$2million wasted, says auditor general
(CNS): The money spent on the accounting task force did not represent good value for money for the public purse, the auditor general has said. In his general report on government finances published last week, the country’s top auditor said that a lot of time and money was spent trying to complete the more outdated accounts rather than focusing on the more recent years, which would be more relevant and accountable to the legislative representatives and the people. Speaking about his findings, Alistair Swarbrick said government wasted the $2million on putting together a task force as he said the specially recruited accountants were ineffective and did not actually prepare any financial statements of worth.
He said some chief financial officers revealed when they spoke to the AG’s office that they did not know what work the task force did when working in their departments. “Even if the Task Force had prepared the financial statements we were eventually presented with in the past few months, those financial statements were for the most part unreliable,” he said. “The expenditure of almost $2 million … provided extremely poor value-for-money given the challenges facing the government’s accountants at this time.”
Swarbrick said he believed the money could have been spent on providing more accurate reporting of accounts for the more current financial statements and developing a plan for the future on how government could prepare consolidated financial statements. The AG said government was faced with a number of choices which would have used a lot less resources and been more accountable.
“Instead of preparing financial statement for every entity for every year, they could have prepared one set of statements for all the years (in the backlog) or put aside the requirement for preparing financial statements altogether and prepared condensed financial statements (less information).”
He explained that they could have chosen to just provide management accounts for audit that, he said, his office would have had to disclaim, which is what has happened for the most part with the old accounts in any event.
“The government had a number of choices at its disposal that would have used a lot less resources for the results it obtained,” he stated.
Despite claims by government officials in the Ministry of Finance that the $2million was well spent, the AG disagreed. He said government chose to address the backlog by preparing financial statements for every entity for every year when there were far more pragmatic solutions that would have produced the same results for less money.
Swarbrick explained that the information available for the old accounts was so poor it was essentially a waste of time to try and complete the accounts as they were of no use. He said government should have diverted the resources to the more recent accounts, which the members of the Legislative Assembly could then use to make better decisions about the effective use of public money.
The Ministry of Finance, which was responsible for the task force, said the decision to have it focus on the backlog was part of a “strong desire to comply with the intent of the law” and was not prepared to ignore the past financial statements. Ministry officials said that, although the accounts were late and wrong, they still had value.
“Despite the lack of timeliness and technical accuracy… these reports still have tremendous for value to the wider public as they provide a record of the government’s finances during this period. Without them there would be no record of the government’s financial performance during this significant period – a truly unacceptable position,” the ministry stated.
The government says that while the AG thinks the task force was not value for money, as a result of its work, government was able to submit backlog accounts from 2004/05 and identify the hindrances and deficiencies in the system.
Category: Politics
"Ministry officials said that, although the accounts were late and wrong, they still had value."
Let me read that again.
"Ministry officials said that, although the accounts were….. late……. and wrong ,…………. they still had value."
I get it! I’ll decipher it. It means
"A lie is as good as the truth if you can get someone to believe it."
Inaccurate unauditable accounts. The country has no accurate records of the millions expended that our elected members are supposed to be responsible for. The education system is failing our youth. The crime is unbelievable. it seems every time the Government frivolously sues anyone in the private sector they loose more tax dollars. The country has to bail out companies that fail that the CIG has a relationship with. People involved with Government get free gas, phones that are used for personal business, Government cars used for personal business, expense accountants that have no records, over seas phone calls for personal business on the Government tab. Members vote themselves salary increases and unbelievable pension benefits. Millions upon millions owed to the hospital and other agencies that cannot be collected. Blatant conflicts of interest. The Government has been chasing its tail for so long people are beginning to believe this is all normal. And to top it off the elected members get upset with the media and "da bloggers" saying we are messing the country up. We would all disappear if our country was being governed properly.
Let me quote the AG again for those of you who missed it!! "The specially recruited accountants were ineffective and did not actually prepare any financial statements of worth!!"
To all those who forever proclaim the superiority of the private sector and how privatising and outsourcing accounting services for Government is the panacea for all the reporting ills- HOW YOU LIKE DEM APPLES?
I think you’re missing the point. The point was not that the private accountants were no good, merely that the quality of the information they were being asked to work with was so poor that the work they were required to produce was of little value. Garbage in, garbage out, no matter the quality of the processing.
It’s no surprise that the Government decided to undertake what the AG says was the pointless exercise of trying to recreate prior years’ accounts from p…s poor records, rather than seeking to bring the accounts for the more recent period up to date (particularly as it would appear that the more recent accounting records are better). All this Government is interested in is scoring points over the PPM, and it has no desire or interest in securing financial transparency or accountability over the finances in its own term of office, no doubt because it is more than well aware what properly trained auditors might discover.
Let me get this straight. We had no audited accounts since 2005. This govt got in and hired independent private sector people from the big four firms to try help sort it out. The new auditor general now says there was no value for money in hiring the private sector auditors.
and mckeeva gets the blame for trying to get the audits sorted out going back to the PPM’s term. Can you imagine if he had started the audit with his term what the cry would have been?
Maybe the new auditor general can tell us what the opening balance would have been if there was no audited position for the previous years.
With all these financial experts in govt including the former auditor general and the private sector auditors hired why did they not say yo govt that they should start with the recent years first?
I am bemused by the erntire scenario. Does the Ministry not talk to the AG prior to the audit. Thus at the planning stage they can establish what he is looking for. Conversely why did the AG not organize a meeting prior to $2m being spent? Both are at fault. Can this be fixed before another $2m is spent giving us useless information? I wonder what Dan would make of all of this.
