Archive for June, 2014

CIG runs up $8.6M travel bill

(CNS): Between 2009 and 2012 the UDP government ran up a bill of at least $8,576,554 on travel and hospitality expenses, a new report from the Auditor General has revealed, but because of poor record keeping the true figure is unknown and could have exceeded $10million. Alastair Swarbrick, said he couldn't be exact because of the very poor management as well as what appears to be a laissez faire attitude to the public purse when it came to travelling by both ministers and civil servants. Despite the constraints on government coffers at the time, Swarbrick and his team found travel expense increased during these three years by some 10% and well over half of the cash spent on travel was run-up by the Finance and Tourism ministry.

The report, which concentrated on core government, reveals it spent over $7 million on travel and a further $1.5 million on hospitality. The two ministries running up the biggest bills were the Ministry of Finance, Tourism and Development (MFTD), led at the time by former premier and current opposition leader, McKeeva Bush, and the Ministry of District Administration, Works, Land and Agriculture (DAWLA), which was led by Juliana O’Connor-Connolly, who is now speaker of the House. These two ministries represented 70% of all travel and hospitality expenditures incurred over the audit period.

Although government has now implemented a formal travel policy which addresses some of the incidents reported by Swarbrick, the government auditor said much more needs to be done as he found such serious shortcomings and problems implying abuse by both civil servants and politicians.

Individuals received expenses twice, per diem rates varied widely for the same trips, documentation for expenses was missing but requests were still paid, advances were never justified with receipts or any other evidence and written off, ministers were signing off on their own expenses and in many cases there was no formal justification for the trips made, the OAG found.

In the first three years of the United Democratic Party administration civil servants were extremely lax regarding travel expenses and the documentation to support these costs was completely lacking, the report reveals.

“I have concluded that official travel and hospitality expenditures were not managed effectively and efficiently, leading to the high likelihood that the Government mishandled significant amounts of public resources,” Swarbrick said.

Speaking at a press conference on Monday morning, the auditor general said that “no one was managing the shop” and raised his concerns that after four years the issues he raises keep being repeated and that nothing gets done.

“I found that there was an absence of well-defined policies and ineffective or absent procedures and controls. Any policies that were in place were inconsistent across government and officials were left with significant, if not complete, discretion with regards to how travel and hospitality expenditures were incurred. Monitoring and reporting of these transactions by management was virtually non-existent,” he added.

Swarbrick explained that the poor management of the records prevented his team from completing as thorough an audit as he planned, limiting its scope and preventing him from arriving at any exact figures. He said the lack of documentation to support expenses hindered the team’s ability to provide more or detailed information on how the expenses were managed or quantify or how much was mishandled or wasted.

Swarbrick listed a catalogue of shocking disregard to public money, from lavish Christmas parties and presents for people, buying booze for various hospitality events, including dinners, and social functions without any clear link made to business objectives and consideration given to value for money. Although personnel regulations in the public sector state that liquor cannot be reimbursed as travel-related expenses, in one example Swarbrick said the DAWLA spent $29,480 on three Christmas parties, which included a booze bill of $6,373, while at the MFTD, five entertainment events, including three Christmas parties, a special function, and a birthday party, also clocked up around $6,000 at the bar.

The government auditor also pointed to his concern that in some case ministers had approved their own travel claims for payment or did not provide support for their expenses but the chief financial officers paid the expense claims regardless. He said one ministry wrote off $167,000 for travel advances issued between 2003 and 2009 to a senior officials but he said there was little evidence of significant collection efforts being made.

During the three year period of the audit there were significant financial problems with government coffers and public debt Swarbrick noted. While government was trying to cut spending, including reducing the number of jobs and cutting salaries of public servants, travel costs were increasing.

“During the same period, we noted that travel and hospitality showed an upward trend of 10% over time,” he said as he raised concerns about the serious disregard for the use of public funds, adding that there was a high likelihood government mishandled significant amounts of public resources.

