The Cayman Islands civil service has vastly improved how it tracks public money spent on various government entities each year, but according to auditors, public accountability – as defined under the law – remains to be achieved.

Auditors are still unable to verify, for example, whether government’s annual spending is in line with amounts budgeted by the Legislative Assembly – leading auditors to disclaim the public sector’s statement of appropriations for both the 2014/15 and 2015/16 budgets. A “disclaimer of opinion” means there is not enough information available to verify any of the figures produced in the statement.

The current budgeting system being used, referred to as output budgeting, makes it difficult, if not impossible, to discern what the public sector achieved for the $900 million-plus it spends annually.

“[The budget] is measuring the wrong thing for the public purpose,” said Acting Auditor General Garnet Harrison. “What have they achieved with that money? Well, they produced some things, but did they achieve anything? I don’t know.”

Mr. Harrison is quick to state that the audit office does not want to be overly critical of the good progress civil servants have made in repairing a once-dreadful financial management system, which – a decade ago – could not account for some $1.5 billion in public spending. That is certainly not the case today, he said.

“It’s the big picture now,” Mr. Harrison said. “They’re getting things cleaned up underneath, but we don’t have the big picture yet.”

Thirty government ministries, statutory authorities and government-owned companies were given “unqualified” or clean audit opinions by the Auditor General’s Office for the 2015/16 budget year – meaning those figures can be relied upon to fairly state the agency’s spending for the year. Another six entities received qualified opinions and, as of last week, six more entities were still completing their audits.

This is the first time government entities received such a large number of unqualified audit opinions since government switched to accrual accounting in 2004. Representatives for those entities received awards from the Public Accounts Committee last week for their efforts.

“With the quality of the financial statements getting better, this enhances the financial accountability of those entities,” Mr. Harrison is quoted as saying in a government press release. “There is still a ways to go, but good progress is being made.”

One area that government needs to improve is in the issuance of annual reports from each public agency, the auditor’s office said. Right now, some agencies release those reports, others do not. For some who do release those reports, the information contained within may not be particularly useful.

“For most of them … they describe all the activities they did,” Mr. Harrison said. “They don’t describe what outcomes they achieved.”

The annual reports are not audited, but they are reviewed by Mr. Harrison’s office.

One thing government has looked at changing is the current output budgeting system to an input-based system where government tracks the specific dollar amounts to each area of expenditure. That decision has not been made, Mr. Harrison said, but the current output system is not telling the public what it needs to know, he said.

“They’re going to have to change the way they’re … looking at things to bring the accountability back,” he said.

Public Accounts Committee Chairman Ezzard Miller said last week that he was encouraged that the working relationship between government, the auditor’s office and his committee had “completely changed” from adversarial to one of understanding. Mr. Miller urged government to award performance bonuses for entities that had “superior financial audit compliance.”

Deputy Governor Franz Manderson said the improved audits were one step toward government’s strategic plan of creating a “world-class civil service.”

1 COMMENT

  1. Let’s see. I am hired to repair cars. My qualification was not checked or disregarded. Year after year I tighten something here and there, replace parts with the wrong ones since I don’t really know what I am doing. My management doesn’t mind and I keep collecting my paycheck. Eventually I learn the trade and fix an entire car by myself or so I think. Nevermind it will be brought back in a week. My management praises me anyway and gives me a raise.

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