Archive for July 18th, 2008

AG report aims to improve accountability

George Town (CNS): The latest report by the Auditor
General’s office, “The State of Financial Accountability Reporting in
Government”, has been published to help focus attention and resolve
the problem rather than point fingers, the office has said.

“This is not just a scorecard. It is a thoughtful report about how
things can be improved,” said Auditor General Dan Duguay. The report
details why the 37 government ministries and departments have failed
to submit adequate financial reports, but it also provides
recommendations, and he says it is not just down to the Financial
Secretary’s office to resolve the problem.

“This is everyone’s problem and we all could do more and we need
everyone to work on this,” he said. “The report has been designed to
give people the information so they can better understand what the
problems are, where things are going wrong and how to begin resolving
them.”

He noted that his own office, the civil servants in the relevant
departments, the Financial Secretary’s office and Members of the
Legislative Assembly have a role to play in improving public
accountability, and that that until accountability improved the new
system under the Public Management Finance Law could not work
properly. Public servants were competent in justifying to the LA their
cases for receiving funding but not so good at accounting for the
money once they got it, he remarked, adding that members needed to
push for more accountability. Once they had voted to give funds, they
needed to ask where that money was being spent.

“This auditwill help them press for more accountability because they
will be able to see in detail the situation in each ministry, why it
has reached this point and what can be done,” he said. “Without this
type of information it is hard to press for any kind of real
accountability or manage government spending. It is down to a simple
matter of MLAs asking ‘how did you spend the money?’ and government
departments being able to answer the question.”

Duguay described the report as a snapshot but an important one, which
revealed information to the wider public in which they had an
interest, and they had a right to know how government spends public
money.  Although not wanting to give exact details of the worst
offending ministries in terms of accounting problems, he said that the
important thing was to look toward improvement for the future.

“When we do the report again next year we want to be able to show how
departments have tackled the issues and to say they are doing much
better,” he said.

The HSA, however, was quick to say it was doing much better already in
a statement issued by the Acting Chief Executive Officer denying
accusation’s in Cayman Net News that it was one of the worst
offenders in the accounting delay. Lizzette Yearwood said the
department was not delinquent or in breach of accountability
guidelines in its annual financial reports. She said that the AG was
in receipt of financial statements from the last two fiscal years of
2005/06 and 2006/07.

The AG acknowledged that the HSA was certainly improving but said the
2003 accounts were still in question as there was not enough
information. There were no financial statements at all for 2004/05 and
he was not sure there ever would be. Duguay also said that, while he
was very pleased to have received the last two year’s statements,
there were still questions surrounding fiscal issues at the HSA.
However, he also wanted to give credit where it was due.

 Ã¢â‚¬Å“Since the HSA became an authority there were accounting
problems, and while there are still some questions and missing
accounts, the Authority is certainly making a serious effort to
improve the situation and we are very happy to work with them to help
address the problems.”

In another response to the report, Rolston Anglin, Opposition MLA for
West Bay, said urgent action was needed. “This is an issue that has
been consistently presented to the government and to date they have
shown no interest in providing the financial accountability that is
required to the people of the Cayman Islands, and we should expect
more from them in resolving this situation,” said Anglin, who noted
that the PPM had stated in its 2005 manifesto that party could be
trusted to comply with the Public Management Finance Law. 

“This is nothing short of irresponsible. We all understand that the
various bodies have had some difficulties in getting their accounts in
order. But how can the government, having made such promises as they
did in their 2005 manifesto, simply let the situation get worse? 1.5
billion in accounts is a lot to explain. The people of the Cayman
Islands deserve an explanation.”  

Although the return of accounts is a civil service matter, Anglin said
the direct responsibility of the PPM Administration in dealing with
the issue could not be dismissed by saying it is just a public
officer’s job.

“In 2005 when the PPM promised better fiscal management and
accountability, we have to assume that they had a plan for how to
ensure things like this do not occur. And when a crisis like this
occurs, we should look to them for accountability and a full
explanation,” he added.

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Chapell takes UCCI reins as Syed runs

George Town (CNS): In the wake of reports that the
former president of the University College of the Cayman Islands
(UCCI) has disappeared again from his last known position in Canada,
the Board of Governors said in a statement yesterday that the college
Dean, Dr Brian Chapell, had been appointed Acting President of UCCI
since the beginning of June. The board said it had the utmost
confidence in Dr Chapell and no doubt that he would continue to make a
significant and positive contribution, but that a Selection Committee
of the board was seeking a new president.

“Clearly this is a major undertaking of great importance to the
university, and it may take some time before a permanent appointment
is made,” the board said.

Following the disappearance of former president Dr Hassan Syed and the
revelations of financial irregularities discovered by the Auditor
General’s office, the board appointed Deloitte to undertake a further
audit, even though the Auditor General Dan Duguay had already reported
his findings to the police and an FCU investigation was underway.

In its statement on 17 July, the board said that Deloitte had made a
presentation of its findings together with recommendations to the
board.  “While Deloitte’s presentation confirmed that there were
in fact internal controls in place that appear to have been breached,
they have also made recommendations on how those internal controls
could be strengthened. Deloitte’s final report is with the Board,” it
said.

The board also admitted that it had recently met with Duguay in order
for him to present his full findings to all members, something that
the AG had been requesting since the beginning of May. “Both
presentations have been instructive to the Board, and the Board is
responding to their findings with a view to implementing changes in
authority at an administrative level as well as strengthening the
system of internal controls over the financial transactions of the
University,” the statement said.

The board said that it was now meeting frequently to ensure that “all
issues are fully addressed in an efficient and professional manner”,
though it gave no indication of the details of those issues. It did
say, however, that it is working to complete the financial statements
of the University for the year end 30 June 2007 and planning the audit
for the year ended June 30, 2008, with a view to completion this year.

As the Financial Crimes Unit is carrying out an investigation, the
board said it was not in a position to discuss any aspects of the
former President’s transactions, although CNS understands that the
irregularities, include purchases from Tiffany’s jewellery store at
the Ritz, as well as vacations and flights. The full details of the
irregularities and amounts that Hassan allegedly defrauded are still
unknown but it is said to be in the hundreds of thousands of dollars.

When CNS contacted the Royal Cayman Islands Police Service (RCIPS) in
wake of reports that Hassan had disappeared again from his last known
location in Canada, the police said it was still too early to look at
issues of extradition. However, if Hassan is required to return to the
Cayman Islands in regards to the enquiry or to face justice, even if
he is still in Canada, Cayman has no extradition agreement with that
nation.

Back in August 2006, Education Minister Alden McLaughlin had said that
Syed had a PhD in Computer Science, an MBA in Marketing and a BSc in
Civil Engineering, and that he was pleased to have “an educational
professional of Dr Syed’s calibre at the helm” of the UCCI. However,
following Syed’s departure, it was discovered that he had never
received a Phd and that he may not have had the work experience he
claimed. After resigning from the UCCI declaring a severe illness, the
revelations regarding the so-called financial irregularities surfaced.
A few weeks later the former President turned up Toronto’s Centennial
College.  Tad Stoner of Cayman Net News then revealed in a report
published on 8 July that Syed had also left that position, citing “an
urgent family matter”.

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