Accounting for the cash

| 16/01/2012

How governments collect and spend public cash is one of the key issues on which they are judged, but here in the Cayman Islands no one really knows how this or the previous administration actually spent our money. As the UDP approaches the last year of this government, the voters still don’t have access to any meaningful account of how it has actually spent the people’s cash or how successful it has been at collecting what it is owed.

In his latest update on the state of government accounting, the auditor general went very easy on the government. No doubt exhausted by the efforts to try and have it produce anything at all that accounts for what it is doing with the money it collects from the people, and not wishing to undermine the relatively minor step forward of meeting accounting deadlines for the first time in eight years, he offered praise and encouragement.

Sadly, however, the failure of government to account for how it has collected and spent our money means that once again when the voters go to the polls in May 2013 they will not really have a clue how the people they are voting for will spend the cash they collect from them. They won’t know where government has failed to collect what’s owed and whether they are wasting cash. They won’t know where money has been well spent and provided a positive outcome because what little information comes from government cannot be relied upon or is meaningless.

Despite claims by government that public finances are being addressed and that it is catching up when it comes to genuine accountability to the people, this is simply not true.

Of the 38 entities that are obligated to produce annual reports only eight — yes, eight — have been made public for even the first financial year in office of the current government. Of those eight only four statutory authorities have unqualified reports that the public can rely on; the other four have qualified reports, which means the auditor general could not be sure that the information supplied in the reports was accurate orcredible. So today there are in existence only four statutory authority reports that tell the people how public cash was spent in the financial year from 1 July 2009 to 30 June 2010. In essence the entire public spending since the government took office with these four exceptions – CIMA, the ERA, CINICO and the Turtle Farm — remain a mystery.

Consequently, some 16 months away from an election the people have no idea how the current government has fared when it comes to spending the people’s money or collecting it.

Has government spent enough on education, not enough on crime fighting, too much on roads or too little on the poor? Has it collected customs from all the right people? Are fees still outstanding and why? Are collection systems themselves efficient? Should government spend less on collecting money or more money to ensure everyone pays their dues?

Legitimate questions about public finances are the most basic reasons why one group of politicians is voted in over another. It will be impossible for any voter in the Cayman Islands to have an accurate idea when they go to the polls how the representatives they are about to vote for will spend their cash. 

Often politicians may say they are spending money on one thing and collecting from another as declared in the budget, but the budget documents are a wish list not a reality and difficult for the man in the street to properly interpret .

Unless the people can see and understand clearly the actual amounts collected and the actual amounts spent and the reasons, they cannot make an informed decision when they go to the polls.

The issue of government finance is not about meeting deadlines and obeying the requirements of the law. The Public Management and Finance Law was passed to make government account for how it spends the people’s money – our money not theirs, ours.  The annual reports should be telling the people what each government department spent and why but the failure of government to produce them year after year after means the government is simply unaccountable to its employers.

When a government is voted into office we trust those people to collect and spend the money wisely or at the very least as it claimed it would during its election campaign. Even the richest governments do not have an infinite supply of public cash and even in the best of times must make decisions about spending in line with the wishes of the majority. During global recession how the money comes in and goes out is even more fundamental to the voter’s decision.

Given the persistent failure of government to give the people a true and meaningful account of want it has done with the public’s money (that the people can actually understand) means every single voter is handicapped at the polls. The Cayman electorate is not able to make an informed choice about which government they can trust to spend their money in the way they want.

In the end, that’s not democracy.

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  1. My2cents says:

    I think the overriding problem is there is no WILL by the leadership to recognise the problem and make the changes. I believe it SUITS certain people to allow this to continue so there is no real tracking of what is spent where. It is easy (or easier) for public money to be diverted to other places when the waters are already muddy. Classic case of smoke and mirrors.

  2. Confused says:

    Zero accountability at every level is why Cayman is doomed.

    Start at the very top and work down, the concept of accountability, performance management, collection of data and lack of proper implementation olicies is why we are the next “Jamaica” which seems to be the objective of the political machinery and players.

