Auditor: Gov’t financial reporting system has failed

Swarbrick wants to simplify reports, deputy governor isn’t so sure

Although Cayman Islands government entities are now reporting financial statements in a more timely manner, Auditor General Alastair Swarbrick said Tuesday that “continuing deficiencies” in getting useful financial information to local lawmakers and the general public has never 
been achieved.  

Mr. Swarbrick’s comments come as part of a 34-page report recommending an entire restructuring of the government’s financial management system, which include scrapping many of the requirements of the territory’s Public Management and Finance Law.  

“The audited consolidated position for the whole government has never been publicly reported in over eight years, leaving legislators and citizens with no reliable information on how government has generated and used significant public resources,” Mr. Swarbrick noted in his report.  

Because of this, the over-arching objectives of the Public Management and Finance Law – essentially credible records of government stating what it does with the public’s money – were never achieved “in any meaningful way”. “At present it is my view that there is a significant risk that the government will ever complete this journey,” Mr. Swarbrick said.  

One of the most significant gaps contained in government financial reporting was identified in the “executive transactions” area. Those transactions, which are direct expenditures by Cabinet, are only reported through consolidated financial statements for the government’s entire public sector. However, those entire public sector reports have never been done since the advent of the Public Management and Finance Law in 2004.  

“Therefore, there has never been any accountability for these transactions and balances since the introduction of the [law],” Mr. Swarbrick said. “For over eight years, government has not provided any audited information to the legislature or the public relating to the actions taken and spending of public funds by the governor in Cabinet.”  

Executive transactions include a diverse collection of programmes including government scholarships, poor relief payments and nation building fund payments, among others.  


Simple versus transparent  

The auditor general recommended that the financial reporting system be simplified to a great extent, in some cases lessening the financial detail that is provided to both lawmakers and the general public.  

“[The reports] should contain enough information for analysis, but not too much detail,” Mr. Swarbrick said. “Users should not be intimidated by massive amounts of detail, when they simply need a financial overview.”  

For instance, rather than requiring each ministry or portfolio within core government to publicly report separately their own financial statements, the auditor general recommended that one set of financial statements could be produced for the entire core government.  

Deputy Governor Franz Manderson objected to this proposal.  

Mr. Manderson, who is the head of the civil service, said the public has a right to know – in detail – what money is being spent on their behalf and what government is getting out of it.  

“One financial statement to the Legislative Assembly could seriously undermine that requirement,” the deputy governor said. “I need a measurement regime that has more than a financial component. Any changes to [the law], should not reduce the accountability of my chief officers for the proper management of the financial affairs of their ministry.”  

“We should publish more information about what we are doing both in financial and performance terms, not less,” Mr. Manderson said.  

Both the auditor general and the deputy governor agreed that quarterly financial reporting across government was needed, even though it had been eliminated from the law in 2011. Mr. Manderson, in fact, said he supported monthly financial reporting.  

Mr. Swarbrick did recommend more specific reporting across government entities including the publication of travel and related expenses, hospitality and gifts received by ministers, senior managers and government-appointed board members. He also recommended regular publication of remuneration for each minister, board member and senior official. 


IT system   

The auditor general’s report also revealed that the government’s main computerised financial system, operated by Oracle Financials and often referred to as “IRIS”, is now outdated and needs an upgrade.  

Oracle Financials has indicated it will no longer support the operating system being used by government, starting in November. “IRIS, in its current configuration, is not managed effectively and does not support the financial community in carrying out its primary role for managing and recording government’s financial transactions … to facilitate accurate and timely financial reporting,” Mr. Swarbrick wrote.  

According to the auditor general, a “large investment” is being contemplated by the government regarding upgrades to the computer system. How much that will cost has not been revealed. 


Mr. Swarbrick


  1. So they are just stealing the money and spending it on anything they want? Again. And your asking them to stop? Again? Without enforcement of the laws there is NO laws. Again. Some one needs to be held accountable. And at least fired if not arrested. No new training. Or next year just more of the same lame stuff.

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