AG calls for finance boss

| 16/12/2010

(CNS): The failure of government entities to complete their accounts in accordance with the law is down to a lack of leadership the Auditor General has said. Unveiling the report based on the audit work his office has done on government accounts up to the year 09/10, Alistair Swarbrick said the Ministry of Finance needs to appoint a director of finance or someone to take overall responsibility for government’s accounts. The continued lack of leadership, he said, means no one is accepting responsibility for directing or orchestrating how the various government ministries and public authorities are ever going to address the myriad problems related to the state of public accounting.

Although Swarbrick said some statutory authorities and government companies (SAGCs) had made progress on addressing the backlog and, more importantly, improving the quality of the accounts, there were still ongoing problems with many of the 25 SAGCs. When it came to the ministries and portfolios, he said they were facing serious problems and the report gave a poor assessment of their efforts to restore financial accountability.

Some $2million of public money was spent on an accounting task force to address the problem but, Swarbrick pointed out to the media, the people of the Cayman Islands still had no idea how government money was being spent. In his first report the new auditor general said the money should have been used to focus on the more recent accounts, which would have relevance and meaning to the people.

He also said there was still a significant number of missing SAGCs reports which have been finished but were sitting in ministries. In its last report on the state of the accounts in April of this year the audit office had revealed that 73 reports had not been tabled in the Legislative Assembly (making them public documents) and that figure has now increased to 94.

“By not tabling the reports in the Legislative Assembly, the information about the financial performance of these organizations remains unavailable for public scrutiny,” the AG stated, adding that it essentially undermines the goal of accountability and the whole point of doing the accounts.

Given the amount of disclaimers, qualified and adverse opinions  the office had to give to government accounts, he said it was very difficult for the man in the street to differentiate what was an inability to present financial statements and what was either poor spending decisions by government or even dishonesty.

Without supporting information and documentation there was no way to verify why, or even if, public money had been spent as claimed by the public sector entities, the AG added.

Swarbrick questioned the value of his office spending time and money auditing the entire public sector’s financial statements for past years as these were of such little value given how late and how many disclaimers there were. Government has only got as far as the financial year 04/05 in compiling its overall statements. The entire financial statements for that year were delivered to the audit office in October but were of little if any use to “man nor beast”, the AG said.

Criticising the government’s output statements, which he said were essentially meaningless, Swarbrick said the man in the street does not need to know how many briefing papers were presented to Cabinet in the Education Ministry; they want to know how the students did in school.

The continuing failure, not just in terms of the time line by government entities but the poor quality of information and presentation of their financial statements, is down to problems with skill levels, the government auditor believes. He pointed out that where people with the correct skill sets had now been put in place, they still faced serious challenges because of the legacy left to them.

Although he acknowledged some improvement with SAGCs on the quality of their accounts in general, the accounts coming from ministries and portfolios were still of poor quality with chunks of information and in some cases figures missing from the statements.

“The government needs to develop a plan for how they will bring financial accountability reports up to date and improve their quality,” Swarbrick said, adding that he was very concerned that government was well aware of the problem but has simply not done what it needs to do to tackle the issue.

“The government has been informed about the seriousness of this issue since 2008; yet has chosen not to put in place the kind of leadership necessary to address the underlying problems contributing to the lack of financial accountability,” Swarbrick observed. “I was also surprised to find that the government has not developed a plan for how it will catch up with its consolidated accounts, even though there is a critical need for this information to effectively manage the government finances.”

In short, Swarbrick recommended that government stop trying to find the information on past years and focus on the most recent year, which could still have some value for public accountability. “The simple solution to this is to concentrate on the current accounts and move forward,” he said.

Confirming that many government entities had contravened the Public Management and Finance Law, he said his office was not able to take any legal action against the people concerned. He said that the failure on the part ofthose obligated to meet the requirements under the law had to be dealt with under the Public Management and Service Law. He believed, however, that there had to be some consequences for the continued contravention of the law.

In its response to the AG’s report, the Ministry of Finance denied responsibility and said that chief officers do not report to the ministry but to the deputy governor.

“Despite the numerous leadership initiatives that the Ministry of Finance has taken over the years, chief officers have remained largely unresponsive, resulting in a general non-compliance with their statutory financial reporting responsibilities,” the ministrysaid.

Spending the $2million on creating statements for the outstanding years was part of a desire to comply with the law, the ministry claimed, rejecting Swarbrick’s comments that it was a waste of time as the statements had some public value. The ministry said the task force was worthwhile as it had identified system deficiencies and hindrances as it worked through the backlog, giving government the opportunity to reassess those systems and move towards restructuring the entire government wide accounting function.

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  1. Anonymous says:

    He’ll probably not have his contract renewed either

  2. Anonymous says:

    Bring back Dan Duguay.

