Cayman Islands Customs will need to improve a number of areas to fulfil its mandate as a risk-based and intelligence-led enforcement agency, according to an Office of the Auditor General report released Thursday.

The audit identifies deficiencies in a wide range of areas, from strategic planning, revenue concessions, human resources, transparency, information technology, and risk management, among others.

Read: Customs and Border Control outlines plan to address Auditor General report

Analysis for the report was conducted in 2018 before Customs began the process of merging with the Department of Immigration to create the joint Customs and Border Control. At the time of audit, Customs was part of the Ministry of Finance and Economic Development, which oversees revenue concessions.

The merger with Immigration was put into place in February. The audit states that while the merger is a step forward towards modernising border security, it is only a first step.

“Much more needs to be done. Customs has already started moving to a more risk-based and intelligence-led approach. This means that the collection, analysis and use of information and intelligence will need to improve significantly. [Customs and Border Control] will also need to ensure that it has the right resources in place, including staff with the right skills targeted at the right areas; and that it has user-friendly IT systems in place,” the audit report says.

Auditor General Sue Winspear highlighted the important role that Customs plays in the Cayman Islands economy, making the efficient operation of the agency all the more significant. The report states that Customs collects around $165 million a year in duties, fees and fines, making up 20% to 25% of annual government revenues.

“Despite this important role, Customs did not have a clear strategic plan setting out its vision and objectives; nor did it have a workforce plan or performance management framework to support effective management of the business. It is important that the new organisation, Customs and Border Control, develops these strategic documents as soon as possible to ensure its effectiveness,” Winspear said.

Although funds collected by Customs are consistently higher than expected, according to the report, it stated that the process for projecting revenue could be improved, adding, “It is also unclear whether the Government is collecting all the revenue that it should, as there continues to be significant weaknesses in the approach to awarding and managing revenue concessions.”

Issues around awarding concessions were identified in an earlier auditor general report. The office says little progress has been made towards achieving previously made recommendations for awarding revenue concessions or waivers. As a result, the Office of the Auditor General says government does not know how much revenue has been lost.

“It is disappointing that there has been very little progress made to improve the process for revenue concessions,” Winspear said.

“More than three years after making recommendations, there is still no revenue concessions policy, nor is there any systematic monitoring of the revenue concessions awarded, and so it is not known how much money has been foregone or whether the things promised in return for the concession awarded have been being delivered.”

Furthermore, the auditor general found that the agency’s strategic plan was lacking necessary elements. While some building blocks were in place and objectives were outlined for changing business processes, the plan lacked essential components.

“The Collector of Customs told us that he had intended to develop a strategic plan for the Customs Department, but this was put on hold after the Premier’s announcement about the creation of Customs and Border Patrol,” the report states.

The audit document makes a series of recommendations, stating that Customs and Border Control should:

  • Develop a strategic plan as soon as possible;
  • Develop and implement a range of performance measures that cover inputs, outputs and outcomes to determine whether strategic goals are being met;
  • Develop a workforce plan that aligns with its strategic priorities and demonstrates how it will address pressures on the workforce;
  • Develop a human resources database for easy access to data on staff qualifications and training needs:
  • Review its training and development needs;
  • Strengthen its integrity management by ensuring workplace rules include direction on purchase of government property, especially seized or forfeited goods;
  • Ensure that effective project management is put in place for the remainder of the IT modernisation project.

More information can also be obtained by contacting Sue Winspear at 244-3201 or Angela Cullen 244-3220.