For the first time since the Cayman Islands government moved to its current accounting system, public entities ‘across the board’ have turned in financial statements to auditors by the legally mandated deadline – 31 August – according to Financial Secretary Ken Jefferson.
In previous years, financial statements from government ministries, portfolios, statutory authorities and government-owned companies were sent in months, even years late and many did not contain enough information for auditors to determine how the money was spent.
“This is a great accomplishment by public servants and it reflects the government’s drive and determination to achieve the expectations of the law and those of the public,” Premier McKeeva Bush said.
Auditor General Alastair Swarbrick said earlier Wednesday that “about 60 per cent” of the government’s financial statements were turned in and that he expected a rush of further submissions as the day wore on.
At 5pm Wednesday, audit office manager Martin Ruben said he could not confirm whether all reports from the 13 ministries and portfolios and 26 statutory authorities and government-owned companies had been turned in. Nor could the auditor general’s office get an idea as to the quality of the information provided.
However, Mr. Swarbrick said he was very pleased by what appeared to be “a very strategic response” to government accountability for the 2010/11 fiscal year, led by Deputy Governor Donovan Ebanks.
“I think we are seeing significant progress,” Mr. Swarbrick said. “There’s still an ongoing concern about the quality of the financial statements and their reliability, particularly for the ministries and portfolios.”
The news in previous years is less good for government. The auditor general noted that roughly half of the audits conducted on government ministries and portfolios from the government’s 2004/05 budget year through the 2008/09 year were either given adverse opinions or a ‘disclaimer of opinion’.
‘Disclaimer of opinion’ means there simply wasn’t enough information to even conduct an audit, essentially no way of verifying how the money was spent. An adverse opinion means the entity’s financial statements for the year cannot be relied upon.
Statutory authorities and government companies did much better, with most of their financial statements receiving unqualified opinions, the best rating given by auditors; or qualified opinions, which means areas of concern were identified.
Mr. Swarbrick said it was unlikely that a full picture of government spending for the 2004/05 through 2008/09 budget years would ever emerge.
“You can’t be sure that information is appropriate or accurate,” he said. “I suppose the biggest concern is how [the money is] being used. The reality is, in terms of the financial statements from 2004/05 to 2008/09, you’re going to struggle to get full accountability for that time.”
Compliance audits
The auditor’s office will be conducting some compliance reviews of what it considers ‘high risk’ spending areas within government between the 2004/05 and 2007/08 budgets – basically the government years with the most incomplete financial information.
“For example we’re looking at criteria-based programmes,” Mr. Swarbrick said. “The easiest one would probably be things like scholarships and bursaries … the sort of things, where it requires judgments and criteria or organisations get awarded money.”
Recent changes to the country’s Public Management and Finance Law required auditors to perform compliance audits.
A key concern in this area is the complete lack of consolidated accounts for government entities, going back to 2005.
Without those records, auditors can’t review certain areas of government spending, including executive transactions and transfer payments.
“[These are] expenditures where the government provides funding for organisations and individuals based upon a pre-determined criteria,” Mr. Ruben said. “It’s a very unique type of payment whereby you can have a programme, for example, as the Premier has, providing a nation-building fund.
“These are not normally included in the financial statements of the ministries and portfolios.”
Related Videos
