CFOs not helping

| 22/04/2010

Cayman Islands News, Grand Cayman Island Headline News, Cayman government finance(CNS): In its management response to the auditor general’s latest report the Ministry of Finance said the task force had “encountered a magnitude of challenges” in its attempts to correct government’s accounting deficiencies. It said chief financial officers were unavailable to respond to queries and a there was a lack of internal controls, policies and procedures. It also cited a lack of support for transactions made by many of the government entities as one more of the many issues preventing the ministry and the task force from resolving the problems and producing the reports.

The ministry also warned that it would require a transition period to address the accounts problems, when the PMFL would be relaxed until 2016/17, removing the requirement to do annual reports and just submit financial statements.

The latest report from the office of the auditor general is an update on the State of Financial Accountability Reporting. The first edition was published in 2008 and the second was released to the public yesterday, 20 April. In the updated report Dan Duguay reveals that, two years on, the government has made little if any real headway in tackling the delinquency in its financial accounting, despite having engaged a task force and spent around $1 million more on accountants in this financial year.

In its response to the damning report, however, the Ministry of Finance, which took over the responsibility for the situation from the portfolio of economics almost one year ago, admitted that there were a number of major impediments facing the task force, despite the fact it and the ministry was working hard towards producing the outstanding financial reports.

“These challenges and issues include the lack of support for transactions, the lack of internal controls, policies, procedures and oversight, the unavailability of CFOs to respond to queries, the cumbersome manner of securing the necessary permission to view each ministry’s IRIS data and the consolidation of the government’s financial statements,” the ministry said. It also stated that without proper teeth to sanction ministries, portfolios or statutory authorities and government companies, neither the Ministry of Finance or the task force were able to produce credible and timely financial information. It said it was “not possible to produce the accounts if chief officers did not willingly play their part in the reporting process,” as specified under the Public Management and Finance Law (PMFL). “The Ministry of Finance does not have authority to enforce this lack of reporting,” the ministry added.

However, Auditor General Dan Duguay believes they do and that under the PMFL the ministry can hold the CEOs and CFOs responsible and set consequences for their failure to meet the demands of the law. The AG said in his first report that he had stopped short of recommending that the financial secretary take responsibility because he believed it would be clear in everyone’s mind that strong leadership would be required from somewhere to address this issue.

But the AG said this has not happened and there was little evidence of commitment and leadership with regard to addressing the problem. Duguay noted while it was still the responsibility of each CFO to get their own accounts in order, it required central leadership and the problem would never be addressed until the right person with authority took responsibility.

Duguay therefore recommended that government appoint a leader that would have that authority and would make this their priority. The ministry responded by stating that it would welcome the assignment of a leader provided that the person was given enhanced governance structures that would hold COs accountable.

The ministry also stated that the reason why the accounts were proving so difficult to do was because of the current governance framework. As a result the ministry had submitted to Cabinet a proposal to centralize the core government’s accounting function under the Ministry of Finance which would then hold COs accountable.  A proposal has also been made to relax the reporting requirements in the PMFL and allow stand-alone financial statements until 2016/17, giving government entities a chance to catch up and develop what the ministry said were appropriate financial systems.

One of the problems, however, with only presenting financial statements is that the figures are not placed in context for the wider public to understand what the government is doing with public funds.  Under this proposal the man in the street is unlikely to be able to get to grips with the full state of the public purse and the extent of government expenditure or, for that matter, cuts for another seven years.

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  1. Anonymous says:

    This has been a problem for the past 4 years – each CFO has their own version of approaching a problem – that wasn’t too smart!! so maybe our problem stems from no uniformity and in the end a big mess.

  2. Anonymous says:

    I agree with those posts below that suggest that if the "task force" version is correct then all the CFOs who did not cooperate ought to be fired. I just don’t think that that would be enough though. If the CFOs are not doing their jobs with the knowledge or collusion of the relevant Chief Officers then those Chief Officers also ought to be fired. On the other hand if the "task force" is just trying to provide excuses for incompetence then clearly the members of the "task force" ought to be fired.

    Of course none of this will happen as their is no accountability of the type that matters with anything to do with our politicians or the civil service. Just sign me, "A FED UP CAYMANIAN. 

  3. Anonymous says:

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  4. Anonymous says:

    The UK will soon fix the problem, maybe she is just giving us enough slack before she decides to rope us in. I just hope the CS is smart enough to realise this before they come to end of the rope.

    • Anonymous says:

      in which case we will be roped in, no matter what the CS and/or Premier do.  We could be another T&C and guess where A Travers will be and guess where the Premier will be —  one up there with the elite UKers and one down there with the locals

  5. Anonymous says:

    " its management response to the auditor general’s latest report the Ministry of Finance said the task force had “encountered a magnitude of challenges” in its attempts to correct government’s accounting deficiencies."


