‘Risk of fraud’

Government fuel practices slammed again by auditors

Cayman Islands public agencies have cut down on fuel costs and reduced the number of gas cards issued to employees since a 2010 audit report found widespread potential for abuse within the system used to provide petrol for government vehicles.  

However, Auditor General Alastair Swarbrick said Tuesday that a follow up audit on the same issue, conducted by government’s Internal Audit Unit and reviewed by Mr. Swarbrick’s office, has found that a number of departments still haven’t learned their lesson.  

“The overall control environment has not improved since the previous fuel card audit and the internal controls surrounding these processes still require significant improvement,” Mr. Swarbrick quoted the Internal Audit Unit as stating in its follow up report on the gas card system.  

The lack of controls has left government’s distribution of fuel “at significant risk of abuse and fraud”, the auditor general said.  

“[The Internal Audit Unit] states that it is ultimately the responsibility of the management in each of the individual agencies to manage fuel cards and their usage and ensure that they are only used for legitimate government business,” Mr. Swarbrick noted. “This is clearly not happening.”  

The internal audit review of 378 active driver fuel cards being used by 10 Cayman Islands government agencies found that 97 of those cards – more than 25 per cent – were assigned to ex-employees. Another 68 cards, or about 17 per cent went to employees that auditors said had “no business need for a [fuel] card”.  

In addition, the audit review between July 2009 and June 2010 revealed that there had been 346 fuel purchases within that period which occurred less than one hour apart from each other; some of those purchases exceeded the vehicle’s fuel tank capacity.  

Audits discovered 116 fuel purchases during the period where a vehicle card was used twice in the same day.  


How the system works  

Government agencies utilise the Department of Vehicle and Equipment Services petrol station in the Industrial Park area of George Town to gas up their vehicles. The operation is open 24 hours, seven days a week and the gas pumps operate only via fuel cards assigned to each vehicle in tandem with a separate gas card used by an employee. A government worker must “swipe” both the vehicle and employee cards and enter a personal identification number. The employee also generally enters a vehicle odometer reading on the fuel pump keypad, although this step is not mandatory.  

The computerised fuel purchase system used by government is known as GASBOY.  

The first audit of government fuel card usage spanned a period from January 2008 and March 2009. It reviewed fuel card usage by the five largest user departments in government. The second follow up audit not only looked at whether those five departments has improved fuelling processes, but reviewed a further 10 government agencies to see if they had any issues with fuel card usage.  

“Leadership is missing,” Mr. Swarbrick wrote. “Without appropriate action by senior government officials to communicate expectations on a government-wide basis, there will be an ongoing risk of abuse and fraud in the use of fuel from the Department of Vehicle and Equipment Services facility.”  


The good news  

Following the initial review of fuel card usage by the Royal Cayman Islands Police Service, the Department of Environmental Health, the Water-Authority Cayman, the Public Works Department and the National Roads Authority; it appears most of those agencies – as well as some others – significantly reduced their fuel consumption.  

Most entities also significantly cut down on the number of fuel cards assigned to employees and gas cards assigned to vehicles as well.  

“During the period covered by the second phase audit [July 2009 to June 2010] the average monthly consumption was $128,990, a decrease of $39,586 monthly or $475,032 annually,” auditors noted. The number of active employee fuel cards went from 1,606 to 1,164 during the period, while vehicle fuel cards dropped from 1,205 to 1,005.  

Both the National Roads Authority and the Department of Environmental Health cut monthly fuel usage by more than $11,000, according to the report.  

“These findings indicate that the agencies reviewed by the Internal Audit Unit took action to address some of the issues identified in [the] May 2009 report and, by doing do, reduced their consumption considerably,” Mr. Swarbrick said.  


The bad news   

Following its first review of the government fuel card system, the Internal Audit Unit opined that “drastic improvements” were needed for the gas card process.  

The unit highlighted 11 areas where “control weaknesses” were identified by the five agencies initially reviewed. “When we reviewed their work, no response had been received from RCIPS or the Department of Environmental Health,” Mr. Swarbrick stated. Auditors asked for a status update in March and received one from the police service; apparently nothing was received from environmental health.  

The auditor general’s review found that none of the agencies had documented policies governing fuel card management and usage, even though that was one of the strongest recommendations made in the internal audit report. Three of the departments had fuel cards assigned to vehicles that were not found in the agencies’ list of active vehicles. Three of the agencies had an incomplete employee name and vehicle description in the GASBOY system.  

Auditors concluded that while most of the initial five agencies reviewed had taken some actions to implement the Internal Audit Unit’s recommendations, there was no evidence that action had been taken to strengthen internal controls to prevent the possibility of fraud or abuse within the system.  

Mr. Swarbrick recommended that a “fundamental review” of the need for some agencies and government employees to have fuel cards. For example, the government’s Freedom of Information Unit has three employee cards and three vehicle cards but only spent an average $3 per month on fuel between July 2009 and June 2010.  

Auditors also recommended the creation of standardised policies for fuel usage across government entities. This work should be assigned to “a responsible official” within government, Mr. Swarbrick said.  


The ugly news  

The 10 government agencies reviewed as part of the second phase of the Internal Audit Unit’s report included: the Department of Agriculture, the Mosquito Research and Control Unit, the Health Services Authority, the Recreation, Parks and Cemeteries Unit, the Department of Environment, the Department of Education Services, the Prison Service, the Cayman Islands Airports Authority, the Planning Department and the Customs Department.  

The audit unit’s review stated: “Internal audit concludes that the overall control environment has not improved since the previous fuel card audit and the internal controls surrounding these processes still require significant improvement.”  

Of the 10 agencies reviewed, eight did not have documented policies and procedures governing fuel card usage and management.  

None of the agencies required fuel card holders to sign a fuel card usage agreement, according to the Internal Audit Unit.  

28 employees were found to have more than one active driver fuel card. 

Odometer readings were not entered for each fuelling by most users.  

There was no active monitoring of fuel transactions by any of the agencies, according to auditors.  

“The unit identified a number of transactions, some of which may have been caused by legitimate reasons … but which should have prompted agencies to conduct further review and investigation,” auditors concluded. 


  1. What a waste of government monies. Give every Tom, Dick and Harry a gas card and what would you expect to happen.

    Abolish the old system and create a new system that simply has a log book for each vehicle and the gas cards get signed out on a need to use basis.

    Create something, anything that has a semblance of a check and balance. Quit wasting money and fire the rats that abused the system.

  2. We wonder when the Auditors will also get a hold of the ‘need’ for official vehicles to be used as personal transport. We don’t believe that the driver of every official vehicle is ‘on call’ 24/7, which certainly seems to be the case. Who pays for the gas used in these cases? Answer, the public.

  3. The only government employees who should receive gas cards are those who are driving a government owned vehicle, such as a police car, ambulance etc. And these should only be usable during the day and when someone is in attendence at the government gas station. Of course the milage should be required to be entered on the pump.

    The above will prevent a police officer (for example) filling his wife’s car or his boat with gas the public are paying for.

    Everyone else should pay for their own gas and submit the bill for reimbursement. However they should only be reimbursed for justifiable business milage, on a percentage of total miles driven. A log book should be kept to obtain reimbursement with odometer readings of course.

    My bet is that would cut fraud out almost completely.

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