Financial reports in Cabinet 'bottleneck'

The release of government financial statements and annual reports that provide valuable information about the operation of public agencies is being delayed, in some cases for a year or more, by the Cayman Islands Cabinet, according to Auditor General Alastair Swarbrick.

Mr. Swarbrick was asked during a Public Accounts Committee hearing last week whether the financial statements were going through some sort of “bottleneck” prior to their being tabled – made public – in the Legislative Assembly.

The auditor replied that once his office signs off on the final reports, they are then presented to Cabinet for review prior to presentation in the Legislative Assembly. “That is where the bottleneck occurs,” he said.

“The question is whether that is all necessary,” Mr. Swarbrick said. “There must be a quicker way to do it.”

The auditor general’s office reported last October that while government agencies were starting to do a better job of turning in annual reports with financial statements attached on time, timely public reporting of those matters was still eluding the government.

According to Mr. Swarbrick, for the government budget year ending June 30, 2012 – and as of October 2014 – reports for only 15 of the 24 statutory authorities and government companies evaluated by the auditor general’s office had been tabled, or made public, in the Legislative Assembly.

For fiscal year 2010/11, eight reports from the public authorities are still outstanding, he said. Government ministries fared better, with just six financial statements/annual reports outstanding from the 2010/11 and 2011/12 government budget years.

“Without annual reports, it is almost impossible for stakeholders, legislators and citizens to understand how public resources have been used and to hold government and public bodies accountable,” Mr. Swarbrick said.

Finance Ministry Chief Officer Ken Jefferson told the Public Accounts Committee that there is a legal requirement under the Public Management and Finance Law to submit financial statements and annual reports to Cabinet within a four-month period following their completion and a further requirement to submit those reports to the Legislative Assembly in a timely manner.

In practice, the statutorily mandated time lines stated in the public finance law are frequently not met.

“And if you miss them? What is the penalty?” George Town MLA Winston Connolly asked Mr. Jefferson during the committee meeting.

Mr. Jefferson said section 76 of the Public Management and Finance Law sets out general penalties, including fines and prison sentences, for knowingly or willfully disregarding the law.

“But I don’t believe the law speaks [directly] to whether there are penalties … for not complying with the [reporting] deadline,” he said.

“No penalties, so no real stick to get the reports before the LA,” Mr. Connolly said.

Mr. Swarbrick suggested that some public authorities might wish to make their own financial reports and year-end statements available on government websites, but they are currently prevented from doing that until the documents are formally tabled in the Legislative Assembly.

When the Legislative Assembly has not met for several months, the public reporting process can be slowed as well, he said.

“It puts in extra steps that slow the process,” he said.

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