Editorial for 26 June: Auditor general: Dump the system

Auditor General Alastair Swarbrick has gone far beyond
simply issuing another damning report about the inadequacies of government’s
financial statements and recommends a wholesale restructuring of government
itself.

While some government departments and agencies are reporting
financial statements in a more timely manner, the entire public sector’s
expenditure hasn’t been known for more than eight years.

Interesting to note that a huge gap in financial reporting
comes under the area of executive transactions, which are the direct
expenditures by Cabinet. For eight years, at least, there haven’t been audits
of government spending on such things as the nation building fund, government
scholarships, poor relief payments, medical care and more.

It is a disgrace – not to mention an embarrassment – that
the Cayman Islands, which is one of the most sophisticated financial centres in
the world, can’t get its financial records credibly completed in a timely
manner.

Government has access to a myriad of professional financial
resources within walking distance from the government administration building.
It is a shame that it continues to rely on people within government who don’t
seem to understand the current accounting system.

We don’t necessarily agree that the accounting method within
government is the issue. Rather, we believe that there are people using the
method who don’t have a clue as to what they are doing; including some senior
managers.

This most recent report does suggest a change be made to the
Public Management and Finance Law of 2004.

Basically, the auditor general wants to see government’s
financial reporting system simplified. He believes that those who are using the
system are overwhelmed by requests for too much information and that a more
basic system in the form of a simple financial overview would work.

Deputy Governor Franz Manderson disagrees. His take is that
lawmakers and, indeed the general public, should know in detail what money is
being spent and what government is getting for those expenditures.

That’s a great idea, but it isn’t working. As Mr. Swarbrick
said Tuesday, government hasn’t been accountable for the last nine years under
this system anyway.

Like most of the reports coming out of the auditor general’s
office, this one does have recommendations on how to fix the problem. There
have been many great reports from that office on addressing issues and offering
solutions including reports on the Turtle Farm, overseas medical expenses, gas
card usage by government employees and more.

The reports go directly to members of the Legislative
Assembly and Cabinet. Too often, they are ignored.

Unfortunately, the auditor general’s office has no
enforcement powers; it can only make worthy suggestions.

We hope that the new government will begin taking the
auditor general’s reports seriously and heed his suggestions, or at least take
the suggestions on board and come up with other viable options to fix the
problems.

They can begin with this latest report, which is aptly
titled “Restoring Financial Accountability, a Time for Change”.

 

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