Gov’t still rushing in ‘poor quality’ financials

Eight years after former Auditor General Dan Duguay sounded the alarm over $1.5 billion in unaudited government finances, a number of government agencies failed to submit “quality” financial statements, according to Cayman’s current auditor general.

Sue Winspear, who took over the post earlier this year, lauded the civil service’s major improvements since Mr. Duguay’s time but noted that some government entities are still submitting financial statements simply to meet legal timelines.

There are a total of 42 government entities, including ministries, portfolios, statutory authorities and government-owned companies, that are audited by the attorney general’s office or on behalf of that office by local accounting firms. Of those, 28 submitted audits this year that received either a clean bill of financial health or noted only a few areas – sometimes just one – where there were financial concerns.

The auditor general’s office is still going through the remaining 14 entities at the moment, Ms. Winspear said.

“The trend of improvement in recent years continues, but there are still areas where documentation is weak and where it takes significant time provide appropriate and sufficient evidence,” she said. The time taken receiving that information delays the completion of the audit and, ultimately, its report to members of the Legislative Assembly and the public, she said.

Ms. Winspear singled out the Ministry of Planning and the Cayman Turtle Centre for turning around their financial statements – barely decipherable a few years ago – to the most recent audits for the 2015/16 budget, which she said raised few issues, if any.

Another area where government entities had not been reporting any information until recently concerned annual reports by those agencies, she said.

Cayman’s Public Management and Finance Law requires that all public agencies submit a written report of their activities for the year to accompany the financial statements. Up until the 2015/16 budget year, which ended June 30, “only a handful” of those written reports had been produced.

This year, all government ministries and portfolios and more than half of the statutory agencies submitted those reports, which will be made public in the Legislative Assembly.

Steps to improve annual financial reporting “will aid transparency and decision-making” Ms. Winspear said.

“It is expected that all entities should prepare timely annual financial statements, accompanied by an annual report on the business and that they receive an unqualified audit opinion providing assure that the information presented is credible and reliable,” she said. “It genuinely feels that this reality is now within grasp for the public sector entities in the Cayman Islands.”

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