Twenty-four public sector entities overseen by the Cayman Islands government lost a combined total of nearly $25 million on their operations between 2010 and 2012, according to figures made public Tuesday by the auditor general’s office.
However, the $25 million figure may be misleading since government actually spent about $310 million in what it considers “output revenues” to run those authorities during the three-year period.
That “output revenue” is listed as a government subsidy in annual reports by the government Economic and Statistics Office.
For instance, one of the biggest losers on a yearly basis during the period was Cayman Airways, the national airline. During the government’s 2009/10 budget year, the airline showed an operating loss of $10.4 million, according to the auditor’s report. However, that loss did not include $10.5 million in revenues from the central government coffers provided by Cabinet at the beginning of the budget year.
In the next year, 2010/11, Cayman Airways’s operating losses dipped to $4.86 million. However, its initial “output revenue” from the government rose to $15 million.
In total for the three-year period, the airline showed about $19.5 million in operating losses and required an additional $41 million in subsidies from Cabinet – making the airline’s total subsidy during the three-year period close to $60 million.
Cayman Airways was not the only government-owned company or statutory authority losing money during the period, as evidenced by this chart.
The Cayman Turtle Farm rang up operating losses and debt repayments of about $24 million between 2010 and 2012. The tourism facility has averaged annual losses of between $7 million and $10 million since its expansion in 2005-2006.
Other public sector entities reported profits in certain years, but actually received far more in government funding. For instance, the Cayman Islands National Insurance Company reported a $3.5 million profit in 2010, but the amount it received in government revenues that year was nearly $20 million. Similarly, the Cayman Islands Health Services Authority stated a $6.2 million profit for 2010, but received $29 million in “output revenues.”
Auditors also expressed concerns about other public sector entities that had consistently made money in past years, but whose fortunes of late seemed to be fading.
The Cayman Islands Port Authority made a small profit in 2011 and 2012, but reported financial losses in 2010 and in 2013. The Cayman Islands Maritime Authority, while reporting relatively small losses, did not make any money between 2010 and 2012, largely because government drastically cut its subsidy to the operation.
“Ten entities reported [an operating] deficit for the year ending June 30, 2012, with at least six of them under significant financial strain,” Auditor General Alastair Swarbrick said. “A number of others, while not having any immediate challenges in meeting their obligations, [show] warning signs of potential future challenges if action is not taken.”