An internal investigation by Deputy Governor Franz Manderson, in response to an audit report that had found financial and legislative irregularities in planned funding for Cayman’s overseas offices and the Dubai World Expo, has found no breaches occurred, because the money was ultimately not spent or needed.
Money earmarked by the previous Progressives-led government for the expo and overseas diplomatic offices, in the run-up to the last year’s general election, was not needed in the budget as the PACT government took a different, and scaled-back, approach, the internal investigation indicates.
A press release issued Tuesday outlined the findings of the investigation.
It noted that Auditor General Sue Winspear, at the request of Governor Martyn Roper and Manderson, in Nov. 2021 submitted the results of her review of the funding. The fact-finding report had examined decisions taken around Cayman’s planned participation in the Dubai World Expo, as well as the opening of overseas offices in Brussels, Hong Kong and Washington, D.C.
Among her findings, she determined that the funding for these enterprises had not been appropriated by Parliament, as is required under current legislation.
Winspear, in her report, found that the Ministry of International Trade, Investment, Aviation and Maritime Affairs had breached the Constitution, the Public Management and Finance Act, and the Public Service Management Act, and that there also had been irregularities around the hiring of employees associated with the expo and the overseas offices.
Manderson said that, in his internal investigation prompted by Winspear’s report, he had obtained responses from the ministry, as well as a review of its audited financial statements, legal advice from the Attorney General’s Chambers, and independent reports from Internal Audit.
His investigation found, now that the 2021 financial statements for the ministry have been completed, “that sufficient funds were available to meet necessary costs associated with the Dubai World Expo and the opening of the Overseas Offices without the need for either the section 11 (5) or section 12 funding requested in January 2021. Given this, there was no breach of section 12 of the PMFA, or the Constitution.”
Despite the findings of the internal investigation, Winspear told the Compass Wednesday that she would not have done anything differently in her own review, “as I think the important thing is that I prefaced my findings with the comment ‘this presumes that additional funding requests made were both necessary and made in good faith’.”
She added, “By the time my report was published, it was obvious the new Minister [André] Ebanks was approaching things differently to the ex-Minister [Alden] McLaughlin and so [it was] highly likely that spending would be less than anticipated before the election.”
In the press release issued by the deputy governor, Winspear is quoted as saying, “I agree that technically there is no breach of PMFA as the funds requested for 2021 were not actually needed after all. After the election, activities relating to the new Overseas Offices and Dubai World Expo were scaled back as a consequence of the different priorities of the new Government and so the actual costs were able to be funded from within the existing 2021 budget for that Ministry and the underspend that was carried forward from 2020.”
Progressives’ response
Leader of the Opposition and head of the Progressives, Roy McTaggart, issued a statement Tuesday evening, saying that the plans for the overseas offices and the Dubai Expo had been “in the works for many months” and both had the support of the UK and the Governor’s Office.
He said, “In our view, the Auditor General was gravely mistaken in several areas of the report. Today’s statement by the Deputy Governor confirms this. The Deputy Governor said categorically, ‘there was no breach of section 12 of the PMFA or the Constitution’.”
McTaggart joined Governor Roper in condemning the leaking of auditor general’s report earlier this year, and stated, “I trust he and Deputy Governor will also work to complete an inquiry into how the document was leaked and who leaked it and take appropriate action.”
New policy on government decisions at election time
According to the release, Winspear also found that “clear guidance was lacking” on how the civil service should conduct itself in relation to the implementation of certain government policies once an election had been called.
In response to this element of her review, Manderson announced Wednesday that a new formal policy, called ‘Period of Election Sensitivity’, had been drawn up, and once approved by Cabinet, would “provide clear information on how Civil Servants and Ministers should conduct Government business once an Election has been called”.
Governor Roper stated, “Notwithstanding the findings of the Deputy Governor’s investigation, I am grateful to the OAG and Deputy Governor for ensuring that going forward, the jurisdiction has learnt important lessons for the future, especially the need for clearer policies and practices during periods of election sensitivity.”
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