Ministry financial statements disclaimed again
Two government ministries were recently given disclaimers of opinion on financial statements they submitted for review, Auditor General Alastair Swarbrick told Public Accounts Committee members Tuesday.
The statements, for the Ministry of District Administration during the government’s 2011/12 budget year, and for the Ministry of Tourism and Planning in the 2012/13 budget year, were completed more than five years after former Auditor General Dan Duguay first identified widespread problems with inaccurate or absent government financial records that made the accounts impossible for auditors to review.
A disclaimer of opinion refers to financial records that cannot be relied upon in any way. Essentially, auditors could not decipher the financial statements the government ministries submitted.
This has been a common problem since the advent of the Public Management and Finance Law and the accrual accounting system in the Cayman Islands government more than a decade ago, but Mr. Swabrick said there have been some improvements in recent years. However, while timely financial reporting is now the government-wide standard, Mr. Swarbrick said the quality of the records provided is still poor in many cases.
“Ultimately, accountability is not delivered until we get the entire public sector [report] delivered in a timely manner,” Mr. Swarbrick said. “We’ve received the audits by the time line, but there’s still an issue with quality.
The Cayman Compass reported earlier this year that the government’s first full set of statements in a report for the entire public sector, including central government, statutory authorities and government-owned companies, was completed for the 2010/11 budget year. That report also received a disclaimer of opinion.
“There’s still a ways to go to achieve that full accountability that we all crave and want,” he said.
Deputy Governor Franz Manderson, who is responsible for the civil service, largely agreed with Mr. Swarbrick’s statements in the committee, although Mr. Manderson put a more positive tilt on matters.
“We have come a long way in the last four or five years … when the accounts were really in bad shape,” Mr. Manderson said. “Many more [government entity] audits coming out [now] are clean.”
The difficulty, to some extent, involves the training and expertise of government’s chief financial officers and their staff, Mr. Manderson said.
He said efforts are under way to identify the right people for those important positions, particularly the chief financial officers, within the civil service.
“We need superstars, we don’t need OK people,” he said. “The good news is that we’re getting them at the CFO level now, but we are still struggling to Caymanize the whole cadre.”
Mr. Manderson lauded the recent appointment of two younger Caymanian certified public accountants to chief financial officer positions in the civil service as a step in the right direction.
Ministry of Home Affairs chief financial officer Vinton Chinsee agreed with Mr. Manderson during Public Accounts Committee testimony that training and “capacity” of current civil service finance-related positions is not “up to scratch.” Mr. Chinsee said chief financial officers are often constrained by the “hands [they] have on deck and [employee] skill sets.”
Mr. Chinsee also said some problems were being caused by a top-down management style in the government hierarchy.
“You’re giving somebody [responsibility] for staffing and then you’re telling them, OK, don’t hire the staff that you need, hire someone who doesn’t have the skill set … for instance, social employment,” Mr. Chinsee said. “You also have to give [government managers] the authority over those resources. We do have problems with that at times in terms of chief officers, department heads and senior managers being able to take decisions and do what is necessary to get the job done.”
Mr. Chinsee, who is not Caymanian, has a 30-year background in accounting, project management and business consulting. Recently the renewal of his government contract was questioned by lawmakers during proceedings in the Legislative Assembly. Legislators asked why the chief financial officer in the Ministry of Home Affairs was being hired over two Caymanians who had applied for the position.
Ministry of Home Affairs Chief Officer Eric Bush said Mr. Chinsee’s contract was renewed for another two years because he was the person best suited for the position.