    He and the new AG would make a great team!

  3. Anonymous says:

    We have the person and position that the new Auditor General refers to.

    It is the Financial Secretary, Kenneth Jefferson.

    The same FS who signs off on all the government budgets, then has to explain why we didn’t hit them.

    Accountability in the senior ranks of the civil service, anybody ?

  4. Anonymous says:

    Hey, it’s not just Finance, all the Ministries and Authorities are independent and compete for their own advantage – no one prioritises the services of Government, they’re all autocratic empires (suffering politics within politics).

    A strong CEO needs to knock all heads together weekly, but then politics play their role so things will just stay the same….

    Beware Mr AG!

  5. Anonymous says:

    Nothing more than more pure nonsense.

    Passing the buck, creating needless delays, hiring more bureaucrats, and accomplishing nothing except higher cost of government.

    If employees do not accomplish what you pay them for, you do not sue them, or hire another super employee to boss them around.

    What you do is fire them. Pure and simple.

    All you have to do is terminate one of them, and the others will all fall into place like magic.

    Believe it or not, self interest really does work.

  6. Anonymous says:

    Appointing a Director of Finance will not solve anything…Each Ministry / Portfolio has a CFO and in some cases 2 DCFOs with a bunch of Financial Administrators and Finance Managers…Bascially this whole accrual accounting thing was poorly implemented, in addition every one feels they know more accounts than the next person and they don’t listen to anyone…What is more ironic is that the Ministry of Finance has not submitted its accounts for 09/10 as yet which was due end of August 2010.

    Wake up and bring out the pink slips for all these poor performing CFOs / DCFOs.


  7. Disgusted says:

    It seems there is no real accountability when it comes to these Government entities! I’m sorry where else in the world can a Ministry or Gov entity get away with not reporting financial results for almost 5 years, and they have credit facilities or loans with a commercial bank??!!! That is ridiculous! You have people working in high paying jobs as Financial Controllers/ VP’s of Finance taking home anywhere from CI8-12,000 per month and for what obviously nothing, since there are no financials or unreliable ones provided.

    I have worked at a government funded entity here in Cayman and I actually heard one of the higher executives say, ‘if we don’t make  the deadline, or the auditors walked off the job, what’s the worse that can happen, nothing because the government will never shut us down!!! This from a Caymanian is a high position!!! What does this say!

    • Anonymous says:

      I pray that it is not left up to the UDP government to pick a "finance boss" because no doubt they will appoint Mckeeva Bush as the new finance boss & that will defeat the purpose & make things worse, if that is possible.

  8. Sachamo says:

    This is a system problem people not a political problem; the current system is just not working and needs to be changed immediately. The Governor needs to step in, bring help from UK to get this sorted out and set-up a workable platform. The sad fact is we cannot fix this problem ourselves it has grown too big and too complex….

  9. Tim Ridley says:

    There are some real issues with the PMF Law and serious questions whether it is appropriate for the Cayman Islands. It was introduced with the best intentions to improve budgeting, financial reporting, responsibility and accountabilty. But in practice it is an unwieldy and unhelpful monster that produces huge amounts of nonsensical tooing and froing at every turn from initial budgeting through output and purchase agreements to preparation of financials. And actually increases opacity and lack of accountability, resulting in no timely and commonsense financial statements that anyone can understand or find helpful.

    Nevertheless, none of the above is any excuse or justification for non compliance with the Law. Neither public handringing nor silence is acceptable.When I was on the Board of the Monetary Authority, we insisted that, not only must there be full compliance with the PMF Law, but also that we as the Board must receive financial statements of the sort that any private company would prepare!So it is not impossible to cover all the bases; but it does require strong and constant leadership.



    • Anonymous says:

      Mr Ridley’s comments are always worth reading. Let us for the sake of argument agree with his first paragraph about the PMFL. I can imagine a whole bunch of lazy, overpaid incompetents salivating over his words.

      But then look at his final paragraph…………particularly the final sentence." But it does require strong and constant leadership".  That’s the problem, not the PMFL.

  10. Anonymous says:

     You go Mr. New AG. Love the guy so far. Will wait for a little longer to see what he is really made of. Hope he does not become too cocky like his predecessor and feel it necessary to go running to the media with everything, in most cases prematurely. 

    The public deserves to know how Government is spending our money but running to the media every minute with half information did not help the situation. 

    • Pending says:

      Running to the media was probably his last option, as he had been running to Government prior to that and getting no where.

      The new AG better tread lightly as Mac will get rid ofhim if he oversteps the mark that Mac imposed.

      • Yuh know! says:

        I agree.  But its sad it has to be like this.  Al ‘Da Man’ should not be restricted or hindered in his public duties, particularly by the Premier and/or Govt.  

