Realities of public accounts bemuse new members

| 20/09/2013

(CNS): The newly elected back-bench members of government serving on the Public Accounts Committee got to grips with the reality of what the auditor general described as the “abysmal state” of some government accounts during the first open hearing of the committee Thursday. Chair Roy McTaggart, along with members Winston Connolly and Joey Hew, all new politicians, were clearly bemused by how it was that year after year government entities were submitting sub-standard accounts to the auditor general and yet there had been no consequences or sanctions of any kind.

“How have people been allowed to submit poor accounts year after year?” asked Winston Connolly, the newly elected George Town C4C member, now sitting on the government benches. “Why is there nothing in the system to correct poor behaviour and, well, incompetence? Who is it in government that makes these decisions?”

Despite the fact that most statutory authorities and government companies (SAGCs) have caught up in terms of submitting something to the Office of the Auditor General by the statutory deadline each year, PAC was informed that the quality is still a major problem. Auditor General Alastair Swarbrick and his team, who were sitting with the PAC, as is customary, indicated that for the core government ministries and portfolios, the situation was even worse.

Concentrating on the SAGCs, the members questioned the accountant general and her team as well as Swarbrick about the general state of affairs before beginning the second day of witnesses relating to the auditor’s recent report on the on-going problems with public authority accounts.

For several years most government entities failed to submit anything after Hurricane Ivan in September 2004 and following the introduction of the Public Management and Finance Law (PMFL), which requires that accounts meet international standards and appeared to be too taxing forthe government's bean counters. Some eight years later, the backlog has largely been addressed and most authorities are meeting the auditor general’s deadline. But the problem now is that many of the accounts submitted to the public audit office are of such poor quality that the team is struggling to audit them.

As a former auditor, a qualified financial lawyer and a successful businessman, McTaggart, Connolly and Hew struggled to understand how it had happened, and despite the well-publicised details in the press over the last five years about the problems, they did not seem to realise the magnitude of the problem until Thursday.

PAC members pressed the audit team and Accountant General Debra Welcome, whose office’s main function is to consolidate government’s accounts into an annual entire public sector financial report, but has not been able to produce one for almost a decade. She said that chief officers are responsible for their departments.

Despite the massive focus on the issue and the money spent on external help and experts, the problem with quality continues.

Swarbrick said that while the deputy governor, in partnership with the financial secretary, had done much to drive government entities towards submitting their accounts on time, what they submit still falls far short in too many cases of the expected standard. He pointed out that it was critical for government to take responsibility for producing reliable and transparent accounts, not just for his office but so it knows what is being spent by whom and why, as it is public money.

“Government needs to reassure itself the information it submits is good and not wait for us to say it is or isn’t. It needs to be able to rely on this information,” Swarbrick said.
The new PAC members failed to understand how government was not able to catch and prevent the submission of substandard information.

The auditor general said that when he produces his report later this year on what was submitted for the year end 2012/13, there would be more details release, but he flagged the fact that there were still challenges among SAGCs and core government still had a long way to go.

“The issue of leadership is still fundamental to this,” Swarbrick said. Acknowledging the work of the deputy governor, he said in his opinion there was still a role for someone to have clear and direct responsibility for the quality, accuracy, timeliness and transparency of government’s accounts.

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  1. Anonymous says:

    Normal approaches don't work in such a small country as Cayman Islands. People here related to each other and no matter how bad things are, they will cover each other' backs.   Someonehave to find a solution that will work. 

  2. Anonymous says:

    It is NOT incompetence. There is no way even the UDP is that incompetent. It is a deliberate sustained effort to hide where the money is going. If the people knew the true level of waste and misappropriation that has been going on within government for decades there would be a riot.

    • Anonymous says:

       Riot? Not in Cayman.  Everyone is scared sh…s here and can express their opinions only being Anonymous

  3. Security - Stability - Prosperity says:

    People are driven by incentives. Those Ministries and SAGC's which deliver poor quality accounts should get automatic budget cuts for the following fiscal year. Either they show the public funds have been used efficiently and effectively, or if not, they do not need as much money as they used to have. No cuts in headcount, no restructuring, just a simple new rule. Would work wonders!

