Following a series of explosive internal audits being revealed in the Cayman Islands, the government is now seeking to delay the release of its own Internal Audit Unit’s reports until at least a year after the reports have been completed.
An open records request submitted by the Cayman Compass in January for 10 Internal Audit Unit reports has largely been “deferred,” with the exception of two reports given to the Compass this week.
Government officials with the Portfolio of the Civil Service explained in a lengthy memo to the Compass that they would no longer release those reports in an “ad hoc” manner and that the records would be held for a certain reasonable “passage of time.”
The government’s response was made following at least four separate Freedom of Information requests to the Internal Audit Unit over the past several years by this newspaper, all of which have been granted except for one report that was withheld due to national security concerns.
The government has never raised any issues with previous open records requests for internal audit reports, although it has redacted certain passages in some of those reports prior to release. All of the previous internal audit reports obtained by the Compass were received through legal Freedom of Information requests, and none was received prior to completion and the issuance of a management response, which was attached to the report.
“The prior practice of the release of internal audit information in an ad hoc manner and only upon request is flawed,” said portfolio Chief Officer Gloria McField-Nixon in her response to the Compass request. “The nature of this work relies heavily on maintaining a positive rapport with management who are encouraged not only to be frank and candid during an audit but to self-report management issues, preferably before the matters escalate to one of serious or systemic failure.
“The premature release of information before an audit is completed could have an inhibiting effect on the internal audit process,” Ms. McField-Nixon continued. “However, the passage of time will have an impact on the likely level of prejudice caused in favor of the public interest disclosure.”
Ms. McField-Nixon said, going forward, the internal audit reports would be “proactively released” on the Portfolio of the Civil Service website, unless the government managed to find other reasons to prevent disclosure within exemptions to the FOI law.
The Compass is appealing the portfolio’s decision to the Information Commissioner’s Office.
Successive auditors general in the Cayman Islands have emphasized the importance of the timely release of their own reports, which are separate from the work of the Internal Audit Unit.
Current Auditor General Alastair Swarbrick has often complained about the time it takes for his office’s annual financial audits to be “tabled” – made public – in the Legislative Assembly.
“In some instances, the time since the financial statements were completed and signed off by all parties is close to two years and in many cases close to one year,” Mr. Swarbrick said in one evaluation of government annual reporting. “I … continue to have a significant concern about the timeliness of the tabling of these reports as it diminishes the usefulness of the information for members of the Legislative Assembly and the wider public and ultimately undermines effective accountability.”
Former Auditor General Dan Duguay constantly opposed “going back to the old ways” of handling auditor’s reports where they would have to be presented and debated in the Public Accounts Committee prior to their release, meaning they were withheld from public view for years. Mr. Duguay said taking that retrograde step would be a “dangerous, dangerous precedent.”
Findings of numerous Internal Audit Unit reports that appeared in the Compass earlier this year revealed the following:
An entire set of financial records was improperly shredded; staff members willfully ignored directives of managers; managers routinely lapsed in their reporting responsibilities; $250,000 was spent on a system to track stamp sales that ultimately did not work at the Cayman Islands Postal Services Department.
A number of participants in the retirement assistance program for seamen and veterans received unauthorized benefits; some may have been fraudulently earning payments.
The Cayman Islands government is supporting about 1,200 indigent people on its public sector healthcare dole, but it was unable – in most cases examined by auditors – to justify why those individuals should be receiving free health coverage.
Almost 40 percent of hotel owners didn’t file statements to back up monthly room tax payments during a 2013 review of the Department of Tourism’s revenue collection process.