(CNS): The overall review of the country’s public sector, which is being conducted by the Deputy Governor’s Office, continued this month with the start of the second phase on Monday. The first phase of the review, which was a condition of the approval given by the UK for the Cayman Islands Government to borrow outside the parameters of the Public Management and Finance Law, began last year and has now been completed, Chief Officer Franz Manderson has confirmed. However, so far only four government departments have been examined: Public Works, Prisons, CINICO and the Department of Tourism. A report has been completed, and although it is not yet a public document, Manderson stated that there were plans to release the report covering the first phase.
The review of the entire public sector was originally supposed to be completed by the end of 2009 as it was one of the conditions made by the former overseas territories minister, Chris Bryant, when he agreed to allow government to borrow to balance the budget at the end of the 2008/09 fiscal year. The December deadline was, according to government officials, extended to March. However, only four government entities have been examined, despite being six months past the second deadline. The review is still seen by the CIG as part of the conditions regarding the borrowing requirement, Manderson stated in an email to CNS this week.
When, in May of this year, the new UK coalition government approved the premier’s three year plan to address the country’s deficit and long term spending problems, a reduction in public spending was part of that commitment and the civil service review was said to be the tool that would direct the cuts.
The CIG said in its long term national financial plan that public expenditure would fall from the $532 million for core government in 2009 to just over $462 million by 2013 — eliminating the country’s deficit. Bush told the Legislative Assembly in June that the country’s fiscal recovery would be achieved by expenditure control as well as growth stimulated by increasing economic activity.
The three-year plan points to major public sector reform and government said it planned to use the results of the internal civil service review to cut operating expenses. Government said it was committed to this “major public sector reform”, which would include the implementation of many of the recommendations of the Miller Commission report and, in particular, “a sustainable reduction in government’s operational expenditures” and improving efficiencies. Government said it would implement the recommendations resulting from the review of various civil service departments.
“The Government will … be incorporating the results of the civil service review into the overall implementation plan,” the report reads. “The objective of formalising the public sector reform process is to ensure that the targeted reform benefits which will impact this three year plan are achieved for this plan as well as over the medium to long term.”
However, it is now not clear how many more departments within the civil service will be reviewed or when the results of the review which government intends to use as a guide to cut spending will be completed.
The foxes are guarding the hen house (with the expected result).
You know what? Firstly, the article. Why in the hell would anyone expect the CS to review itself and recommend cuts? Why are we surprised they cannot make the required deadline of the review?
Secondly, the unaudited financials. What happened to the deadlines set and publicly promised by the Chair of the PAC Miller? How many deadlines have they missed now? Are we sick and tired of this bag of uneducated hot air yet?
Third and final. Who is next on this hierarchy of responsibility? Is it not the voters? Are these actions not worthy of a public protest? Are we afraid of taking responsibility for the public spending?
Come on people, we need to stop the blame game and take action. We need to organize ourselves to march on the LA during the next sitting and take it over demanding audited accounts and a CS review document that can be publicly debated and agreed. I promise you this, the economic worst has not yet been realized in this country, it is going to get much worse before it gets better and we need to sort out our public financing and operations.
I am not sure where you, the reader here stands, but I have lost all confidence in ALL of the elected members of Parliament and I want to see fifteen newly elected members seated. Persons who have never been elected before.
Everybody in the Cayman Islands needs to read Rabble Rouser’s comment below. That is exactly how it goes down.
Not many years ago the misuse of public funds by politicians engaging in personal junkets at the public’s expense was at least a little bit constrained not only because we had politicians with something resembling morality, but because senior civil servants were appointed by the governor, and politicians knew that they could not remove or transfer into oblivion a civil servant who refused to go along with hiding a politician’s misuse of public funds.
That appears to have all changed recently and senior positions are more and more filled by persons hand picked by politicians for their ability to "work with" these politicians, which unfortunately appears to include their ability to do as they are told without asking any questions and their ability to look the other way when told to.
Certain elected officials seem to feel entitled to use the public purse like their own "slush" fund to do whatever they want and they expect civil servants to bury the wasted funds in vague budget lines like "promotion", "investigation of investment opportunities", etc.. Of course these same politicians tell their constituents that unfortunately there is no money for text books for the schools or other "extravagances".