Chris, I think you will find the $2m was signed up for and spent in St Dan’s day. So the present A-G isn’t to blame. As for your other questions, I am always saddened when I read posts by people like you and Tim Ridley, hugely successful people used to dealing with highly qualified and high performing (or they are fired) professionals, wondering why this happens or this does not happen in the civil service. You don’t/can’t understand. In Government we take those who can’t make it in the private sector or -as is the case in Finance – we have to cope with people who joined the civil service right out of school. Neither the Chief Officer in the Ministry of Finance (well, there are three now, but the one who used to be Ken Jefferson’s deputy and who is still responsible for Government’s accounts with Ken) nor the Accountant General; are even CPAs. They are out of their depth. But this is a wider problem in the civil service as increasingly more sophisticated and demanding senior posts HAVE -repeat HAVE (or hell breaks out) – to be filled by born Caymanians to assuage "national" pride. It would be like staffing the American government machine with only people from Sarasota in Florida. Can’t be done of course, but we do it here. With the results we all live with.
Anon 18.57. A very disappointing response to my post and you did not answer the point. I am not commenting on the junior accountants, qualified or otherwise. Planning starts at the top between the AG and the Accountant General. Obviously this did not take place.One would have thought that the sub-contractors might also have been involved in this process. Do not be saddened about my lack of experience with the the civil service as I was involved in several subcontract audits for the AG’s department in the 80/90s. But ah I forgot we have better Governments in those days and I hasten to add some very good AGs.Thank you for bringing to our attention just how bad the accounting departments are; hence no name on your post.
Chris, You have provided a very good analysis (as always) Of course, I can’t comment on what has happened since I left the islands but I can assure you that I and my officials did have several discussions with officials from the Ministry of Finance. We suggested several alternatives and stated that we believed that it would not be possible to produce meaningful financial statements based on the information on file. However, that advice was not taken!! And of course, it was the Ministry of Finance who decided what to do with the accounting resources. The AG’s office could offer advice (as we did) but the final decision had to be with senior officials of the government!
So they went ahead with this exercise (which was supposed to cost $1 Million originally if I recall correctly) knowing fully well that the accounts would have to be either largely qualified or denied. Given that, I would have to agree with the present AG’s comment that the money did not provide value.
What is even scarier is the prospect that current accounts are still not being kept up to date. It seems that it may be a long time before the Islands have the government financial statements they deserve.
I wish the new AG well and hope that Cayman will be blessed with fair and accurate financial statements so that true accountabilty can be achieved.
As always, I hope God blesses the Cayman Islands and my wife and I wish all the good people of the Islands a Merry Christmas and a prosperous New Year
Dan Duguay
former Auditor General
I knew the 7% transfer tax I paid went to good use
Surprise, surprise!
Maybe it wasn’t Dan Duguay that needed his contract be "not renewed"?
What say you Mac?….Ezzard?….Mary?….Ju Ju?….Mark?….Roli?….any una poltishuns?
Cause we all know how una doh wah none de laws dem broke. Right?
This makes for nightmare reading with the added fear of direct taxation for more money to feed the insatiable appetite of the beast.
Be careful Mr. AG. You are now criticising matters for which the Premier as the Minister of Finance must now accept full responsibility. No more hiding behind the FS.
what a surprise advisory firms taking advantage of government zzzzzzzzzz
"Despite the lack of … technical accuracy…"
"Without them there would be no record of the government’s financial performance…"
I would argue that even WITH THEM there would be no record of the government’s financial performance.
What are these people smoking?
The Civil Service is a great vampire squid wrapped around the face of Cayman. Somewhat ironic in a land where the concept of private sector trade unions has always been taboo. It is time to slay the beast…..before it kills the rest of us.
Straight up my man.
… and identify the hindrances and deficiencies in the system.
CNS, please submit an FOI request that asks for the list of hindrances and deficiencies together with the plan to address them.
It would make for interesting reading.
With gov’t dept heads operating for decades without any controls, procedures, or tracking of their consumption, how can any external team divine what they consumed and when? The way government funds are deployed needs to be radically changed. Controls over the public purse must be maintained across departments, throughout regime change and personnel reshuffling. It would seem that many managers (and party leadership) continue with the attitude that "it’s not my job" to keep track of departmental expenditures. Nothing could be further from the truth, and heads need to roll!
It seems to me that the old research saying "garbage in – garbage out", may apply here.
If it was a case of GI GO ! why did these private sector accountants not recommend to halt the process and save Govt some money? Why draw it out to the bitter end ? to get paid ?
wow….. just…. wow……..
did anything ever come of the free gas at govt. fillstation, or are we all good with that now?
VERY good question! Were there any prosecutions? If not, why not?
Maybe we need to put Ezz on the case! The Mighty Ezz says that he is the kind of self-proclaimed super hero that we can count to prosecute wrong-doings! No?
Ok Compass, Ok CNS: it is time to get your investigative journalism magnifying glasses and trench coats out of mothballs and uncap this bucket of worms. The story is that a considerable amount of public money has been mishandled but as yet no one has been held accountable. What gives?
Inquiring minds want to know.
well said, there is literally hundreds of issues that never get followed up on?…wish we had better journalists here!
CNS Note: Here are two news story from CNS in which government officials revealed what they would be doing about Duguay’s discoveries ………nothing. It seemed that at the time Duguay was playing the roll of scapegoat….
http://centos6-httpd22-php56-mysql55.installer.magneticone.com/o_belozerov/31115drupal622/headline-news/2009/02/12/tab-says-fuel-issue-resolved
http://centos6-httpd22-php56-mysql55.installer.magneticone.com/o_belozerov/31115drupal622/headline-news/2010/05/07/baines-admits-cop-fuel-abuse