    Cayman must Elect people with proven abilities and management skills, get rid of the dead wood and dinosaurs who don’t understand this isn’t 1982 and hold CIVIL SERVANTS at all levels especially in senior management accountable is the only way to fix Cayman!

    • Anonymous says:

      Cayman will never have the will to "fix" what it has created as a "society"  

       the Caymamnian way of doing things (Caymankind) is doomed.

      The good news is there are many who will benifit after the fall.  The bad news: Once again itwon't be the working class.

      In other worlds your "leadership" is doing whatever it wants to feed itself.  Screw the people.

      Whoever buys out Cayman will of course do whatever it wants to feed itself.  Human nature.

      As an expat I see only better days ahead after the fall.

  3. Anonymous says:

    well done cns…….its a pity the compass can't write an editorial like this……

    • Anonymous says:

      Compass gone too soft, they need to harden up and do some investigative journalism, like the journalists in other countries.  

      • Anonymous says:

        Gone soft? This is the hardest the Compass has ever been. It used to rely upon GIS press releases for news.  

  4. Klump says:

    Cayman is riddled with corruption and it is getting worse. It is one reason I am leaving.

  5. What?? says:

    Seems ironic while the Premier has flown all over the world signing agreements to allow others to find what people have done with their money he is unable as Minister of Finance… to tell Caymanians what he has done with theirs.

  6. bradley says:

    It was the same thing under the PPM government. The voters did not have access to any meaningful account of how government funds was actually being spent. After the PPM reign, there was a public outcry at the deficit being 81 million dollars. There was a sense of uncertainty because there was no transparent auditing of the monies. Did we really fall into an 81 feet hole or was it really a 181 feet hole???  Still to this day, the public has no transparent record.  Yet we are so anxious to put the same people back into office and trustworthy positions.  Will the UDP at least make a change whilst they have a chance?  Still… we don't know nor have an idea of what is being spent.  

    • Anonymous says:

      We have no chance in hell of ever proving if what UDP asserts about the 81M deficit is even true, because under their watch, the regulations were changed to allow for those older financial records to be scrapped because the accounts were too problematic to sort through and the AG had no way of auditing them to verify their accuracy because of the "inadequate" info that was submitted to him and dismal proper record keeping.  Because the carry-forward figures were garbage and was holding up the completion of the more recent accounting reports for more recent years, the records for certain previous years were scrapped.  The more recent reports, by the way, have now been produced in a more timely manner but according to the AG, most are still quite lacking in information (and proper record keeping) to verify the accuracy of many of the reports.

      So for all we know, it was 81M deficit, or 400 Zillion, or none at all, or 5M surplus for all we know,  but hey, it's all the same to us – doesn't stir us in the least as we will remain a passive people who demand nothing from our leaders.   Nothing changes, unless we, as a people, start demanding more from our politicians and civil servants and that they all do their jobs properly, for once.

      • Blue Berries and Red Apples says:

        he he he!  fuzzy math and party poli-tricks from both sides

  7. The Spin Cycle says:

    Important viewpoint – I hope it wakes people up to a serious problem as it's curious how in many cases the common view has government as something apart from ourselves. Even in countries where an auditor has actual figures to work with, the sad reality is – the money has been spent. Gone. Can't get it back. Even though the expenditures are questionable, or stupid. I've wondered about this, and the inaction of the public. When it comes to accounting for our money and where it goes we are out of the loop. Too uneducated to understand something so complex as public accounts. There is certainly a disconnect and it may have it's roots in our attitudes towards authority figures or what we look at as authority in general harkening back to our schooling. Not allowed to speak out of turn, or bring up topics outside the text. We learn how to follow directives. Without questioining. And often how these gems of wisdom were arrived at. Critical thinking is not part of the curriculum and later, as adults with the ability to vote, the same scenario happens when we are asked to naturally assume someone who has reached the offices of government or aspires to must also be capable of some arcane knowledge we couldn't possibly grasp. The problem worsens when government, in it's ultimate wisdom decides we aren't entitled to see what has happened with the money they've had access to. Or how it's been spent, because it was their money. Convinced of this government is separate from us. But, now it's time to turn this around. The money, in fees and all the other ways it's collected, can't be recovered but we can insist on as part of an election divulging our present finances.  Is there something wrong this concept? Would you allow your bank to keep secret how much you have in your account?