  4. Pissed Off says:

    George McCarthy orchestrated this horrific debacle in the Public Accounts System in the Cayman Islands.

    How has he been rewarded? Who's in charge of CIMA? Correct. George McCarthy. 

    Want to know how this has happened? Guess not….back to sleep everyone.

  5. Anonymously says:

    Fire them all and replace them with expats then we will get the reports the next day I hope. The same should be true for politicians too.

  6. Anonymously says:

    Good luck guys just parroting what every other member of PAC has been saying for at least 8 to 10 years.  Goog luck and good speed now let us see how a CPA, Attorney and Businessman handle it, no more timeouts we need action.  Heads must roll, it stinks to high heavens and we must put a stop to it NOW!

  7. Anonymous says:

    This is very simple….go back to centralized Gov't!!!!   Look at the time frame of when the problem started, not to mention the additional cost of all those financial controllers and hr managers. Further, it's obvious, they are not doing their jobs.

  8. The lone haranguer rides again! says:

    Bemused bewildered betwiched.

     

    • Anonymous says:

      This is a direct result of the decentralization of the Finance and HR operations of government. Ask ourselves if this issue existed prior to 2007 when the law was enacted? Each chief officer controls his or her accountants. What is consolidated at the end of the day is the garbage produced by each ministry and portfolio accountants. The accountant general has no authority and no control over these officers. These accountants need to be placed directly under the ministry of finance for reporting purposes. Finally, the law needs to be repealed.

      • Anonymous says:

        Total bull 3:16. No one knew what the money was spent on in 'the good old days", just that it was spent and not spent illegally. Didn't matter an eff whether Government got anything out of it, just so we could show it was spent!

        • Anonymous says:

          You must be on drugs or you need your head examined to make such a statement. In the former  days government knew how every dollar was spent. The new system breathes corruptions because payments have very little details not to mention the budget document. I know what i am saying.

  9. Anonymous says:

    This is precisely what happens when you hire a "suitable Caymanian" instead of the right person for the job. The difference is, if CIG was a business in the private sector, they would be out of business, but government can continue to lose money indefidently without consequence. 

    On an island filled with accountants and financial advisors, CIG cannot find a handful of hard working, competent Caymanians to fill these accounting positions? It just goes to show how uncompetitive Caymanians are and how these people cannot survive in the private sector. What an embarrassment. 

    • Anonymous says:

      You should ask how many of them are Caymanians versus how many are expats before you start running your mouth?

    • Anonymous says:

      Caymanians are not uncompetitive.If Caymanians were more cooperative with each other, the country would be better off. It is just that the Government is probably only hring those who are friends of people who have connections in the Civil Service and not based on the competence of the individual. Hiring an expat is not always a solution as can be seen by the amount of expatriates who have been in courts recently for fraud. Cayman's business sector is far more competitive than a  similar sized city in either England or Canada or even USA. Which city in Canada or England wuth sixty thousand people will one find three locally owned first class supermarkets as well as several locally owned first class hardware/home center stores

      • Anonymous says:

        Probably the one that gets hundreds of thousands of tourists every year and a massive roll over of expatriat workers so thousands of town locals can sit on thier ass and take handouts from millions of dollars of overinflated fees of everything and who also just happens to be a tax haven

    • Anonymous says:

      Except that the majority of thema re not "suitable Caymanians" they are expats…Checks the fact before yyou start running down my people and my country..People like you we don't need or want here..

  10. Anonymous says:

    Where are the santions????  This is clearly unlawful!!  How can we ever have a disciplined Civil Service when individuals are allowed to break the law without any fear of being sanctioned???

  11. Anonymous says:

    There already are people responsible…. The Accountant General has a boss… And well her boss also has a boss… Maybe we should start there. XXX

    With all due respect to Ms. Welcome, because I know she works very hard and does the best she can given the circumstances… It is not good enough to say that the ministries are responsible and so… Wah? Why does that matter? Well yes of course the Chief Officers are responsible… Thus the title Chief. But don't the Chiefs have a boss? Don't they have to follow the laws? I don't get it! 

    GOOD GOD… HOW WILL WE EVER GET ANYWHERE LIKE THIS???

