Cayman Islands Deputy Governor Franz Manderson said Tuesday that he takes reports of potential abuse of government-issued fuel cards “very seriously” and that the civil service has already taken some steps to correct the issue.
Auditor General Alastair Swarbrick revealed Tuesday that fuel card management problems were discovered in 10 more government departments or authorities between July 2009 and June 2010 during a follow-up audit performed by the Internal Audit Unit.
The first internal audit report, done between January 2008 and March 2009, identified five government entities which had similar problems with fuel card management and distribution.
Mr. Swarbrick said the lack of controls within the management system identified in both internal audit reviews left government open to “potential fraud and abuse”, although he said neither internal audit report identified any specific cases where government-issued gas cards had been used fraudulently.
Mr. Manderson said it made no difference.
“I don’t expect to have another report like this under my watch,” the deputy governor said. “If there’s a report of potential abuse of government funds, we have to take that very seriously.”
The follow-up 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.
There was also some good news. Overall fuel costs for the five government entities reviewed in first internal audit had dropped by comparison when the second review was done.
“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.
Mr. Manderson said a new fuel distribution system for government would likely be introduced next month.
The deputy governor said the new system – replacing government’s current GASBOY computer system – would “require additional discipline by government entities” to realise the benefits of the new system.
Mr. Manderson wrote to government chief officers recently asking that management issues identified in the Internal Audit Unit report on the gas cards be dealt with in a “timely manner”. He said Tuesday that he expected those changes would be made by the end of July.
“There’s nothing [in the report] that should take us too long,” he said.
Draft fuel card usage and user agreement forms have been circulated to chief officers for review as well, Mr. Manderson said.