The Cayman Islands government was required to spend an extra $24 million in largely unanticipated, supplementary costs over the past two fiscal years.
The expenses, largely related to the provision of public health services and the care and housing of Cuban migrants, were detailed by Finance Minister Marco Archer in a statement to the Legislative Assembly Friday.
The money has already been spent, but the law requires the assembly to review the additional expenses for each of the budget years controlled by the current administration. The Legislative Assembly’s Finance Committee is expected to complete that review within the next week.
Minister Archer explained that in most cases, government departments try to “match” supplemental expenses with reductions elsewhere in the budget. However, in some cases that is not possible, he said.
For instance, during the 2015/16 budget year – the last budget – government had to spend $13.9 million more than it was able to find in spending reductions.
Mr. Archer said those additional expenses were mainly in three categories, an additional $2.9 million for the care of Cuban migrants, an extra $1.4 million for mosquito control services to combat the rise of the Zika virus and another $5.9 million for healthcare of government-insured patients at overseas institutions.
All of those costs were above what government had initially budgeted for those areas, Mr. Archer said.
Although the government spent $13.9 million more than it could find in budget cuts for last year, Mr. Archer said that is still well below the budget “cap” government has in place each year for supplemental expenses – these days that’s about $30 million annually.
For the 2014/15 budget year, the story was much the same. Government spent about $10.2 million more in supplementary costs than it could find budget reductions to support.
Those costs were again for additional expenses for Cuban migrants ($1.5 million) and overseas healthcare costs ($5.4 million). The government also spent $1.7 million that year for preparation measures to combat the Ebola virus, but that health threat never materialized in Cayman.
During the government’s 2013/14 budget year, supplementary expenditure cost overruns were kept below $40,000, Minister Archer said.
In all cases, Mr. Archer said, the cost overruns were kept well below the $30 million to $31 million dollar limit for supplementary expenses.
“It demonstrates that Cabinet was prudent in its supplementary expenditure approvals,” Mr. Archer said Friday.
The additional supplementary costs came against the backdrop of budget operating surpluses (meaning revenues greater than expenses) totaling more than $100 million each year.
At the end of the 2015/16 budget year, June 30, 2016, the government had more than $400 million in available cash balances, according to a report from Mr. Archer’s ministry.
In addition to accumulating more cash, central government’s debt fell from about $574 million at the start of the Progressives administration’s term in office, to about $503 million in June 2016.