Port audit stirs up denials

| 08/08/2010

Cayman Islands News, Grand Cayman Island headline news(CNS): Updated –  A government ministry has denied accusations made by the Internal Audit Unit in a report it conducted around ten months ago about shop leases at the government owned Royal Watler cruise terminal. The report suggested that 13 out of 14 tenants were operating without leases and that over $200,000 was owed to government in outstanding rent. The audit unit said that Lands & Survey needed to issue the missing lease agreements and the Port needed to chase the money. The ministry in question claims, however, that the audit “contains some serious inaccuracies” and leases had been issued by Lands & Survey. James Parsons, the financial director of the Port Authority, told CNS Monday morning that all outstanding rents have now been collected.

The Internal Audit report on the Royal Watler leases was published in October 2009 but, as is the case with most of the unit’s reports, it was not circulated for public consumption. However, following an FOI request by a journalist on The Caymanian Compass the report was released into the public domain. It states that most of the tenants in the cruise terminal in downtown George Town were operating without a lease during 2008-2009 and as a result had paid no rent for their prime spots catering to the lucrative cruise market.
The chief officer in the Ministry for District Administration and Works, which has responsibility for Lands & Survey, issued a release on Friday saying it was not true that tenants did not have leases.
Kearney Gomez said all but one of the rental agreements “were duly executed” for the 14 units between December 2006 and January 2008 and no one was allowed into their shop without paying their first month’s rent. “The final unitremained unoccupied due to planning issues until October 2009. Contrary to statements contained in the report, no tenant was permitted into occupation prior to signing a lease and paying a first rent cheque,” Gomez stated.
He said, however, that the signed leases were not registered for almost three years as that could not happen until ownership of the parcel was vested to the Port Authority, and the fact that it took that long was largely outside the control of the department.
“Most importantly, this had no effect on day to day management of the tenants nor did it in any way affect the legality and contractual nature of the lease agreements which had been signed,” Gomez said in the statement. “Once tenants had been signed up for each unit, the role of the Lands & Survey Department was complete. Thereafter, the Port Authority undertook to directly manage all Royal Watler units itself, taking full responsibility for all rent collection, rent delinquency, and its own decision to award rent reductions across the board.”
According to the internal audit, five of the tenants at the terminal owed rent amounting to $210,364.76, which ranged from 4 to 15 months of rent arrears. “One of these tenants has not paid rent from the rent commencement date of their signed lease. To date no specific allowance for bad debts has been established against these outstanding rents,” the government auditors stated. “Furthermore, interest on the arrears was not being accrued by the Authority in accordance with the lease agreement.”
In the report the Lands & Survey department did not offer any management response since it was not given the opportunity to do so by the Audit Unit, but the Port Authority,which now has control of the leases and responsibility for collecting the rent for the public purse, said the it was  working closely with Lands and Survey and its attorneys to collect any and all outstanding lease payments.
“Although this process could take some time since lawyers are involved, the Port has embarked on actions to collect outstanding lease payments … the Board is of the opinion that a resolution to all the Royal Watler Cruise Terminal leases should be forthcoming by November 30, 2009.”
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  1. Anonymous says:

    Wow! James Parsons must be a real whiz kid!. Transfer him to the hospital!

  2. Anonymous says:

    Why did the previous board or government not clean up this mess when it happened on their watch? This is the problem with gov and boards they don’t care what mess they leave behind when their term is over.

  3. Anonymous says:

    Weird. So the Port Authority didn’t have the leases from Lands& Survey yet because they hadn’t been filed yet or what? And Lands & Survey didn’t register them because it was not clear that the government had title??  How can that be???  and private counsel was consulted to figure out the title issue for a year or so???? Isn’t that the AG’s job (the Attorney General I mean…everwhere else on earth AG means Attorney General but apparently that job has no function on Cayman so the auditor gets to be called the AG)????? And nobody is denying that none of the rent was collected until after this audit was done?????? So why is Lands& Surveying acting like they handled this so perfectly??????? And apparently some of the non-paying tenants are now out of business???????? AGGGGGGGGH!!!!!!!!!

