In early 2010, former Cayman Islands Auditor General Dan Duguay concluded that hundreds of thousands of dollars in petrol pumped from the government fuel depot on North Sound Road may not have been used for job-related functions.
Later today – more than two years since the initial report – auditors will release their most recent review of the Department of Vehicle and Equipment Services’ fuelling station to see if things have gotten better or worse.
A copy of the report is scheduled to be released at 11am today. A copy of the report will be available at www.cayCompass.com.
In the previous report, the government’s Internal Audit Unit looked at the five departments and statutory authorities that accounted for more than 73 per cent of fuel purchases at the North Sound Road facility between January 2008 and March 2009. Those agencies reviewed included the Royal Cayman Islands Police Service, the Department of Environmental Health, Water Authority-Cayman, the Public Works Department and the National Roads Authority.
The Internal Audit Unit’s conclusion – not the auditor general’s – was that a lack of internal controls by the management of these five departments led to the potential for significant fraud to occur with the purchasing of fuel.
“Although testing was only conducted on the top five consumers of fuel from (the Department of Vehicle and Equipment Services), we feel that it is likely that the concerns noted for these five agencies would be seen in most of the other 55 agencies that purchase fuel,” the internal audit unit’s report concluded.
Mr. Duguay, commenting on the previous internal audit report, was a bit more direct.
“In 33 per cent of the purchases reviewed, the (internal audit unit) identified problems that should have been investigated by the organisations involved,” the auditor general’s report read. “These transactions could be viewed as suspicious.”
“The Office of the Auditor General has estimated that as much as $500,000 of fuel annually may be for nongovernmental purposes,” Mr. Duguay’s review concluded.
A number of problems with vehicle fuelling – described as “severe breakdowns in all elements of the control system” – were identified by the auditor general’s office:
Those included: Twenty-six per cent of the fuel cards and drivers cards issued by the five government agencies reviewed belonged to people who were no longer employed with the agencies who had issued those cards; vehicle cards issued by the five agencies could not be found in the records of those agencies; the review of nearly 10,000 fuel purchases during a 15-month period found that the employees or ex-employees using the gas cards only entered the vehicle’s odometer readings about 8 per cent of the time.
“To pinpoint one specific person [who improperly took fuel], we may not have enough evidence,” said Deputy Auditor General Garnet Harrison at the time. “It may still be referred to police.”
Report raises hackles
The man in charge of Cayman’s government fuel depot announced his retirement in 2010, shortly after the Internal Audit Unit/Auditor General’s review was released.
While admitting there “has definitely been some abuse” of the government’s employee fuel card system, former Department of Vehicles and Emergency Services Director Dale Dacres sharply criticised the report which revealed that potential abuse.
Mr. Dacres said that estimates of $500,000 being potentially fraudulently purchased from the government fuel depot in 2008 and 2009 were “not reliable”.
“While there is some merit to audit’s findings to (the) extent that there has definitely been some abuse, the fact remains that the estimated level of abuse is not reliable,” Mr. Dacres wrote in an e-mail message sent to all Cayman Islands civil servants on the CS Messages system.
The Royal Cayman Islands Police Service began a criminal investigation into at least one case where fuel might have been fraudulently taken from the Cayman Islands government depot. The outcome of that investigation was never made public.
Police Commissioner David Baines took issue with Mr. Duguay’s $500,000 estimate as well.
Mr. Baines referenced one case specifically within the Royal Cayman Islands Police Service that occurred over a lengthy period. He told the Legislative Assembly’s Public Accounts Committee in 2010 that the investigation involved some 150 purchases on one fuel card that appeared to be cause for some concern.
However, Mr. Baines said he regarded statements in Mr. Duguay’s report about “suspicious purchases” in 33 per cent of all fuel card purchases between January 2008 and March 2009 as “insulting” to those departments involved in the audit.
“The suggestion here is I’ve got widespread corruption with police stealing gas … regrettably, that’s what went out from the media,” Mr. Baines said, apparently referring to comments made on a local talk radio show.
Neither Mr. Duguay nor Internal Audit Unit staff ever made comments to the Caymanian Compass accusing the police of “widespread corruption” with regard to fuel usage at the government depot.