EDITORIAL – Auditors unearth $2 million of problems at DEH

The recently released auditors’ report confirms three enormous concerns within the Department of Environmental Health: the garbage accumulating on curbsides and in dumpsters; the department’s $2 million in overspending on overtime pay in the 2016/17 budget; and the public statements at the ministerial level that consistently downplayed departmental problems, even while internal auditors were discovering and reporting them.

Let’s review:

In late 2017, the department – responsible for solid waste collection and the Cayman Islands’ landfills – ran out of money to pay salaries with two months left in the year. The Ministry of Health, Environment, Culture and Housing – led by Chief Officer Jennifer Ahearn – asked internal auditors to investigate.

At the beginning of 2018, in response to inquiries about the conspicuous absence of DEH Director Roydell Carter, Ms. Ahearn issued a brief statement: “Contrary to reports in the media, DEH Director Roydell Carter has not been suspended and there are no funds unaccounted for at DEH.”

The first phase of the internal audit review, issued in February, concluded: “Ultimately, the [DEH Director Carter] had the responsibility of managing the approved budget, avoiding cost overruns and escalating concerns to the Ministry, all of which he substantially failed to do. At the Ministry level, [Chief Officer Ahearn] should have been agreeing and authorizing overtime for the Department and the CFO and DCFO should have been monitoring expenditure, budget variances and forecasts, and escalating concerns to the CO to ensure the Department was operating within the parameters of its approved budget; however, these responsibilities were not carried out as intended.”

Delays in trash collection continued over the next several months, and the government issued multiple public statements (including a public apology in May by Deputy Governor Franz Manderson) that omitted references to the tangle of mismanagement being sussed out by auditors, or to Mr. Carter’s continuing absence.

On July 12, the government announced that Richard Simms and Mark Bothwell would serve as interim Acting Director and Acting Assistant Director for the solid waste division, focusing their efforts on fleet maintenance, staff hours and schedule maintenance.

But at the time, officials knew – as we now know they knew – that auditors had reported that vehicle downtime and staff absenteeism could not by themselves explain the department’s runaway overtime expenditures.

Auditors wrote in the second phase of the review, issued in July: “With inadequate management information, malfunctioning internal controls and conflicting evidence, we believe there is a high probability that intentional abuse of the system was another significant factor behind the increased expenditure.”

It was not until September – two months after the announcement of “Acting Director” Simms and more than nine months since former Director Carter’s disappearance – that Ms. Ahearn told the public that Mr. Carter had “opted to retire from the civil service.”

She would not say whether his departure was connected to the audit or any disciplinary action, or whether there was any financial settlement or other payout involved.

Around the same time, in the third and final phase of the review, auditors concluded: “Our review identified multiple employees from the Department of Environmental Health with implausible 2016/17 overtime records, indicative of widespread abuse and substantial mismanagement within the Solid Waste Collections, Landfill, Recycling and Fleet operations.

“We believe the exploitation of a cultural practice, whereby overtime is routinely accrued before the completion of regular contracted hours, intensified in 2016/17. Inadequate management information renders it impossible to quantify, but a significant number of paid overtime hours could have been regular work hours for which no additional expenditure should have been made.”

It is worth noting that Ms. Ahearn, as Chief Officer, both ordered the audit and controlled the release of the auditors’ report under the Freedom of Information Law. In her response to the open records request filed by the Compass, Ms. Ahearn said, “the matter is still being investigated.”

The next logical question is: Who is now in charge of the investigation?

With the work of internal auditors now complete, it seems time to swap out the “barking watchdogs” with “biting bulldogs” – in other words, law enforcement.