    Is one of them incompetence?

    • Anonymous says:

      Without jumping to conclusions, but noting the state of things, it would appear that there is a possibililty that the incompetence is not limited to just one party.

  6. Anonymous says:

    more alice in wonderland stuff from the civil service….

  7. Anonymous says:

    Sooooooooo maybe i don’t have to pay duties now, or tag and inspection costs?

    I mean if CFO’s can get away with not doing there job, and no repercussions then i guess i dont have to follow any law.

    Right is righ and wrong is wrong no matter what scale, but especially when you have the entire people to look out for, but with that kind of salary i guess you and your family can live somewhere else. Ahhhhh i wish i knew somebody to get in there, i’ll just have them wire some money to my account, don’t worry nobaodywill no where it came from!!!

  8. Anonymous says:

    another reason why DAN needs to stay!

    Cayman government is a joke, none of the MLA’s have the guts to cut the civil service because in the next election they would find their selves stuck with a benz jeep and can’t pay the loan!

    The civil service is a drain on the country no country in world can survive paying the high salaries and covering all the benefits they recevie!

    it’s a shame that a whole year has gone by and we are in a worse position than before,  this don’t look like the better way forward to me! i really wish the UK can come here and take over the LA, that needs to be done becos the fools n there can not do it!

    • Anonymous says:


      “…another reason why DAN needs to stay!”


      …and the more that we find out about our failing governance system we understand better why the FCO, the Governor, the politicians, the Civil Service management and many Board members want to get rid of DAN – their tricks are being exposed.


      There are many reasons why Dan needs to stay and all of them benefit the public.


      This is the beauty of Accrual Accounting, once it is working then the crookedness begins to come to light.


      It is very easy to understand why so many people want to get rid of accrual accounting and go back to the previous system where it was easy to cover up the deeds of crooks.


      When DAN goes the new Auditor General will be like most of the rest, we will not remember their names once they leave but there is one exception, Nick Treen in the early 1990’s, they got rid of him too, only because he also did his job excellently.


      Please someone lead a DAN MARCH, from the Governors to the Glass House!  Oh how I wish I could lead the march.

      • Anonymous says:

        Maybe he did his job, but he needs to be rolled-over like everyone else after he has done his 6 years to give a Caymanian a chance at the job.

  9. Anonymous says:

    Save money, fire the CFO’s!!!!

  10. Anonymous says:

    Does it have to get worse?                 

    Please UK step in now before we are sunk.

    • Anonymous says:

      HAHA the same people that returned the Tempura cops to us?

      • British Bulldog says:

        Precisely. And if you think the British are any good at fiscal management you are sadly mistaken.

    • Anonymous says:

      really!  if they do we’ll be sunk & buried

  11. Anonymous says:

    How can you implement a law such as the PMFL and expect it to operate successfully without common "internal controls, policies and procedures" throughout the Government?

    Do we then have to wonder why we have such a mess ?

    So who was the architect, construction project manager and builder for the PMFL?

    • Anonymous says:

      Surely, the fault is not with the poor Civil Servants who have to work with this mess, is it not due to the foundation laid originally for the PMFL?

      How can one reasonably expect to implement such wide ranging change management and not do it properly from the outset?

      Is this not why New Zealand also got rid of it?

      • Anonymous says:

        Anon 11:19:

        You are so ignorant it must be just wishful thinking that the incompetence and unaccountability of our civil service can just be wished away by a comment like yours. New Zealand has not gotten rid of its financial reforms based on fiscal prudence and remains one of the strongest economies in the world today with a real and healthy handle on its national debt.. Where it differed/differs from Cayman is that it is not afraid to insist its publicly paid servants do the country’s will as set out by the elected government and measures them with performance assessment and takes action if action is needed.

        Now wouldn’t that be something strange? Ask the Governor or Deputy Governor when they last did a performance appraisal of  Cayman’s Chief Officers. Go on! And then get back to us with the answer.

        • Anonymous says:

          A question was only asked?

          Your response however is not commensurate with the other major points of the original poster’s assertion, such as a) Foundation laid and b) the process of change management.

          Since you are obviously so well versed in the affairsof New Zealand, perhaps you could comment on the how their foundation laid is different from ours for the PMFL, specifically in relation to the two missing points of your argument.

          • Anonymous says:

            I HAVE NO IDEA WHERE THIS GOING: But I want to hear more!

            Thanks to all of the posters below about New Zealand’s system of fiscal accountability in government.

            I seriously want to hear possible answers to this problem, not just more frustrated sarcasm and complaints. Caymanians don’t want to just sit back and complain, but they need help if they are going to suggest answers.

            Is New Zealand’s management model one of the possible answers? If so, the people of Cayman are still in charge and we can make change happen.

