CAL & HSA still delinquent

| 23/04/2010

Cayman Islands News, Grand Cayman Island headline News, Cayman government finances(CNS): In his recent updated report examining the dire state of financial accountability in government the auditor general reveals that the national flag carrier, which receives more than $10.5 million from government each year in subsidy, and the HSA, which receives a direct $40milllion subsidy, are still the most delinquent in their accounting. Dan Duguay stated that Cayman Airways is in a worse position today than when he published the 2008 version of the report as its 2004/05 accounts have not been finalized or audited. And although the HSA has made strides with its more recent statements the authority cannot submit any accounts for 03/04 or 04/05.

“The management of the HSA decided that they could not prepare financial statements for 2003/04 and 04/05 because of the deficient accounting records,” Duguay stated in his report, The State of Financial Accountability Reporting 2010. “While we cannot condone the practice of HSA not preparing critical financial accountability reports, we believe that the dire state of accounting records during these years necessitated this extraordinary action.”
Duguay said the Legislative Assembly had been informed of the departure from the Health Services Authority Law as well as the Public and Management Finance Law. Moreover, the HSA has made some strides, and while it has never completed an annual report it has completed its financial statements for the financial years 05/06 and 06/07 and has started work on 07/08 but is yet to start 08/09.
No reasons were cited as to why Cayman Airways, which had not completed its 2003/04 annual accounts when Duguay made his last assessment in July 2008, had still not completed that year’s annual report. The AG said that, as far as his office could tell, the airline has never submitted an annual report to the LA. This means that the Cayman public has not been able to scrutinize how the airline, which it owns,  uses the more than $10 milllion it receives each year from the public purse or why it runs at such a significant loss. The airline has submitted financial statements for 03/04 and 04/05 but no reports.
Despite the appalling delinquency of some statutory authorities and government entities, Duguay did highlight some improvements in his report. He said that the National Housing Development Trust, which was three years behind, and the Electricity Regulatory Authority, which was two years behind in 2008, were now both current. The Public Service Pension Board had also moved from three years behind to only one.   
Duguay said, however, that the improvement was no where near as much as he had hoped when he made the 2008 report. Speaking to the press earlier this week when the report became a public document, Duguay said that, given the seriousness of the situation when he first made his report in 2008, he had genuinely expected a serious effort would be made to improve, but instead some authorities, such as UCCI, have fallen further behind or, as in the case of the Turtle Farm, another entity receiving significant public funding, have only manage to complete two sets of delinquent financial statements, so have essentially stood still.
There were only three entities Duguay said that were up to date. The Cayman Islands Monetary Authority has completed all of its annual reports up to and including the 2008/09 financial year. CINICO and the Water Authority are also up to date and have only to submit their annual reports for 2008/09 to the Legislative Assembly in order to make them public documents.
Of the various portfolios and government ministries, all except the Education Ministry, which has a budget of more than $75 million, had completed annual reports for 2004/05. Duguay noted that the Ministry of Education remains the only ministry or portfolio in core government not to have tabled its 2004/05 annual report in the Legislative Assembly.
A number of the smaller independent government offices, such as the Office of the Complaints Commissioner, Judicial Administration, and Legal Affairs have tabled reports up to 2006/07. However, there is only one core government department which is compliant with the PMFL in having completed its annual reports, and that is the Office of the Auditor General.
While a number of the government departments have over the last few years criticised Duguay for pointing out their delinquency as they say they have completed financial statements, the issue is that until a government department, authority or company completes its annual report the public cannot access the information.
 And while Cabinet may be informed of the details of public spending across the various entities of government, the people of the Cayman Islands cannot scrutinize the spending of government without annual reports being tabled in parliament.
These audited reports contain the ‘hows and whys’ of government financial management of the money it gets from the public purse. Annual reports also contain the auditor’s reports, in which his office states if the books balance and if not what the problems are through qualified statements. Duguay notes in his report that there are more than 73 sets of financial statements that have not been moved to the annual report stage.
“This means that the financial reports and the audit opinions prepared by my office cannot be made public,” Duguay said. “This lack of transparency and public scrutiny is an effective avoidance of accountability by government officials.”
Of those financial statements that have been completed, Duguay says he has offered a number of qualified and in some cases adverse opinions, which means that there are questions about the quality of the information. “In other words the financial statements lack the credibility required to be relied upon by a reader of those financial statements,” he added. However, Duguay and his team are not able to reveal those concerns and questions until they become public documents via an annual report being given to the LA.