I have a plan, pay civil servants at the end of the year a bonus, to be divided evenly between all of them, of say 20% of any surplus that is generatedby the Cayman Islands. This will fix many problems. Think about it.
Amen Rabble Rouser yes there is civil servants that isnt worth the salary they get but that happens all over private and Governement but those elected members have WASTED more money than any civil servant there is every min they are travelling and for what total BS isnt there a limit for how many travel trips these people can take for a year because they are surely socking it to use for there world tour because it looks like thats what they are doing touring the world before the next election.
Ok. I think that the HR manager in my company is overpaid, so I ask her to personally conduct an analysis of her pay level.
Guess what the result will be????????
Why do you think that companies outsource this kind of analysis?????
This is as Micky Mouse as it can get….
What do you guys think of our new motto?
"Ask not what you can do for the Civil Service, ask what the Civil Service can do for you"
civil service is now 10 months late on reviewing itself……what a joke….just another day in wonderland (cayman)…..
If I went to the bank for a loan for my business, the first thing they would ask me for would be an audited set of accounts.
Have we been able to provide this and if not, then why not?
Once our accounts are up to date, then all future transactions should be posted into an accounting system whereby the public can view the reports online.
This would put a stop to wastefulness in a heartbeat. Don’t civil servants serve? Are they not accountable to the ones that provide their paycheck?
That would be us.
What about it, Mr. Bush? How about some transparency?
I am not a civil servant, especially not civil, but I do know many of them, the good, the bad, and the ugly.
Here is a little anecdote that might help you understand how the best laid plans can become easily undone, and the reason why ALL of the blame should not be placed squarely at the feet of civil servants.
Let’s use Dept of Tourism as an example. The LA votes them a budget of $X million. Presumably they gave justification, based on previous years spending, for where and how the money would be spent. Salaries, office rent, advertising etc.
The Premier, as he is wont to do, decides that he wants to have a holiday in Cuba and takes his usual entourage. As a cover he decides to meet with some Cuban officials to talk about European tourists visiting the Caribbean who are interested in multiple destinations. The Cubans don’t mind since Big Mac is picking up the dinner tab.
After a few days and nights of carousing they all return and Big Mac hands the bills over to the Director of Tourism and says "Here, this is tourist related so it has to come out of your budget".
I would venture to say that fifty percent of the waste in the civil service comes by way of direct instructions from Ministers that they have to obey.
Until we start electing a better class of leadership, it is useless to expect better from the civil service
Hey Rabble,
That only explains one side of the issue and that is not making budget. And that would be easily explainable because you should be able to show all the ministerial spending that created the over budget.
The CORE issue and one which I struggle daily to wrap my head around is how any business of any decent size and ESPECIALLY our government can allow and be allowedto go year in and year out without a set of unaudited financials.
Let me explain something. I am in the finance field and while I am not directly accountable for my company’s financials I can assure you that if by the 3rd month after our year end we don’t have a unaudited set of financials to be reviewed by our external auditors HEADS WILL ROLE. Not just ROLE BUT ROOOOLLLLLLLEEEEE.
Let me explain to some of the laymans out there why this is not just a desire but something essential. Initially going into a year you prepare for your department or business a budget. This budget is basically what you expect to spend based on things such as previous years expenditure compounded with expected gains such as increase in staff or falls due to implimentation of technology etc.
Once you have passed your year end you do up a set of unaudited financials and compare them against budgets to see how you did. At this point anything that is excessively over budget MUST be explained but in general these comparisons invoke reviews and during these reviews you can find things such as:
1) Mispostings – Between accounts
2) Errors – Incorrect amounts
3) Fraud – Theft, etc.
It’s not that as a year progresses one would not review monthly to see how you are doing and what is going into an account but there are times this is not done.
Example of how this is important. Just take a look at the Gas Pump fiasco with CIG. A set of financials for this department SHOULD HAVE SHOWN TREMENDOUS EXCESSIVE USAGE. An immediate review would have limited the damages and allowed for the abusers to be caught and recovery made of some of the losses. To be honest simple monitoring should have shown this on a monthly basis.
