted the accrued vacation leave for a particular
In 2007/08, issues with cash balances,
personnel costs and employee entitlements continued.
In addition, auditors did not
receive supporting documents that would allow them to verify the ministry’s net
worth for the year or the accuracy of the ministry’s cash flow statements.
Mr. Ruben said the former Tourism
Ministry’s audits for 2006/07 and 2007/08, as well as many others that have
been reviewed by the auditor general’s office, called into question the value
of having the government put together financial statements for years long past
and for which information largely was impossible to obtain.
Mr. Swarbrick has also raised this
issue in a 2010 report that indicated government has spent close to $2 million
trying to complete older financial reports; a move which he does not consider
to be good value for money.
Responding to that auditor’s report
in 2010 the Ministry of Finance disagreed. “The government recognises the
importance and value of having current and credible financial information and
is not prepared to ignore the reporting of financial performance over the past
six financial years,” the ministry statement read. “These reports still have
“On the basis of the opinions I
have rendered so far that are currently being finalised up to 2007/08…the
majority of the reports have such significant deficiencies that they cannot be
relied upon,” Auditor General Swarbrick responded. “Their usefulness for decision
making and holding government entities to account is practically non-existent.”