Archive for April 22nd, 2010
CFOs not helping
(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.
UK’s Chagos study manipulated, consultant claims
(Times Online): A supposedly independent study on the feasibility of letting the exiled Chagos islanders go back to their homes was manipulated to reflect the British Government’s opposition to their return, a Times investigation has revealed. The 2002 feasibility study lies at the centre of the Government’s case to the European Court of Human Rights on the islanders’ right to return to the archipelago four decades after they were deported from Diego Garcia to make way for an American military base. In its submission to the court the Government contended that the study, “which was prepared and adopted by all the independent experts involved, clearly indicated that resettlement is not feasible”.
However, one of those independent experts, Stephen Akester, said his conclusions that the islands could be resettled were erased from the study amid political pressure.
UK support cops arrive
(CNS): Updated – The promised contingent of supporting police offices from the UK has finally arrived in the Cayman Islands. Fourteen serving UK cops arrived on Wednesday 21 April to support the RCIPS in the investigation of major crime. The team consists of senior investigating officers, investigators and specialist interviewers. According to the BBC, the group consists of four officers from West Midlands Police, three from Warwickshire, three from West Mercia and four from Staffordshire. The team will work alongside the local police in a combined effortto reduce incidents of violent crime as well as investigating current crimes and some unsolved offences, continuing the efforts to bring the offenders and perpetrators of violence to justice.
Keith Bristow, head of crime business at the UK Association of Chief Police Officers is quoted by the BBC as saying, "This is an excellent opportunity for the four West Midlands regional police forces to unite and provide support to the Cayman Islands during a challenging time.
"All of our officers and staff are dedicated to protecting people from harm and this is a really positive opportunity to share resources and provide some excellent development opportunities for our officers. "