Category: Headline News

Comments (18)

Trackback URL | Comments RSS Feed

  1. Joe Bananas says:

    As bad as this seems what is infinitely worse is the fact that on in Cayman this form of total incompetent and unethical leadership will not change because they are the representation of the Cayman people in the present sense.  While there is hope for the future the current state of Caymanian education only enforces the notion that competent Government leadership must come from elsewhere.

  2. Anonymous says:

    I know of a couple of these CFO’s in government.  They can’t finish the financial statements because they’re enjoying a two hour lunch at the Brasserie.  I know one is always the first one out the door at 3:00 so they can go ready their yacht for the weekend.

  3. Anonymous says:

    a disgrace

    the elected officials stiill seem to go along with management style from both HSA and CAL. Not sure who needs to be fired– the management team of HSA for perpetuating this lousy job or the elected MInister for lstening to halucinogenic stories and assurances of doing a much better job.

  4. Anonymous says:

    Accountability???  These CFOs work around the clock…maybe we need the truth….

  5. Anonymous says:

    Time for accountability

     

  6. Anonymous says:

    Where else in the world would this be tolerated?

    The theft of government gasoline was discovered and documented yet no one was held accountable or charged for theft.

    In Cayman the clear message is that anything goes…

  7. peter milburn says:

    Certainly looks bad for the Island and I just cant understand why we continue to pay these seemingly incompentent people who have the so called qualifications to do these accounts.Fire them all and hire a good accounting firm to do the catch up work and then hire people with PROPER qualifications to take over.I bet the schools could turn out a better bunch than what we seem to have right now.As the old saying goes "if you cant take the heat get out of the kitchen"

  8. Anonymous says:

    I can account for a few thousand of the HSA’s dollars.  They waited over a year before submitting the bill for my 3 day hospital stay to my insurer who subsequently denied it for not submitting within their 6 month deadline.  My insurer also advised that this is very common…

    • Anonymous says:

      Similarly, our insurer received invoice for a hospital stay from our child’s birth – on our child’s 3rd birthday.  You can’t make this stuff up! 

      • Uctapus says:

        If they don’t ask for payment within 6 months the claim is unenforceable under the applicable statute.

  9. Anonymous says:

    Of all the news services, may I say, CNS is Cayman’s most informative news service

    KEEP UP THE GOOD WORK

    :o)

  10. My2cents says:

    It is actually misleading of this article to suggest the HSA is still drawing funds from the CIG in order to survive.

    Whilst its accounts may be woefully behind, the HSA has not been allowed to draw any further funds from Government for sometime.

    As a result they have worked very hard to improve their collection efforts from the insurance companies with a great deal of success.

    The HSA have not drawn funds from the Government in a long time. A very different situation from CAL.

  11. Anonymous says:

    How long does it take for the AG office to actually audit the accounts when presented?

  12. isandman says:

    Why this situation has been allowed to continue with no "accountability" (heads rolling) is truly astounding!…but then again this is Cayman.

  13. Lazyitis Disgrace says:

    Anywhere else in the world these Financial Controllers and CFOs would be terminated with cause (perhaps with charges laid against them), yet in Cayman it seems they get a raise and are allowed to continue to serve another 7 years…how is that? 

    Who are the CFO’s of these agencies?!? 

    Where are the adults that are supposed to be supervising them? 

    How long must the People suffer this "dereliction of duty" culture in the CIG?!?  

    There are 36 public auditing/bookkeeping firms on this island that would be willing to assist… 

  14. Anonymous says:

    Perhaps there should be an independent review to find out what the truth really is.

  15. Anonymous says:

    Could it be a coincidence that the government agencies which are losing the most money tend to be the ones which cannot produce accounts to show where the money went?