Gov’t expenditures: ‘Show and tell’ time

Halloween is one of the spookiest times of year for the Cayman Islands public sector, not because of costumed ghouls, but because today marks the beginning of the season for government entities to drop their masks and reveal how they’ve been spending the public’s money.

The Public Management and Finance Law orders ministries and portfolios to submit their annual reports to Cabinet today and mandates that statutory authorities and government companies present their annual reports to the Legislative Assembly within two weeks or at the next sitting of the assembly. The deadline for presentation of central government’s annual reports to the assembly is Dec. 15.

Like dentists’ recommendations that trick-or-treaters go lightly on the goodies, though, the requirements under the law are often ignored.

A new report by Auditor General Alastair Swarbrick shows that fewer than half of government’s 41 financial statements compiled for the fiscal year that ended June 30, 2012, have been made public by tabling them in the assembly. This disregard for the law has become an annual tradition for central government, statutory authorities and government companies.

We won’t elaborate on the obvious risks – including corruption and waste – presented when government flouts the law in order to keep information on its spending hidden from the eyes of taxpayers.

As Mr. Swarbrick tersely explained in his 2012 report on financial statements, “Accountability delayed is accountability denied.”

Dentists can’t make children brush their teeth, and Mr. Swarbrick can’t make government entities follow financial reporting requirements. He can only review records and take note of deficiencies. Even good laws are worthless unless they are enforced.

Ministers and politicians have not demonstrated a willingness to hold civil servants accountable over tardy or incomplete financial records. Granted, lawmakers do have a valid point when they argue they do not have authority over the performance of individual government personnel. Wisely, our country’s government is structured with a division of powers, where, generally, elected representatives have control of the purse strings but not hiring and firing decisions.

That power over personnel rests with Deputy Governor Franz Manderson as the head of the civil service but, according to the Cayman Islands Constitution, only under the authority of Governor Helen Kilpatrick.

It is she who is ultimately responsible for chief officers and other relevant government heads to fulfill their basic functions, including completing and making public the financial statements for their ministries and other entities within legal guidelines.

Ms Kilpatrick is the proper authority figure to ensure that the civil service follows the rules under the law and pays attention to Auditor General Swarbrick’s recommendations, which judging from the proceedings of lawmakers’ Public Accounts Committee, often aren’t taken seriously by government.

The governor highlighted her duty during her throne speech in the assembly early this month. She said, “Good governance, which I am charged to promote, involves careful and planned management of resources, so that we all benefit from their allocation in a sustainable way.”

By delaying the publishing of annual financial statements, the public sector is not being accountable or transparent, and without those two elements good governance is impossible.

Ms Kilpatrick has been in the country long enough now to begin addressing grave inadequacies ingrained in the civil service, such as its slipshod financial reporting. She must not dodge the issue as her predecessors have.

We expect Ms Kilpatrick, with her background in government finance, will take charge of the situation, starting with laying out real consequences for those failing to publish annual reports as the law requires.

In the past the pronouncement has been, “Follow the law, or else.”

Now it’s time for the “or else.” It could be a scary time for public servants.

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1 COMMENT

  1. There are many things that the governor should do. To start with she could stop protecting the people behind operation tempura and allow the public access to all of the information related to this failed operation.

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