But let’s not forget what one of the core reasons are for unaudited financials and that is to simply see how well the business has done. I am betting that many of the forecast figures for these departments will be revised HEAVILY once real numbers are produced unless the doctor is making a housecall.
All we need do is to look at both UDP and PPM and their estimates of year end figures to see how far off someone can be. UDP I believe predicted a 5mil excess only to find a 50mil shortfall. That’s 55Mil people not small change.
When departments fail to meet budget their heads are responsible to answering for the reasons why. CLEARLY and EMPHATICALLY this is not happening simply because so many are not even getting to the point of finding out IF they have or not.
I actually see no reason why monthly interim accounts can not be done up for management team to review. If this is done then it would be a breeze to have the annual reports done.
I am wondering whether they are reconciling thier accounts monthly to ensure things such as:
Banks – All items posted and reconciled bank to ledger
Payables – All creditor accounts reconciled and cross checked for authorisations of purchases
Receivables – All invoices passed and payments actually recorded.
Inventory – Stock counts taken to ensure what you say is there is actually there and someone has not stolen items.
Questions as to controls. Do they have them in place? Are they being followed?
I really could go on and on.
You are 100% correct, Dred, but you see they blame the Public Management and Finance Law (PMFL) because it is SO much easier than doing all those pesky boring things you list. They never did them before the PMFL (which is why Government NEVER knew where its money went) but no one ever bothered about it. Along comes the PFML with its inconvenient fiscal responsibility and accountability stuff and – Jesus! -civil servants are supposed to account for their spending!!? Let’s hammer the Law and get politicians who don’t understand it and go on as before. After all, no one ever gets fired for non performance in the civil service.
Coupled with all that is very senior "accounts" people in Government responsible for all this who are there because that’s where they went when they left school 35+ years ago when income/expenditure bookeeping was enough and you have the mess we are in.
If you want to know how complicated PMFL is, go and ask the highly paid private consultant accountants brought in to help the poor dumb civil servants figure it out if (a) they, the private profesionals, have made head or tail of it yet and (b) how much they, the consultants, have been paid so far to not be any further ahead than the civil servants were. Good luck getting your answers.
This is not an excuse for not having the accounts done, but the side of the coin you’re looking at isn’t as clear-cut as you make it out to be.
I believe in "keep it simple stupid".
That being said I could care less about the PMFL. You SHOULD ALWAYS have a up to date set of books. There is no reason between heaven and hell for not being able to do this. What I feel is that some people don’t want to have the books up to date because what it might reveal.
Here’s a statement…..
What are the controls that CIG operate under to justify what departments carry as receivables on their books. Do these departments that actually have a receivables department maintain certain ratios between their ageing such as over 90 days should not be more than 20% of total receivables as an example.
What does that simple thing do? Well simply whenever it does hit this mark your AR collections person should be called in to explain. At this point a review of items in the over 90 days section are reviewed for legitimacy.
What does this accomplish? Well it makes for better collections because no one wants to face the boss right. Next it allows for a better chance at fraud detection. To be honest all items hitting over 90 days should be reported in a special report to the head of finance. This gives the finance manager a chance to spot check the AR for comfort.
Controls are important but my feels is they are well laxed at CIG.
90 Day Review – Boss, I went to collect on that receivable but the debtor called their MLA who called the Ministry who called me to say I shouldn’t bother the debtor. So, if you want me to collect on the old debt, call your boss.
XXXX This is a no brain-er. All you have to do is see how the public’s money has been spent lately. First class tickets for all, five star hotels and meals, Christmas lights, utility bills and this is just the Premiers. Just imagine what has gone on the last 6 years with NO ACCOUNTABIULITY up to right now and beyond. If they could come up with a reasonable report they would have done it long ago but it would seem that when all is said and done the UK will have no choice but to take over the control of the Government just like the Turks and Caicos. Then maybe enough of the public’s money can be spent on the People of Cayman and the businesses they have to keep everything running again. Please soon come. If this keeps up there will be nothing worth saving.
You are exactly correct! And based on the assumptions that used in the document provided to receive a loan, one can easily tell that those numbers were highly optimistic — they won’t be met!
Prepare for the worst and hope for the best. Unfortunately, they utilized the best #’s they could come up with and have wound up in the worst situation.