Governor favors four-year budget

Cayman Islands Governor Helen Kilpatrick likes the idea of a four-year budget plan, to be formulated at the start of each parliamentary cycle.

The Cayman Islands currently holds general elections every four years. What Ms Kilpatrick envisions is having one general guidance document for the entirety of each government.

“It serves two purposes; one is you spend less time creating a whole budget from scratch every year, and two is … it gives a good financial horizon for departments and public bodies, particularly if you’re having to economize …,” Ms Kilpatrick said during an interview with the Caymanian Compass last week.

The current Cayman Islands government did submit a four-year plan to the United Kingdom, which was approved prior to the start of the 2013/14 budget process. However, that’s not the same as drawing up a four-year spending plan. Premier Alden McLaughlin has already groused about the time it takes each year to prepare for the next fiscal cycle.

“It essentially takes up about nine months of the year to get the budget presented,” Mr. McLaughlin said. “If we can, in some way, reduce the length of time and the resources that are devoted to budget preparation year on year, those resources can be … better utilized in other aspects of managing government.”

One solution that could be considered is found in the Channel Islands, he said.

“It is possible to develop a budget process that isn’t restricted to a single year, as is the case in Jersey. We are certainly looking at the prospect of changing our system so we don’t have to go through all of the tremendous amount of work and effort that it takes.”

Governor Kilpatrick said last week that the United Kingdom was likely to support such a move.

“They do have to review [the budget] every year,” she said. “Four years is actually quite a long time and things move on and things change. However, having your budget reviewed every year doesn’t give you the opportunity to plan.”

No matter what system Cayman eventually ends up using, the governor said it needs to be both simpler and more accountable. The current budget, she said, is more than a bit confusing and not very accountable with regard to what government spending has achieved.

“I can make heads or tails out of it, because I’m a professionally qualified accountant, but the real test is whether the public can make heads or tails out of it,” she said. “It’s fair to say that there’s generally agreement that the current system isn’t as clear, as simple and as accessible as it could be. “It’s a fine balance between so detailed that you get bogged down in it, and then not so general that everybody says you can’t see what’s going on.”

What should be easily explained in any public sector budget, the governor said, is what the government planned to spend at the beginning of the year and then details of what it did spent – and what was achieved – at the end of it.

The difficulty with that now, as the auditor general’s office has pointed out, is one of form, not necessarily substance.

“The budget is in one format and the accounts – such as there are – are in another format,” she said. “[You] can’t follow through into what actually happened after the end of the year.”

Although she is a professionally certified accountant, Governor Kilpatrick said her office will not become involved in the Cayman Islands budget at the policy level. In other words, she won’t tell the locally elected government what to spent its money on.

“It’s not my job to say how much the government should allocate to education, versus employment,” she said. “[I’ll provide] the principles of cookery, but not the recipe for the actual cake.”

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