  4. Joe Bananas says:

    What is really expected from a Banana Republic run Government?  Friends and relatives put in charge of things they do not understand or have the training for.   How can ANYONE take responsibility for ANYTHING that gets screwed up on Cayman?  Let it be known already!  ANYTHING and EVERYTHING that is "controlled" by the Government in any way will have unqualified, untrained, and unmotivated personnel doing as little as possible to get the job done while spending as much as possible.  Leaders lead by example.  The Caymanian Government is in way over their collective heads as far as being able to get ANYTHING done right.  Especially when it comes to ANYTHING to do with money.  If the Cayman people want something done right it needs to get done by a private company that does not have ANYTHING to do with Government.  Nuff proof. Nuff wasted money they don’t have.  Nuff said!

    • Slowpoke says:

      Interesting comment, as it would have been a civil servant who conducted the audit and wrote the report for the AG.  

      So, was he/she "… unqualified, untrained, and unmotivated personnel doing as little as possible to get the job done while spending as much as possible", or is it simply "the others"?

      CNS note: Slowpoke, this was a report by the government’s Internal Audit Unit and had nothing to do with the Auditor General.

      • Anonymous says:

        CNS The common belief/knowledge is that the Government’s Internal Audit GRoup falls under the Auditor General . When did the change you allude to take place.

        CNS: This is not common knowledge, it is a common misconception. They are separate entities.

        The Internal Audit Unit falls under the Ministry of Finance and internally audits government agencies. It’s director is Deloris Gordon and it is located on the 2nd Floor, Pavillion Bldg, Cricket Square.

        Auditor General Alastair Swarbrick heads the AG’s Office, which is an independent entity that externally audits government agencies and makes its reports to the Legislative Assembly. It is located on the 3rd Floor, Anderson Square.


      • Slowpoke says:

        Thank you, I stand corrected.  

        The issue remains though, is this then just a simple CS (not even from an independent body) doing their job effectively and competently? 

        According to JB this is an impossibility. 

      • Joe Bananas says:

        You are of course right in trying to correct me as to there being some competent personal in the Government civil service. And it is just conjecture on my part to assume that they more than anyone else see what I have written about above every working day.  My point should have been that there are TOO MANY unqualified, untrained, and unmotivated personnel doing as little as possible to get the job done while spending as much as possible.  Having been in that situation myself I can do more than just imagine the frustration of being a qualified, well trained, and highly motivated worker who is not only surrounded by people who have no interest in getting the job done at all, degraded by those above me for pushing harder then they would, and most of all identified with all the incompetence that surrounds them.  My apologies to all the Government workers that are responsible for actually getting the work done.  YOU are appreciated.  Thank you slow poke for busting me and allowing me to stand corrected.

        • Slowpoke says:

          Thank you for your kind reply.  I am in no way suggesting that there are not incompetent, lazy,dishonest, etc. CS’s.  But, just like you said, there are also some who like their job, are friendly and efficient.

          I also think there is too much emphasis on individuals (based on personal experiences we have all had  when dealing with a CS), rather than tackling some of the underlying large organizational issues facing the CS. 

  5. Chris says:

    These audits confirm how unfair it is to cut civil servants salaries when there is so much money that is owed to government that is uncollected. 

    If the money owed to the port authority, health services authority and outsanding garbage fees were collected, we would be well on our way to balancing the budget without further taxation or any new revenue measures.

    • Anonymous says:

      WHAT!! you mean there are fees for garbage collection??! 

      • Anonymous says:

        You think that’s bad, I hear I am supposedto pay Trade and Business licensing fees and other fees for employing foreign workers. Yeah, like that’s going to happen! 

  6. Beachboi says:

    If the rent is not paid, change thelocks.  I bet that would do the trick!  That’s what would happen to me if I didn’t pay my rent!!!

  7. Anonymous says:

    One establishment,an ice  parlour has recently closed, who will be next? The rents charged are out of line with the market conditions.

    Good luckto the survivors

    • Anonymous says:

      Apparently,rents aren’t charged.  perhaps the business was out of line with market conditions.