The Cayman Islands government will begin publicly reporting how much money it earns and how much it spends every three months, beginning in January 2018.
The quarterly budget reports, which for the first time will reveal government budget figures in “real time,” are required under the revisions to the Public Management and Finance Law set to go before the Legislative Assembly in January.
The government was supposed to report its financial progress each quarter in every year since 2004, but it never managed to do so under the old public finance law, eventually scrapping that requirement without having followed it once.
However, Finance Minister Marco Archer said Tuesday that the updated reporting requirements, if approved by the assembly, will be much easier to meet since they are largely just general statements of earnings and spending.
Each report is supposed to be placed in the government’s official gazette six weeks after the end of each quarter. If the first quarter of the 2018-2019 budget cycle ends on March 31, 2018, the figures would be reported by mid-May.
“By doing the financials on a quarterly basis, it will allow [government] to recognize any issues that may arise before you get to the annual financial statement [at the end of each budget year],” Mr. Archer said. “And the public has the information … in as real time as possible.”
Mr. Archer said previous governments did not meet the quarterly reporting requirements under the old public finance law largely because the system of “output reporting” was too complex and was never implemented as intended.
The financial reports initially released under the amended law will not state in detail what the government has done with the money. Mr. Archer said it is hoped that more specific financial data will be reported in the quarterly statements at a later date, but he said the structures to do that are not yet in place.
Quarterly reporting of government’s financial position will also allow the Cabinet to recognize areas where revenue is not coming in as expected, or where expenses have exceeded what was anticipated, Mr. Archer said.
Perhaps the most well-known example of a budget surprise after the end of a government financial year was in mid-2009 after control of the government passed from the former People’s Progressive Movement administration to the then-United Democratic Party government.
A budget operating deficit for the 2008/09 fiscal year ended at $81 million, nearly three times the estimate in early 2009. The budget situation left Cayman in violation of at least three areas of its own finance law and essentially put the U.K. Foreign and Commonwealth Office in a controlling position over the local budget.
As of this year, Cayman has extricated itself from that situation, Mr. Archer said, and no longer has to present its annual budget to the foreign office for approval.