Government has too many departments?
A government consultant recommended in 2011 that the Cayman Islands review the number of entities created within the public service with an eye toward reducing them.
According to consultant Keith Luck’s review, taking stock of government agencies should probably occur “before more fundamental changes” to government’s financial management system.
“Every separation and boundary introduces cost and complexity,” Mr. Luck wrote in his 115-page report, released last week. “Some could be merged, abolished or re-absorbed back into the parent department.
“I recommend that a review is undertaken with the aim of reducing the number of entities (especially agencies) operating in the Caymans.”
The Cayman Islands government operates or oversees more than 90 central government departments, statutory authorities or government-owned companies.
Mr. Luck did not make specific recommendations as to what departments, authorities or companies could be merged or done away with. However, he noted that a further review of the subject could be done outside the scope of his initial report.
For the entities that remain following the review, the government should seek to process human resources and finance-related duties centrally rather than having each agency or department handle its own budget and human resources functions.
“Decision-making and budgetary control would remain within the agency, but the administration of basic processes would be done centrally to maximise economies of scale and functional expertise,” Mr. Luck wrote.
The consultant’s report noted the complexity of the government’s budgeting and finance model requires employees with the information technology and leadership capabilities to operate it.
“Every subdivision of government into smaller entities increases the potential number of transactions within and across government,” Mr. Luck wrote. “Under the process of ‘rigorous simplification’ … one should ask it all these agencies and entities are all really needed. Are there consolidations that could be achieved?”
Skills and leadership
Mr. Luck’s review did not explicitly examine the skills and capabilities of the government’s financial staff, although he admitted “some interviewees raise this as a potential issue with me”.
“What is obvious is that the complexity of the current system requires finance staff with higher order, more expensive skills,” he wrote. “There is some evidence that the chief financial officers are drawn into detailed transactions as more junior staff struggle.”
This limits the time the senior managers have to advise “non-finance” colleagues on matters that have significant information to the government’s budget.
As has been stated previously, Mr. Luck’s review also noted a “lack of clarity” in leadership of financial management at the “very heart of government”. The consultant noted the 2009 Constitution Order, which changed the position of the financial secretary within government, may have been inadvertently responsible for the mix up.
“[This] has resulted in no one person clearly stepping up to take ownership and set direction,” the report noted.
The chief officer of public finance was the “appropriate lead” for financial matters, Mr. Luck opined, although he said other suggestions could be made to work as well. The question of who is in charge of finances should be resolved, Mr. Luck said.
“I recommend that the financial secretary be given a ‘first amongst equals’ role over his/her other chief officer colleagues on matters financial,” Mr. Luck wrote. The chief financial officers of government entities would then have the professional responsibility to report directly to the financial secretary, according to the report’s recommendations.