Surprising turnaround from recent years
For the first time in several years at least, Cayman Islands statutory authorities and government-owned companies have reported a small profit from overall operations in the budget that ends on 30 June.
Those groups comprise approximately 25 entities that are run separately from the Cayman Islands government and are typically managed by appointed boards or commissions. They do not report directly to elected officials or the civil service, and in most cases the entities provide at least some of the funding for their own operations.
When they don’t make ends meet, government has to provide additional direct funding for their operations.
According to unaudited actual figures and estimates from previous budgets, taxpayers have subsidised the public authorities to the tune of more than $16 million in 2007/08 and $11 million in the 2008/09 fiscal year.
In the current budget year, 2010/11, the 25 public entities reported an overall profit of about $1.8 million, according to budget estimates released this week.
Those results included reports of profits amongst authorities and companies that historically have not been particularly profitable; including a reported $1 million profit for the Health Services Authority.
Some lost money
Some authorities or government companies did lose money in 2010/11, most notably a $9 million operating loss at the Cayman Turtle Farm, a $2.4 million reported loss by the Cayman Islands National Insurance Company and a $782.000 loss at the National Housing Development Trust. Despite those losses, other money-making authorities and companies managed to make up the slack to reach the overall profit.
The $1.8 million boost was credited in part for government ending the year with an estimated $4.5 million budget surplus – which means government took in more money than it spent for the year. It is the first time that has happened in three years, according to financial records.
Gloomy forecast
The upcoming budget year is not expected to be so kind to statutory authorities and government companies.
“The net result of statutory authorities and government-owned companies is forecasted to be a deficit of $8.4 million,” government budget documents projected for the current year.
According to estimates, loss leaders are expected to be the Turtle Farm ($7.61 million), the Cayman Islands National Insurance Company ($3.30 million), the housing trust ($1.9 million), Cayman Airways ($1.3 million) and the Health Services Authority ($1.1 million).
“These losses are partially offset by profit-making agencies such as the airports, civil aviation and the port authority,” budget documents indicated. Additional payments of $1.9 million are due to the Turtle Farm to pay off debts, and some $5.1 million is budgeted to help Cayman Airways settle up part of a $50 million historical debt it owes the government.
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