The Cayman Islands government’s internal auditors could find no evidence that bids went out for 18 separate payments totaling nearly $1.5 million in various public sector procurements during the 2013/14 financial year.
The audit of central government spending, recently released by the Portfolio of the Civil Service on its website, revealed that the 18 payments were processed within a number of departments and ranged from $580 to more than $440,000.
“Based on these findings, we determined that … entities did not comply with the financial regulations as it pertains to government’s procurement policy,” the Internal Audit Unit reported.
In a separate review, done specifically on the Cayman Islands Fire Service, auditors tested a sample of 20 transactions. There was no documentation to state why a particular vendor was hired over another in any of the cases.
“This … makes it difficult to obtain assurance that value for money was received for goods and services procured by the [Cayman Islands Fire Service],” the report noted.
Bidding and procurement is an issue with which the government service has struggled in recent years. The deputy governor’s office has set up a central procurement office within the civil service to combat different sets of rules that are often observed depending on the department doing the purchasing.
Typically, purchases or contracts that exceed $250,000 must go before government’s Central Tenders Committee for approval. However, smaller purchases of $50,000 or more must also be evaluated, according to government regulations, at least to the extent that three separate purchasers are contacted for price quotes.
In addition, where purchases over $20,000 are made on the basis of a single source bid, those bids must be evaluated by a department tenders committee.
In the case of the fire service, the Ministry of Home Affairs maintained its own policy that departments should receive three quotes for any purchase between $1,500 and $10,000. Auditors were informed that these bids were mainly being done “over the phone” at the fire service and no records were kept of them.
The four government departments responding to the auditor’s comments all agreed to follow recommendations regarding bidding requirements in the future.
Former Auditor General Alastair Swarbrick’s office issued a series of reports dating back to 2011 that blamed government for a non-transparent, politically driven bidding process that led to public money being wasted in large quantities.
The head of government’s central procurement office, Craig Milley, advised government last year that it needed to move away from “the siloed procurement approach,” which is precisely the situation described in the Internal Audit Unit’s reports from 2014.
Probably the most prominent example revealed by the auditor’s office of failed procurement was revealed last year, when Mr. Swarbrick’s office stated $30 million spent in relation to the construction of Clifton Hunter High School in North Side provided little or no value to taxpayers.
The spending led to the high school property being overvalued by up to $40 million, according to Acting Auditor General Garnet Harrison.
By comparison, the amounts detailed in the Internal Audit Unit’s reports are much smaller, but auditors said they would continue to monitor government purchasing to ensure compliance with the rules is achieved.