Report exposes more failures

| 17/04/2012

Auditor%20cartoon%20-%20Micha1115.png(CNS):  A UK expert who reviewed the Cayman Islands Public Management and Finance Law (PMFL) has pointed to the lack of consolidated government accounts as its biggest failing and urged government to rectify this problem with the closure of this year’s accounts as soon as possible. A report by Keith Luck, the former director general finance at the FCO, was released by the Governor’s Office on Friday following an FOI request by CNS and reveals further details of the failure of the Cayman government to account for its spending. Luck pointed to poor understanding and leadership and said the people of Cayman “are without their key controls” because of thefailures, and recommended a radical simplification of the system.

“A significant concern is the absence of robust Departmental Accounts, but it is the lack of Consolidated Accounts for Government, let alone an Entire Public Sector (EPS) Account, that has to be the biggest failing. Without these the Government and people of the Cayman Islands are without their key controls,” Luck said in the executive summary of his comprehensive report. “My principal recommendation however is a strategy of radical simplification. This needs to begin alongside closure of this year’s accounts. It will require a rigorous and resolute focus on simplification, standardisation and burden reduction.”

The British bureaucrat said government had to get back to basics and then re-build, and strongly recommended that the extent to which outputs and output reporting are used to control and drive appropriations is seriously examined.

Luck found that IRIS, government’s core accounting and information system, had contributed to the difficulties in PMFL but these were symptomatic of wider governance issues.  While accrual accounting was now embedded in the system, it was not fully implemented and “understanding is still low in some areas even amongst senior managers,” he said. Luck found that capital accounting still operates on a quasi-cash basis and compliance with International Accounting Standards was inconsistent.

Although less adjustment was required to the human resources element of government, he said that performance management was the biggest challenge and that reform would improve behaviour and outcomes across the civil service.

In his report Luck pointed to weaknesses in leadership and a lack of management sanctions, which meant no one was held to account for the failures. The lack of effective performance management and appraisal was an issue, along with the failure by management to properly delegate. “Some Ministries still double-check and micro-manage which adds to bureaucracy and reduces efficiency,” Luck stated.

The former FCO top accountant also revealed that the Public Sector Investment Committee (PSIC), which should oversee Capital Project Appraisals for all projects over CI$300,000, has never met, despite being mandated in Part XII and Schedule 5 of the Financial Regulations

Of the many observations Luck makes about the PMFL and the subsequent reforms of the system which have led to the pressing problems is the abject failure of government to publish its accounts.

“The most telling indictment of the reforms is the simple fact that the Government, regardless of the party in power, has been unable to fulfil its legal duty to lay accounts in the Legislative Assembly since the reforms were introduced. These missing individual Departmental and Consolidated accounts date back in some cases to July 2003,” he observed.

See the full Luck report below.

Category: FOI

Comments (15)

Trackback URL | Comments RSS Feed

  1. Anonymous says:

    EXCUSE ME BUT…..

    Mickey Mouse is a multi billionare, in Orlando Florida with his own world 'DISNEY WORLD" where every dollar is accounted for; please do not put him in the same boat as our defunked government.

     

  2. Dreadlock Holmes says:

    The civil service, because of it's size, contains a large voting bloc. Any minister of any government that requested some proper accounting or even productivity instead of dillydallying with Blackberries, reading newspapers and long lunch breaks would have soon found itself losing support from the many elligible voters ensconced in the service. Including inlaws and outlaws associated with all of those members. Not to mention government's disastrous lack of funding for the C.S. pension and health care costs in the future. Something I'm the C.S. is aware of. I wouldn't call it extortion per se but the fact remains the civil service in many respects runs the government and calls the shots. Not as could be expected, the other way round. Because of this imbalance if indeed accounting is missing or has not taken place, it is solely because governments have been aware of how they get and stay in office.

  3. Anonymous says:

    Politicians do not want the system fixed.  To do so would make them accountable.  They do not want to be accountable.

    That is why we need One Man One Vote so that they are forced to be accountable.

  4. Anonymous says:

    The CI Civil Service is full of incompetant, corrupt and lazy individuals who should have been fired years ago. The size of this failed institution is its biggest enemy and the culture of its workforce its biggest disability, only the privatisation of many of its departments and services will rationalise its current unwealdiness. If the Cayman people had to pay these public employees out of their own pockets through taxes, they wouldn't be so keen to allow this gravy train to continue. However, the same train will continue to roll on unless the privatised services are opened up to external markets and not the uncompetative and equally corrupt internal market run by a few local names. Make these people work for their high salaries, priviledged positions and gold plated pensions, employment should be based on education, ability and experience and not just because your Caymanian.

  5. Anonymous says:

    This UK expert clearly doesn't know that Mickey Mouse handles the accounting on our island.

  6. Shock and Awe says:

    Couched in the nicities of this report is a far more serious conclusion. The CIG, no matter what party isin power doesn't know what it's doing. And it and always has been rife with incompetent managers and underlings. These individuals are not held accountable for their actions because they are part of the one big happy family called the Cayman Islands Civil Service. Reprimand your neighbor?  Demote your aunt? Fire your cousin?  It won't happen. And they can't tally up accounts because they were never kept. Now that millions have been disappeared and squandered which forced the govt. to take out loans they are expected to as part of the agreement to show Consolidated Accounts for past years. But they have no clue where the money went except they have always been able to cash their paychecks.

  7. boinked says:

    …except that if “key controls” are put in place, the Cayman people would be protected from reckless spending by politicians. Since it’s the reckless-spending politicians who get to decide whether the “key controls” are put in place, preventing them from doing as they will, well, there’s a word for what the people of Cayman are… four letters with an “…ed” on the end… so sad.

  8. Knot S Smart says:

    In other words he concluded that we have a 'Drunken Sailor' running our accounts.

    Or in Cayman Kind / Cayman Speak – 'a Drunken Pirate'…

  9. deepdiver says:

    'Giving money and power to government is like

    giving whiskey and car keys to a teenage boy'

    Lord help us all…

  10. Anonymous says:

    "…because of the failures and recommended a radical simplification of the system…"

     

    Yes, dumb it down for those who still think of accrual accounting as "cruel" accounting. A sad state of affairs.

     

    Perhaps, over the next 10 years after many of the older generation of civil servants retires, this will slowly get sorted. The emphasis is on "slowly".

    • Anonymous says:

      Let's make it dead easy for them, privatize whatever the heck can be privatized and then what is leftover convert to QuickBooks Enterprise LOL!!!  Accounting for dummies but since it is simple and straight forward perhaps they might actually be able to produce a set of accounts!  Oh wait, that's right the departments that are not complying are headed by individuals who don't care as they will just be put on PAID admin leave if found to be obstructive and are probably some of those departments that refuse to move into a half empty Government building….how do these department heads get to hold on to their jobs???? 

    • Anonymous says:

      The new bred of civil servants who have the qualifiications are now in the high seats and the system is failing.  The older ones had to work hard and were always discriminated against by certain individuals.  Now, those same leaders are the ones who have the system that once worked, not working.  Check out what caused the to system to fail.  Put some energy and know-how into action and get things moving.  Is that so hard to do?