Gilbert Connolly occupied a hot and uncomfortable seat on Thursday, facing a barrage of questions from legislators about potential fraud and misappropriations at the Tourism Attraction Board, pursuing alarms raised by the auditor general.
The CEO of the board, which oversees Pedro St. James, the Queen Elizabeth II Botanic Park, Pirate’s Week, the Cayman Craft Market and West Bay’s Hell attraction, faced sustained inquiries from the Public Accounts Committee into two “secret” bank accounts, funding levels, staffing and internal controls.
The questioning came in the wake of Auditor General Alastair Swarbrick’s six-point “qualified” opinion in March on the board’s accounts, following four years of “disclaimers” – indicating insufficient information to conduct a proper audit.
The committee grilled Mr. Connolly about a series of problems identified seven months ago, as Joey Hew, George Town MLA and councilor in the Ministry of District Administration, Tourism, Transport and Infrastructure, asked what the terms “seriously deficient,” and significant risks of “fraud and error“ meant.
Mr. Connolly said the Tourism Attraction Board had hired a private accounting firm to address internal problems, and that he was developing a manual to advise staff on proper conduct, indicating it “would have a significant impact on the issues.”
Committee Chairman Roy McTaggart pointed to two “outside TAB records” and a lack of supporting documentation tracking cash transactions at the board. “Cash is fundamental to any operation,” the former KPMG managing partner said. “How could these be outside?”
The CEO explained that two private donors, under the name “Friends of the Park,” had set up private bank accounts, depositing cash “to facilitate special projects“ at the Botanic Park, “practically funding an entire garden at the park.”
“Once the funding is completed,” he explained, “the assets are transferred to the TAB, so we have the benefit of the funding, but they do not want the government or the TAB managing [the accounts].”
The anonymous donors “do not want to co-mingle with government funds, and they are absolutely not making donations if they are to TAB or government, so we have separated them,” he said.
Mr. Connolly sparred with committee members McKeeva Bush, West Bay MLA and former premier, and Winston Connolly, George Town MLA and Ministry of Education councilor, who posed a host of questions regarding management of the accounts, signing rights and general accountability.
“I’ve never heard anything like it,” Mr. Bush said. “How do signatures get on there? How is it done?”
“If government does not know this money exists,” the councilor said, “the government could use it to offset [its own costs]. Core government should know the source of the funding, the amounts, and who it is.” The issue, he said, “is good governance and responsibility.”
The CEO told Mr. Bush, “I can’t answer,” explaining that “an accounting officer at the park inadvertently put the [two private] accounts into the TAB accounts, and that’s how all this came about.
“These do not represent assets of the TAB. The auditor general thought they should. Only after the funds are expended do the assets become part of the TAB,” he said, pointing out that since the report, the two board officers who tracked the accounts had been removed.
He denied any improprieties at the board, although he acknowledged “a situation” at Pirate’s Week when Mr. Swarbrick “found seriously lax procedures,” but, he said, “there were no findings of fraud.”
Mr. Swarbrick moved to correct the impression: “Our findings were indicative of fraud and misappropriation, but without further information, we could not complete [the report].“
A “full internal audit review” of the Tourism Attraction Board would start this month, Mr. Connolly said, “and will address further issues.”
“We have some serious problems, but we are taking step to address this,” he said, expecting the manual, the internal audit and “our own procedures” would eliminate problems. “That is a matter of priority,” Winston Connolly told the CEO. ”Money, revenues coming in, Pirate’s Week, all the public-facing. The public would be a lot more comfortable if they knew that proper systems were in place.”
“I agree, Gilbert Connolly replied, “and will urge the board to put these measures in place.”