    • Anonymous says:

      You don't get it. The accountants in the various ministries ignores the FS and makes it clear that he is not their boss. They take instructions from their chief officers ONLY. No one else.

      • Anonymous says:

        Well then Franz or the Ministers needs to do something!

        We did not elect those dang Chief Officers…. how comethey are running the country???

        • Anonymous says:

          Excellent question my friend. The politicians should be the policy makers. Chief Officers job is implementation. The Chief Officers with the DG decided on the subjects for the ministries and this government swallowed most of the garbage. It wouldn't work for me. I would tell them who is in charge.

  12. Hear no evil.. see no evil says:

    The reason I believe not one of these obviously incompetent individuals has been let go is that doing so would reflect badly on whomever their bosswas or is.  In the first place for hiring them and, secondly, for supposedly overseeing them. So on and so forth .. all the way up the CIG food chain. Unlike the private sector, they get away with this for the simple reason government does not have to turn a profit in anything it does, And further.. can run enormous deficits indefinitely by simply passing them on to the next administration.Therefore,  NOONE in government is responsible for ANYTHING .. EVER.  It is the best job in the world!

  13. Knot S Smart says:

    Our tourism advertising theme sould be 'Come to the Disney World ofthe Caribbean – our accounting is done by Mickey Mouse'…

  14. Anonymous says:

     

     

    Winston you are not protecting Caymanians like you said you would! Enjoy it for four years as Elio did.

    • Anonymous says:

      A Caymanian was heard saying, 'This must be the fault of the expats, you know, those low paid foreigners who can't get work at Dolphin Cove'.

      Not this time bobo, this is one of your own making and typical of the incompetence that strides across Caymanian politics and business. When will you learn that you need the best people for the job, not the best worst Caymanian.

      Now thanks to self serving Ezzard many of the brightest and best are looking to share their skills and experience with a country that isn't looking backwards all the time. 

      • Anonymous says:

        Great work Ezzard. Keep them going and I trust that they never return.

         

      • Anonymous says:

        "many of the brightest and best are looking to share their skills and experience with a country that isn't looking backwards all the time" Give me a break! No one gets up in the morning and move to another country "to show the locals of that country how to better do anything" People are self serving and they look out for themselves! Anyone who come to Cayman or any other place that offers a better standard of living does so to improve their own lives. So please don't try and sell that fertilizer on this site.

    • Anonymous9 says:

      Hahahaha There's 26 people (thumbs down) so far, as of this writing, that 'don't get it'.

      LOL

       

  15. Weapons Grade Bollocks says:

    Let's not be hasty lads. It's only been ten years. The PFML will surely come good if only we give them a little more time.

    And Cayman Airways will finally make a profit.

    And pigs will fly.

     

  16. Anonymous says:

    Hear hear.  The problem is obvious.  Government looks for the best qualified Caymanian for the job instead of the person they need.  The pool of Caymanian accountants is tiny, therefore they end up with people in their 20's earning well into six figures as "CFO".  They then refuse to discipline them or hire them because they are Caymanian.  After all they fact they can't do the job isn't their fault.  The government hired them knowing full well they were under-qualified.  

    Being a qualified accountant is not enough to be CFO of anything.  It is only the first rung of the ladder.  That's why CFO's in the private sector are in their 40's.  You need years of experience at all levels of the chain as well as in management to be able to run an entire accounting function effectively.

    The structure of government is also a major issue.  It's far from clear that these people are directly under Ken Jefferson's authority.  They are employees of the departments and Ministries, not the Financial Secretary's office.  This is one of many examples of disconnection between responsibility and control.  Ministers are in the exact same position asthey cannot sack or even discipline people they know to be incompetent.  Only the CO can do that and normally only after consulting POCS and the DG.

    The answer is to align responsibility and control.  The government needs to fix its management and accountability structure or nothing will change.  Then they need to start holding people accountable even if it means making people redundant.

    • Anonymous says:

      Actually, for a point of clarity, there is a CFO who is Caymanian and in her 30's that have always gotten in her financials on time. Now, I am sure the AG's office can confirm this. So before we go spewing that you should be a certain age, lets not paint all of those that are there with the same brush. This particular CFO does her job and does it very well.

