An audit completed on Cayman’s public contract bidding has
revealed several instances of political interference in the day-to-day
operations of the procurement process.
Auditor General Alastair Swarbrick said in his office’s
report that the instances of interference in the bid process were creating
“risk, uncertainty and morale problems” in government operations.
“We found evidence that some politicians are not complying
with the procurement rules that have been established… and, in some cases,
contravening the laws and regulations [of the bid process],” Mr. Swarbrick
said. “In other countries, the practice of politicians being involved in the
administration of government’s transactions has resulted in cases of corruption
Mr. Swarbrick expressed concern that limited “checks and
balances” exist when government transactions are conducted outside of the
established bid process.
A management response was requested from the Cayman Islands
Deputy Governor’s office in early June to the specific points raised in the
audit of government procurement. Mr. Swarbrick said his office received some
comments from the deputy governor’s office, but that officials had not provided
responses to the auditor’s recommendations at the time the report was issued.
A separate report on deficiencies auditors found in other
areas of the bidding process can be found on page 9 of today’s paper.
The auditor general’s office did not “name names” with
regard to specific instances where political interference in the bidding process
had occurred. However, the report did list several particular instances where
auditors documented the interference.
“We were told of a number of recent situations when
political interference had created uncertainty and angst among government
employees,” Mr. Swarbrick said.
Those cases included:
In one case, politicians met with middle managers in the
civil service to question the decision they made on contract procurement
Politicians directed the appointment of individuals who were
not government officials to a departmental tendering committee. The government
employees in this case were told they could not participate in evaluating the
bids for a contract. Departmental tendering committees are used in some areas
of government to weight options for publicly bid contracts prior to those
matters going to the Central Tenders Committee, which makes final
recommendations of how contracts are awarded.
In a third case, Cabinet members reviewed the results of a
tendering process and held up the announcement of the winning bidder. During
the delay, politicians repeatedly questioned officials about the decision.
“We found a senior public servant who submitted his
resignation to the government as a last resort to demonstrate his unease with
the level of political override that was occurring and the impacts it was
having on his ability to do his job effectively,” Mr. Swarbrick wrote.
The auditor’s report also stated that three individuals on
the Central Tenders Committee resigned, leaving just five people serving on the
government-appointed board. Other departmental tendering committees also saw
resignations because members simply didn’t want to participate, auditors found.
“We found evidence that public servants no longer want to
participate in the procurement functions,” the report noted.
Political interference was not limited to elected ministers
or MLAs in the operations of central government, the auditor general found.
Two statutory authorities were reviewed as part of the audit
as well. Statutory authorities are public entities that operate separately from
government and are typically overseen by an appointed board. The two
authorities reviewed as part of the audit were not named.
Mr. Swarbrick said board members of those authorities were
involved in day-to-day operations of the bid process – including the
negotiation of sizable contracts with outside entities and suppliers.
“Similar to political override, there are limited checks and
balances for the transactions that are conducted ‘outside’ the administrative
processes in place,” Mr. Swarbrick said. “As a result, there are increased
risks of fraud and corruption associated with these types of transactions.”
Auditors generally recommended that government should
clearly communicate, through either laws or policy, what roles politicians and
board members play in the bid process. Appropriate sanctions were recommended
in cases where transgressions of those roles occur.