Nine public bodies broke the law last year when they spent more than $10 million in government funds without requesting the required approval first.
The biggest offenders were the Ministry of Financial Services and Commerce and the Maritime Authority of the Cayman Islands, which each spent over $2 million unauthorised.
Other culprits were the Ministry of Education, the National Roads Authority, the Port Authority, the Ministry of Home Affairs, the Cabinet Office, the Ministry of Youth, Sports, Culture and Heritage, and the Cayman National Cultural Foundation.
The money was spent on janitors, roads, computer services, surveyors, legal consultancy services, a communication tower, security cameras and prison inmates’ meals.
The violations were revealed in the Office of the Auditor General’s report on the state of financial reporting within the government in 2022, published on 26 Oct.
In the report, Auditor General Sue Winspear said the spends were in breach of the Procurement Act (2016) and Procurement Regulations.
The law requires a public body to submit a written business case for procurement projects with a value greater than $250,000 to the Public Procurement Committee for approval.
It also requires an entity to submit to its entity procurement committee, for approval, a written business case for projects valued more than $100,000 but less than $250,000.
“It was disappointing to note many instances of non-compliance with the Procurement Act and Regulations by public bodies,” Winspear wrote in the report.
However, repercussions for not following the legal requirements are only disciplinary, the auditor general told the Compass.
Breakdown
The report detailed the following violations:
The Ministry of Education awarded a janitorial contract for $330,000 without obtaining the required Public Procurement Committee approval.
The National Roads Authority awarded two contracts for $264,000 and $480,000 without the required approval.
In addition, on another contract, the National Roads Authority purchased equipment for $672,000, in excess of the $600,000 approved by the Public Procurement Committee.
The Port Authority of the Cayman Islands bought janitorial services for $330,000 without obtaining the required approval.
The Ministry of Financial Services and Commerce paid $2.6 million to a vendor for various computer services. The contract with this vendor was signed more than 12 years ago.
There is no evidence of subsequent tendering or Public Procurement Committee approval for this contract, the report said.
In addition, the Ministry of Financial Services and Commerce has paid US$180,000 per year (only amount listed in US$) to another vendor for legal consultancy services since 2019.
Since the inception of this contract in October 2019, about $491,000 all together has been paid to this vendor without approval.
The Maritime Authority of the Cayman Islands directly awarded contracts of $2.4 million to surveyors and independent contractors without Public Procurement Committee approval.
And the Ministry of Home Affairs bought various goods and services with a value greater than $250,000 without the required approval.
These include the communication tower for $930,000, inmates’ meals for $739,000 and maintenance of security cameras for $265,000.
In addition, motor vehicles worth $130,000 were purchased without following a competitive procurement process.
The Cabinet Office did not provide evidence that a procurement contract directly awarded to a vendor for $103,000 had been reviewed by its entity procurement committee.
The Ministry of Youth, Sports, Culture and Heritage procured maintenance and security services for $568,000 and $200,000, without going through the required tendering process.
The Cayman National Cultural Foundation awarded a contract for renovation works valued at $185,000 without the business case approval from its entity procurement committee.
In response to a Compass request for comment, a spokesperson for the Ministry of Financial Services and Commerce said they acknowledge the report.
“The ministry accepts the findings, noting that they relate to two older contracts that are under review,” they said.
The Compass has also contacted the Maritime Authority for comment and is awaiting a response.
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