      • Anonymous says:

        Did you even read the article?  It said even the ones that were submitted were of such poor quality they could not be audited.  Getting accounts in on time is one thing, getting them correct is another.  

        Is it possible that someone in their 20s or 30s could be an effective CFO, yes.  That doesn't make it the right decision to hire them when you could get someone with 20 years experience for  the same salary.

        • Anonymous says:

          But 21:26, they would have to be expats to be any use and we don't do that in Cayman. We hire Caymanians whether they are useless or not.

    • Anonymous says:

      You got it all right. The FS has no authority. All accountants must report to him if this stupid law is to ever work for us, which I don't think it ever will.

    • Anonymous says:

      If you understood the structure of Government properly you would see that there is nothing wrong with what you call "its management and accountability structure", 12:16. It is simply that no one implements the management tools that are there and, most obviously, no one is ever held accountable. How could you fire a bunch of Caymanians, especially the senior ones? How would that play out in the country? And who would you replace them with? You can give a plumber the  set of tools that are available, but unless he is prepared to actually go to work and DO something with them, it is all meaningless….and the water, just like the public's money continues to leak away.

      • Anonymous says:

        6:53's post nails the whole problem down but nothing will ever change.

  17. Anonymous says:

    another glorious day for the cig civil service……..

    read the miller shaw report!

  18. Anonymous says:

    I used to work for a boss whose favorite saying was "Where chaos exist, opportunity abounds".  This chaos that is perpetrate by these SAGCs are NOT by accident.  I think they are by design.

  19. Anonymous says:

    Chill, sugah bun soon come.

  20. Anonymous says:

    Just read again the last paragraph:

    “The issue of leadership is still fundamental to this,” Swarbrick said….  there was still a role for someone to have clear and direct responsibility for the quality, accuracy, timeliness and transparency of government’s accounts.

    Now to the Government website:

    "he has overall responsibility for all aspects of the government’s regulatory, fiscal and budget management operations."

    "Departments: Finance Administration, General Registry, Internal Audit, Treasury"

    This is what you can find for Kenneth Jefferson, there is no new role for someone to have clear and direct responsibility, it is HIS!

    So, WHEN IS THIS GUY GOING TO BE FIRED?!?!?

    And Winston, like you a lot, I think you are a breath of fresh air, but can you seriously be asking those questions when the above is found in less than 10 seconds. Please, either you or Roy or someone call it as it is, the incompetence is clear.

    • Bean Counter says:

      An urgent value for money review for POCS and the Ministry of Finance, BMU all staff and officials should be undertaken if Governor Kilpatrick and DG Manderson are serious about savings in CIG.

      None of the personnel would be retained in the private sector past the probationary period. Sweep them all out and start over with better value for money hirings who understand they can be fired for failing to perform year after year.

      • Anonymous says:

        The first sentence of your last paragraph is over the top and unfair, Bean Counter, though it certainly applies to some key senior posts in particular. But Government just cannot learn. They have hired someone recently for one of the departments you mention who left Government years ago, to the relief of all, and went into the private sector where three firms saw fit to fire her. Madness. But she is a Caymanian.

      • Anonymous says:

        Stick to counting beans, you clearly have no idea how Government works, the Public Accounts Committee is critcizing the reporting of activities (i.e. annual accounts) and you are blaming the department that prepares the budget. Sounds like someone has an axe to grind, did you get a nasty budget cut this year by chance?

    • Anonymous says:

      At least it has now been called what it is, that is often the first step to doing something to correct it.

    • Anonymous says:

      I hear you, but the website you've quoted doesn't say "responsibility for the production of accounts."  Let alone, timely and accurate accounts.

      That's where the problem is: no one is clearly responsible for this.  Maybe they can just add it to his job decription (or to the Accountant General's)?  Until someone can be held accountable they will all pass the blame elsewhere.

    • Anonymous says:

      You ediot. You are missing the point big time even after reading it. While the law holds the FS responsible the staff that is required to do the work does not report to him. The chief officers will be quick to tell him that. The FS is a highly intelligent individual. Trust me on that. The problem is that he has no HR control over the staff.