            Please keep these good ideas flowing, that is the only way we are going to learn how to be constructively critical. “Caymanians Can Take Charge of Change.” Not by joining political parties and following ambitious leaders! Politics is not a religion nor is it about loyalty to a tribe and politicians are not Rock Stars, they are just elected servants with a lot of limitations. It is the citizens who keep them honest and keep them moving in the right direction, not the other way around.

            Citizenship it is about each person, every single Caymanian, fulfilling her (his) individual responsibility by learning more so that she can vet the actions of her leaders by recognizing what is stupid and incompetent. The answer is not complaining but working hard to find new answers.
            Lazy people join groups, appoint leaders and then abdicate (give up) responsibility by letting the Leader take over and do whatever he wants. Well your job is never finished. Now what is the answer to this mess? Looks like it needs to come from the outside.

    • Anonymous says:

      Anon Thurs 7;59.

      The answerto your question (which is (typically in the present debate) put in the sort of way that would like a one person answer who we could metaphorically stone to death) is complex. The prime movers of demand for fiscal responsible government reform in the Cayman Islands (in the 1990s) were: George McCarthy, Roy Bodden, Joel Walton, Kurt Tibbetts. Opponents were Truman and his merry band of men plus most of the Permanent Secretaries of the time who realised they would have to actually become active and explain what they did with the millions they were given.

  12. Anonymous says:

    CNS what happen to the former News Article on the AG’s report?

    CNS: It’s just dropped further down the page. You can also use the search function to find articles.

  13. livingcayman says:

    I wish someone would listen, but they never do.  Since Government does not want to cut Civil Servants, they better cut someone.   Why not cut the CFO they have proven that they cannot do their jobs and is just there to collect the money and perks that come with the job.

    It is time that you start cutting the fat, the UDP and PPM has both proven that they cannot manage forefront at home and it may be best that the Mother Land come and take over for while clean house and put us back on track.

    Cut the CFO they have to go, and the time is now.

    • Anonymous says:

      The Mother Land’s house is in a bigger mess.  If she can’t clean her house, how can she clean ours?

      • Certified says:

        The UK’s house is in a mess because it had a party in government that spent loads of money that it didn’t have creating loads of jobs in the public sector for people that would continue to vote for that party. Sound familiar?

        Like all Ponzi schemes, they have finally run out of other people’s money. The Labour party is about to do ‘a runner’ (they are not trying too hard to be re-elected) and leave someone else to answer the bailiff’s knock.

  14. Anonymous says:

    The last paragraph of this CNS report above cuts to the core of the matter. It is absolutely disgraceful that no civil servant from the top to the bottom of the civil service has been disciplined or otherwise held accountable for this total shambles whereby public funds are being spent and no one will say on what.

    And by the way, the Ministry of Finance which "has taken over the responsibility for the situation from the portfolio of economics" consists of exactly the same people as the portfolio -same Financial Secretary, same Chief Officer. So that sort of statement is a classic civil service sleight of hand to pretend that new brooms will sweep clean. They won’t and nothing will happen to them for not doing so.

  15. Roadblogger says:

    This is very similar to what is taking place in the States with regard to the banking industry in other words "they wouldn’t…..would they, they didn’t…..did they??"  When all evidence points to something very fishy going on we still hang on to the same misguided notions.  Our Faith-Based precepts for that is all they are about how these organizations, governments and banks, operate are being shaken and yet we would still rather believe the spin. 

    "We were just too busy, we’re unavailable, no comment, we can’t find the information, it’s too complicated to describe right now, we need another few years and in the meantime we don’t mind getting huge salaries-FCO’s and bonuses- Bankers."

    "Trust us we know what we’re doing with your money even if you don’t."

    As children, we were told fairy tales to get us to go to sleep, and now as adults we are still being asked to close our eyes and dream.

  16. Cull away says:

    The departments have spent the last few weeks coming up with nonsense plans to "cut costs" without cutting jobs, when we all know that job cuts is what we need for the good of the country.

    If they don’t come up with a 10% job cut then I am moving in favor of a lottery – a lottery for who loses their jobs.  These selfish civil servants have had their chance.

  17. Billy Five Patties says:

    Why were the CFOs unavailable ?  Where they :

    1.  At a bar playing dominos ?

    2.  Off island on a fact finding mission ?

    3.  Afraid of what investigations may uncover and unwilling to be held accountable ?

    Accountability is an anathma to a generation of civil servants.  Take this opportunity to cleanse the Augean stables.  Cull the dead wood and find a bunch of dynamic aggressive younger folks willing to accept the realities of the modern world,  deal with these problems and whatever consequences they generate

    • Anonymous says:

      I thnk they were off somewhere on a long vacation looking about making certain adjustments that were paid for by Government funds that could’ve been saved for something worthwhile.