        He and Bush have one obligation in common.  Only so far, Al is the only one to honour it – his duty and accountability to the public purse and ultimately, the public.  Bush seemingly has no conception at all of his duties in this regard.  

        What a sad, sad, state of affairs.

  11. Real World says:

    This country will not change until the Bush/Tibbetts era of Punch and Judy, knock-about politics is brought to and end. To herald in a newera of politics in Cayman requires a new generation of well-educated, experienced, socially-responsible, non-self-serving politicians. A pipe dream?

  12. Anonymous says:

    I think I like this guy!

  13. Pit Bull says:

    This should be a UK appointment to protect the broader interests of the nation.

    • Anonymous says:

      "Leaders" who think money is created from thin air and can’t control their spending. "Accountants" who cant produce accounts. Immigration Boards with backlogs years long, not to mention rampant chornisim. You may have a point here. However, it seems too good to be true.

  14. Anonymous says:

    “In its response to the AG’s report, the Ministry of Finance denied responsibility”

    Now there is a surprise – McKeeva’s ministry denying responsibility.

    The sad reality is that we have gone from a situation where one professionally qualified and non-political person was responsible for maintaining a balanced budget, to a situation in which unqualified politicians appoint multiple “chiefs”, “strategists” and private sector “consultants” and “advisors” that they “can work with”, all of whom are exceptionally well paid but none of whom seem to be accountable for anything of substance. That is no way to run a country.

  15. Anonymous says:

    it’s just a big rats nest of incompetence from top to bottom…….

    cayman needs direct rule for at least 2 years……

    the politicians and civil servants have proven their incomptence once too often…….

  16. Anonymous fisher man says:

    why do we need somebody else to see that this is done. we now have a minister of finance, who is a CPA and he also has a masters degree in finance, on top of that he has three chief officers in his ministry ,and the financial secretary inthere so tell me why this ministry cannot see trhat this is done.    if they cannot get this done MR AG i beg you to support EZZARD MILLER to deal with them or have of them fired.

    • Deadright says:

      Have I missed something is that what Dan the previous audit man told us years ago?

      What is new here?

      By the way I had no idea that mac  had a CPA qualification? Certainly there is no record in the CPA members list.

    • Anonymous says:

      Not sure where you get your info from, but the Minister of Finance (McKeeva Bush) is not a CPA nor does he hold a Masters in Finance.

  17. O'Really says:

     …"Alistair Swarbrick said the ministry of finance needs to appoint a director of finance or someone to take overall responsibility for government’s accounts. The continued lack of leadership he said means no one is accepting responsibility…."


    "In its response to the AG’s report the ministry of finance denied responsibility and said that chief officers do not report to the ministry of finance but to the deputy governor."

    Maybe he has a point!



    • Anonymous says:

      Chief Officers do not report to the Ministry of Finance but to the Deputy Governor.

      Lame excuse. When do they find time to report to the Deputy Governor if they spend all their time galavanting around the world with the Premier?

      After FOI requests revealed the evidence of Christmas lights, security, water, electricity, and only God knows what else paid for from the public purse, the last thing the Premier wants is Chief Officers tallying up and reporting his overseas expenses to the AG.

  18. Anonymous says:

    The fundamental problem is that Gov’t Dept heads believe it is someone else’s problem to keep track of their carefree spending. In reality it is their responsibility to take ownership of their own procedures and controls and ultimately their dept’s accounts.

  19. Anonymous says:

    Isn’t that what Kenneth Jefferson was supposed to be doing?

    • Anonymous says:

      Agree, it would seem that the Financial Secretary should be the leader the Auditor General thinks Govt. should have. NOT another person.

      • anonymous says:

        The Financial Secretary is and should be in charge of those ministries who refuse to do their jobs, He knows who THEY are and was there in the previous administration and still did nothing about it, Another one who thinks he is above the law, sits on the fence and plays dum de dum with every Govt, in power, Do your JOB Mr. FS or give the job to someone who will do it right; Don’t wait for the UK to come and take over our books. And you in the ministries that can’t produce a financial statement year after year I say SHAME on you and you should pay for your INCOMPETENCE. Time to make YOU accountable. Some of you think you have a life time job. Try it in the private sector, and let the ones who Want to work take over.Mr. FS no watch for you this year. you don’t deserve it. CAL get your ship in order too, many of us are ready to work, I mean REALLY work. Don’t give me the crap of new people every 4 years, typical old Caymanian saying: not my fault.Mr. Governor will you do your JOB and take care of your civil service and don’t pnvite the incompetents to your coctail Chrismas party. Give the money to the poor and hungry instead.

    • Anonymous says:

      Kenneth Jefferson is kept as a constant reminder to McKeeva that an education is not all that it is cracked up to be.