Despite government doing its “level best” to fix difficulties tracking official travel and hospitality expenses, problems revealed in last year’s audit on that spending could happen again, a senior government official said Wednesday.
Planning Ministry Chief Officer Alan Jones told the Legislative Assembly’s Public Accounts Committee that while a policy on reporting official travel expenses has been in effect within the civil service since mid-2013, that policy only voluntarily applies to government’s elected ministers.
Moreover, there is still no policy whatsoever governing hospitality-related spending that affects either the civil service or the elected arm of government.
The 17-page travel policy, made public in July 2013, seeks to reduce the demand for official travel by Cayman Islands government employees through using other means, such as teleconferencing and Skype. Where official travel is required for government employees to obtain training, the government will determine whether trainers could be brought here or if certain training could be provided through the civil service college on the campus of the University College of the Cayman Islands. When official travel is required, each government department must justify that need via an application for official travel form submitted to the “accountable officer” for each department, ministry or portfolio. Travel for higher-ranking officers must be approved through the deputy governor or the governor.
The policy seeks official travel expenses to be pre-paid as much as possible. In most cases, airfare, hotels, transportation and any conference fees are to be paid in advance. The policy does not set out specific penalties for failure to follow its directives, only that breaches of the policy will result in “disciplinary action”.
Deputy Governor Franz Manderson said Wednesday that the introduction of the policy and government’s vigilance in holding travel expenses in check had saved Cayman about $1 million over the last two budget years.
Mr. Jones, while acknowledging that something of a “change of culture” had occurred in recent years within the civil service relative to travel expense monitoring, noted that the current situation can put chief officers in a difficult spot when it comes to minister’s expenses.
“The premier said [the civil service travel policy] has been adopted, but it does beg the question whether we need a [separate] policy for Cabinet and councilors,” Mr. Jones said. “Until such time as we have a travel policy for the political arm, we’re going to have some issues.”
In addition, Mr. Jones said the current personnel regulations that govern reimbursement for public employees who spend money “in the course of their duties” would appear to make it legal, at least in some instances, for government ministers and chief officers to approve their own travel expenses.
“It would appear to me that the regulations permit the chief officers and/or the minister to approve their own travel claim, with the proviso that it meets [certain] criteria,” Mr. Jones said.
As far as hospitality spending, official entertainment and the like, there is no consistent policy with regard to how those expenses should be approved across government.
The travel and hospitality audit covered only core government expenses in those areas between July 2009 and December 2012 during the period managed by the former United Democratic Party administration.
It looked at some $8.6 million in travel and hospitality expenses during the period to determine whether that spending produced value for money. In many cases, it found spending in those areas to be questionable or, at least, not managed properly.
For example, in 80 sample expenditures reviewed by the auditor general, about half lacked necessary supporting records to show what was being paid. In eight of the cases, no supporting records could be found. In the area of travel advances, some $32,000 provided by government to one employee had to be “written off” because the financial officer in charge of approving the expenses did not know whether the employee had traveled at all and, if he had, could not show what the money had been spent on. A total of $167,000 in travel advances to that particular ministry had to be written off because of similar issues with lack of supporting records.
About $458,000 in travel and hospitality expenses by government were charged to credit cards that were later paid off by finance officers who had not received sufficient receipts to show what the cards had been used to pay for. One minister – who was not identified in the report – apparently self-approved $71,000 in such expenses.
The audit found “very little information” about some $1.5 million government spent on hospitality during the period.
“There is no excuse for the issues we have found and whilst it may be indicative of just poor management and administration, it creates the perception, at least, of the misuse of public funds,” Mr. Swarbrick wrote.
Deputy Governor Manderson said he has requested the government’s Internal Audit Unit to perform a follow-up audit on travel expenses, to ensure those are being monitored properly. He expected that work would be complete later in the year.
In addition, Mr. Manderson said the Portfolio of the Civil Service was drafting a policy on hospitality expenses that he hoped to have completed within the next 30 days. “[The hospitality policy] should have been done a long time ago, I don’t have any excuses for that,” he said.
With regard to minister’s travel spending, Mr. Manderson said civil servants had “very little control” over ministers, who are governed by the premier and the general public. Mr. Manderson said a government chief financial officer who is given a travel invoice for a minister that does not comply with the policy should report it to their chief officer, who would then take it to the minister or the premier.
One chief officer, Vinton Chinsee of the Ministry of Home Affairs, said he had adopted the policy in his own ministry of docking officials’ pay if they didn’t provide receipts for travel expenses within a certain period of time, including ministers.
Mr. Manderson said he didn’t necessarily approve of that approach.
“I’d like to see the current procedure followed, rather than taking it out of people’s pay,” the deputy governor said. “I’d rather take it up the chain of command. I think we should try to fix the problem. We should hold people to account and take action when they don’t provide receipts.”