  18. John Evans says:

    Two very interesting statements –

    "Chief financial officers (CFOs) were unavailable to respond to queries and a there was a lack of internal controls, policies and procedures," and, "a lack of support for transactions made by many of the government entities."

    Just about anywhere else in the world the powers that be would have added two and two together to make the conclusion that these factors might just be connected.

    As they clearly haven’t done that here let’s try it from this perspective – senior civil servants are spending public money on unauthorised (and apparently undocumented) outgoings and don’t want to discuss it.

    So the now retired governor wastes CI$10 million on Operation Tempura/Cealt but fails to launch any kind of formal investigation into what might (or, in fairness to those involved, might not) be fraud on a massive scale within the CIG.

    I would respectfully suggest that suspending the uncooperative CFOs without pay until they cooperate might just concentrate their minds on what they are paid to do. Or better still why not simply sack them for failing to comply with their contracts of employment.

    • Anonymous says:

      Not their contracts!  James Watler as head of the Civil Service Union has made it clear that their contracts are iron-clad and are unilateral. Pretty amazing but it seems to be true.

      • Anonymous says:

        Just turn off the tap, Stop the flow of money.

        Tough Love is the only way that children and adolescents learn where the limits are: they cry, they scream and they bang on the floor, hoping we will change our minds, but if we stick it out they have no choice but to they grow up. That’s called good parenting. What makes a good citizen?

        Whatever it costs to address this issue it is cheaper than letting it grow unchecked forever. If this craziness isn’t stopped now, while the economy is tight and we don’t have money to throw away, do you think it will get fixed when the easy money begins to flow again?

        Imagine how much good a cost efficient, tightly managed, fiscally responsible government could do for Cayman. We would have more than enough money left over for new roads, schools, community centers and all those youth development programs that everyone is begging for. We might even be able to make Cayman look clean and attractive.

        Every time you hear of a child that has gone astray or missed the chance to reach her full potential, visualize the millions of dollars a year that are being spent on civil “Servants” unproductive pay and ask yourself why a country that gets so much money spends so little on the future of its population. Are we better off giving the money to government employees and their wasteful, unaccountable expenses or should we be investing it in our children? Think of all the Billions of dollars that have passed through government hands over the last 20 years and ask yourself: where is it? Can you see it in the young adults of today and the well manner, well educated children eagerly rushing to our modern schools?
        Recessions are painful but they are also the best time to make the really hard changes. Let’s take advantage of this opportunity and seriously reform the system by first saying: "NO, Never Again" and then let’s make sure that we never mix up the difference in meaning between the two words, "Employment" and "Entitlement" again. Civil service employees work for us, not the other way around.

    • Anonymous says:

      And what is so hypocritical about this whole fiasco, socall, Anti-corruption Team from the UK, is that the core of their government, the Member of Parliament are stinking with fraud and corruption. They are so caught up with us and not them own selves –

      • Anonymous says:

        at least they can produce lists and evidence of the expenses.

      • Anonymous says:

        Nice listing but can you imagine the Cayman version of this?  Now that would be something to read.  I’m sure all of our favorite government characters would be involved!  Oh, and gas stealing civil servants (I know, I know, innocent until proven guilty…)

      • Kermit says:

        The problem was not the MP’s but an outdated and over-complicated expenses system which did not operate well in times of rapidly increasing house prices.  There is no evidence at to link the conduct of the executive or the legislature any allegation of corruption.  Only 4 MP’s have faced any charges – that is less than 0.75%.  The expenses scandal is hysteria and the parties reacted badly to it as an election was looming.  The simple answer was the MP’s pay should be increased but that was politically unacceptable.

    • Anonymous says:

      Everything you say is bang on and it’s really frustrating that there is a very good chance that nothing will be done.  There just seems to be no accountability whatsoever and although it comes up in the news day in and day out, the powers that be just do not care enough to do anything about it.  Perhaps as it would also rain on their parade.  Pure nonsense.

    • Anonymous says:

      If the problem is the new PMFL why dont they just admit that and get something that can work and also "teeth"!

    • Anonymous says:

      You are right!  Also, the media should print a comprehensive list of the uncooperative CFO’s with their names and the departments they are responsible for.  Maybe naming and shaming will get some results!? 

      • Havana says:

        Hello!!! I would love to name a few but then again, where I work, I’m sure they would find something to come down on me about the next day. Things that make ya go hmmm……..

  19. Anonymous says:

    Haha, what a mickey mouse operation we have going here!  When will this nonsense ever stop?!

  20. Anonymous says:

    Please tell me if this is not correct: if PMFL is "relaxed" until 2016 0r 2017, that means some clients and statutory bodies who not have complied since 2004, would have 14 or 15 yrs? Thanks.

  21. Anonymous says:

    It seems like we could start saving money by getting rid of all the seemingly non-existent CFOs.

    If they are not performing there is no reason to keep them on the Governments Payroll.