A move to a two-year government budget process, approved late Wednesday by Cayman Islands lawmakers, will lessen scrutiny and transparency around public finances, independent and opposition lawmakers said.
North Side MLA Ezzard Miller said while the government is now required to meet at least once a year in the Legislative Assembly’s Finance Committee to review an annual budget, moving to two-year budgets as of January 2018 will mean that lawmakers will only get two chances during a government’s four-year term to review and question a spending plan.
“I think that severely reduces non-government [assembly] members’ ability to influence government expenses and finances,” Mr. Miller said. “If you think [public construction] projects are overrunning the budget now, wait until they don’t have to be scrutinized for two years.”
Amendments to Cayman’s Public Management and Finance Law approved Wednesday evening by the assembly will change the government’s current July-June budget year to a calendar year period. To get to that point, the next government budget, which begins on July 1, 2016, will be extended for six months to Dec. 31, 2017. After that, a two-year budget will begin on Jan. 1, 2018, wrapping up on Dec. 31, 2019.
Finance Minister Marco Archer explained that while the budget plan would be extended to two years, annual audits and reviews of government spending would still take place as prescribed by the current law.
However, Opposition Leader McKeeva Bush pointed out that those audits have often lagged years behind the actual expenditure and that legislature members are not allowed to question those reports at the time they are made public anyway, due to Legislative Assembly rules.
“That is a long period of time when there is no scrutiny,” Mr. Bush said.
Moreover, Mr. Miller said it was his view that the proposed 18-month “interim budget,” between July 1, 2016 and Dec. 31, 2017, would provide the current government with an opportunity to effectively skip finance committee and strategic policy reporting requirements during its last 12 months in office prior to the May 2017 general election.
“This provides some opportunities for government to spend money in that period leading to the election that is not going to be scrutinized until long after the next election takes place,” he said.
Mr. Archer denied that would be the case under the Progressives-led government, although he acknowledged the fact that no one could control what would occur in future governments. He also said government intended to ensure opportunities for lawmakers to review budgets on an annual basis via upcoming further amendments to the public finance law, due next year.
The finance minister, who has won accolades even from his political opponents for his straightforward dealing with the annual budget process, said the current lengthy slog through a confusing “output based” spending system has to be changed soon.
“The government’s budget process starts in October and ends in June,” Mr. Archer said. “It takes seven [to] eight months in order to produce an annual budget. We have to find some way, if not reducing that time, reducing the number of times we have to do it.”
Backbench MLA Roy McTaggart, an accountant by trade, led a committee that reviewed the Public Management and Finance Law and said the current switch to calendar year finances and two-year budget plans were just a few of some 40 amendments the group had proposed.
Mr. McTaggart said the two-year plan would have “flexibility built in” and if changes in the budget needed to be made, they would be brought to finance committee at the appropriate time.
Mr. Miller remained unconvinced. “The truth is, it is not elected people who prepare the budget,” he said. “Most of it is recurring expenditure that we, as politicians, can do nothing about.”
Mr. McTaggart argued that ministers and other elected members of the government have a responsibility to manage the budget process properly, so it does not overwhelm everything else government is trying to accomplish.
“[The annual budget process is] not where we wanted to spend time and resources,” he said.