    Simple requests: How much did you begin with? What was the deficit? In what state are the accounts now? If you have called an election and wish to continue spending our money. That is what we require. Demand. Given the resources we have paid for it's a simple procedure. And one that we insist on. Without that information forthcoming –  forget it. You won't get our vote . Because, and history backs this up, these figures are used too often as an excuse. Ohmigod! we didn't know things were that bad! Or, the opposition: this government is wasting your money and not like we did when we had it!! Trust us.

    In other words without an – accurate up to date public accounting as a constitutional requirement and – as part of the election process – we are wasting our votes.

  8. Anonymous says:

    What a SHAME and DiSGRACE for a so-called leading "financial centre", that they can't get their own books right.   Banana republic is the more accurate term.   Each party that comes into power promise accountability under their term, but fail dismally in practice !   How do they really expect to attract investors here with promises of a stable economy, stable climate for doing business and stable way of life, when the country does not even know its true state of finances and whether or not our money is going down the toilet bowl.    So when our politicians go up on platforms to speak about deficits they inherited and how they are managing to turn things around so we can finally have a surplus in our budgets in the near future,  they really are just making things up, because of the Auditor General himself don't have a clue what the actual accounts presented are really telling him, then you can bet your bottom dollar the ruling government doesn't either.  Therefore all their budgets and/or projections for the future are simply based on inadequate or misleading or inaccurate accounting reports, because we don't know if they can be relied upon or not.  In other words their future budgets and projections are based on a false premise to begin with, as they do not know for sure what they have spent on and what they have collected in the past year(s).  The ruling governments over the years up to present time, only tell people what they want to hear before, during and after elections, and when people hear mention of "promised surpluses", it gives them a false sense of comfort that things will get back on track.  In a situation like this, where there is no true accountability, corruption and white collar crimes can flourish and funds can easily be manipulated by those who have unscrupulous agendas, simply because those who are being paid to do their jobs (and I include the department managers / heads as well as those under them who are being paid to keep proper accounts),  cannot properly advise how much revenue was collected and  where the money has gone.  WHAT A JOKE.   But then, you get what you vote for – inept politicians, governing over an inept civil service.  BUT, I blame the UK for allowing things to get this bad in the first place.  When all is said and done, they have the ultimate responsbility to ensure good governance and that includes, good accounting.  Until then, all Auditor Generals will continue to be frustrated in executing their duties properly.  BANANA REPUBLIC.

  9. Anonymous says:

    Most "systems" are comprised of three major areas.


    1. TOOLS: The Cayman Islands Government uses Oracle eBusiness Suite to manage its accounts. This is a world class accounting system that is used by many Fortune 100 private companies and governments around the world. It is a very good tool indeed.


    2. PROCESS: The Financial Management Law is a good, well thought out process.


    3. PEOPLE: People must be trained and motivated to use the tool and follow the process. The civil service has received extensive training in the usage of both Oracle eBusiness Suite and the Financial Management Law.


    Why are finances not tracked properly? It must be the people.


    The fix? We probably must wait until a whole generation of civil servants retire to be replaced by a new generation who can understand and apply the training in how to use the tools and follow the processes. This is not a quick fix but it will eventually happen (I hope).

    • Joe B says:

      Unless it totally fails andbrings down the Caymanian Government/people/islands.  What do you think will happen first?

      • Anonymous says:

        I think your scenario is more likely to happen first.  Asking politicians and civil servants to do their jobs properly, seem an impossibility – blind leading the blind.  It it all crashes, let us hope at least something good might rise from the ashes to replace what was there before