CIAA chairman: “It’s ridiculous”
Some employees at the Cayman Islands Airports Authority received “severance packages” upon their retirement during the government’s 2012/13 budget year, and possibly in prior years, the Cayman Compass has learned.
The severance packages – which totaled tens of thousands of dollars in some cases – were paid in addition to employee pensions normally due upon retirement. Airports authority officials said they were aware of fewer than 10 cases where the packages were paid.
Acting Auditor General Garnet Harrison said Wednesday that it appeared none of the former airport employees who received the “severance” payment had provisions in their contracts providing for such a payment.
“What we’re seeing here is that there is no provision in the contract for severance payments to be made. The board [authorized] it,” said Audit Principal Martin Ruben, when asked about the issue last week.
“It’s ridiculous. It’s the first time I’ve ever seen it,” said 40-year civil servant and Cayman Islands Airports Authority Board Chairman Kirkland Nixon. “People don’t get severance payments when they retire.”
Typically, severance payments, under the Cayman Islands Labour Law, are made when an employee is made redundant or wrongfully terminated. They can equal between one and two weeks’ pay for each year the person has worked for the company.
For instance, someone retiring from the airports authority who made $60,000 per year would earn about $1,154 per week, and if they were paid for 30 years of service, they would receive close to $35,000 in “severance.”
Mr. Ruben said lump sum payments can be made in the public sector upon a worker’s retirement, but such payments are usually arranged beforehand.
Mr. Nixon said airport board members appointed under the Progressives-led government administration first learned of the severance payments during a 2013 briefing with financial managers. He said none of the payments was authorized by the current board of directors.
“This had apparently been going on for years, “Mr. Nixon said. “We stopped it immediately.”
As far as the scope of the severance payments, Mr. Nixon said, “There’s more than one incident” of it, but probably not more than 10 that he was aware of at the moment. Mr. Harrison also put the number of severance payments made between government’s 2012-2014 fiscal years at “less than 10.”
However, Mr. Nixon said the airports authority board of directors was still looking into the matter and expected to receive an update shortly about how much money was paid out and whether there were any additional instances of severance payouts prior to the 2012/13 year.
Airports Authority Chief Executive Officer Albert Anderson was contacted regarding the severance payments. A spokesperson said he was checking into the issue.
The airport severance packages for retirees were among several problems in government payroll management revealed by Mr. Harrison’s office in a review of public sector financial statements between 2012 and 2014.
Other issues the audit staff flagged as “being outside established policies” included:
One public sector employee who received a “sign-on” bonus at the end of their first contract period and who was paid 6 percent above the maximum amount allowed for his pay grade, as set by the civil service.
A senior information technology manager was working remotely for a Cayman Islands statutory authority in the U.S. with no business case to demonstrate how this benefited the authority.
There was “significant variation and inconsistency” in the area of payments for board members appointed to oversee statutory authorities and government-owned companies.