Although some may have scored only a “C” in terms of taking a math exam, all Cayman Islands government agencies have managed – for the first time – to not entirely fail audits of their annual financial statements.
The passing grades were received for the 2013/14 financial year and represent improvement over the prior year, Acting Auditor General Garnet Harrison said Thursday. A few agency audits are still to be completed, but Mr. Harrison said all entities audited by his office so far received “unqualified opinions,” which indicate accurate, fairly provided financial information or “qualified opinions,” meaning that a few problems were identified.
None of the 2013/14 audits received an “adverse” opinion or “disclaimer of opinion” – a major change from just five years ago, when most of the government agencies being audited were given those outcomes.
Six of the 15 government ministries or portfolios received unqualified audit opinions for the 2013/14 year, while 17 of the 27 statutory authorities and government-owned companies also received unqualified audit opinions for that year.
Even the government agencies that did not fare so well, such as the Ministry of Planning and the Ministry of Tourism which received “qualified” audit opinions, put in the best information they had ever provided.
“No credible or reliable financial information has been available publicly for nearly 10 years for these entities,” the auditor general’s office stated in its review of the ministries’ reports. “Issuing a qualified opinion on both ministries for 2013/14 is a significant step forward.”
All is not good news, Mr. Harrison cautioned. Government auditors are still finding weaknesses in areas like keeping track of inventory or effectively managing construction projects.
The major problem for government agencies in the continued reporting of annual financial statements is the type of information they are making public.
For instance, while many agencies are turning in relatively complete financial records to the auditor general’s office on time, they are often not including written reports that explain exactly what the agency is doing with the money it receives. Mr. Harrison said this type of specific detail is often not easily discerned from a spreadsheet.
“Public sector entities also need to explain what they did with the money,” he said. “This essential information is not being prepared by government officials.”
Another area of reporting that continues to lag, in the auditor general’s view, is in the tabling – the act of making public – the reports in the Legislative Assembly. Some financial records – including the financial reports for the entire public sector for 2013/14 – are not presented to the Assembly until years later, limiting the public’s ability to learn from them while the information is relevant.
“Some reports have been languishing in government offices for over a year,” Mr. Harrison said. “These delays are simply unacceptable for good accountability.”
In many cases, there appear to be few reasons for such public reporting delays, auditors said.
“The hard work of government’s accountants and my auditors to meet the statutory deadlines is undermined by these delays and any opportunity for real accountability is lost only because the reports stay at someone’s desk,” Mr. Harrison said.