The auditor general noted that government has taken an important first step in acknowledging the serious shortcomings in the management of these expenditures by introducing a travel policy. But, he said, it still needs to develop the necessary practices and procedures to manage public funds and make sure they are not misused by public officials.

Swarbrick makes some eleven recommendations but many are similar to ones he has made in other reports over the last four years and by his predecessor for some ten years before that.

See the full report below and check back to CNS tomorrow for a more detailed look at some of the questionable issues surrounding the audit’s findings.

Continue Reading

Premier alleges abuse of office by former colleague

(CNS): Premier Alden McLaughlin took his former political party colleague Arden McLean to task last week as tensions between the two men continue to increase. Winding up the budget debate on Wednesday evening, McLaughlin accused McLean of abusing his position by using his contribution to the debate to angrily attacked government regarding his nephew, who had been refused a job with the RCIPS as a trainee helicopter pilot. McLaughlin said the independent member for East End had done the House a disservice when he had “chosen to air his family’s laundry” on the floor of the Legislative Assembly.

“I have never heard anyone use their position as an elected member of this House to seek to further a member of his own family. It is an abuse of office,” the premier said, adding that had the Standards in Public Life Bill been in effect, McLean would have fallen foul of that law.

During his contribution last week, McLean had become exceptionally emotional and angry when he related the story of his nephew, who had dreamed of becoming a helicopter pilot ever since he was a young boy, and having gone overseas to study and train, he had applied to the RCIPS to join the air support unit.

However, McLean said he was disregarded as he was told he did not qualify and was given a list of companies to apply to from the ministry. McLean said it was an appalling state of an affairs when a young Caymanian had studied long and hard to follow that dream and qualify in his chosen profession to be turned away by his own country. McLean said that in the end his family member had gone to Jamaica, where the Defence Force there was helping the young pilot with further training and more flying hours.

Talking about the wider problem of young Caymanians being marginalized, McLean spoke of and the need for government to address the issue of those returning from college and training overseas not being able to find opportunities and the vicious circle of employers wanting them to have experience when no employer was prepared to give them a chance to gain experience.

McLean said he hoped his family was not being discriminated against but when he began trying to secure work at home he was rejected. McLean described what happened to his nephew as an abomination. Aware that he is not yet a qualified pilot, Mclean said he could not believe that the RCIPS could not offer him an entry level job where he helped on maintaining the chopper and support work and flew with the pilots to increase his flying time.

The East End member said the budget meant nothing if “our own people are not a part of it”, pointed to the mounting disillusionment of young Caymanians and the pressing need to remove the stumbling blocks placed in front of them.

As he wrapped up the debate, McLaughlin said he had to address the member’s allegations as he said that his nephew was assisted to look at numerous other possibilities, from training with the military in the UK or helping him find a commercial placement. The premier said the vacancy for the helicopter pilot with the RCIPS was for a fully qualified helicopter pilot and McLean’s nephew did not yet have anything close to the flying time required.

McLaughlin read from a lengthy memo which outlined all that the ministry of home affairs had done to try and assist McLean’s young nephew to find a place where he could increase his flying time and work towards joining the air support unit with the RCIPS.

He said that the ministry was also trying to find funding to help Darren McLean increase his flying hours or find training. The premier also said he had been invited by the Unit to join come along and fly as an observer but the RCIPS cannot take him on until his flying hours have increased.

The premier was also clearly angry that McLean had made such a public issue alleging that nothing had been done to help the young McLean in his dream. McLaughlin said the member knew full well that he was not involved in any kind of conspiracy to keep his nephew from his lifelong dream of becoming a helicopter pilot.

“Nothing could be further from truth and he knows in his heart of hearts that it would never cross my mind. He knows my advocacy for young people in this country; he was part of same party and administration as me for years … What he did … was wrong by any measure,” the premier said, adding that government was continuing to assist and he needed to set the record straight as the country was not being told the truth about what had happened.

Continue Reading

Seamen benefit reform coming

(CNS): The premier has signalled that the Progressives will be examining the criteria and circumstances under which benefits are given to veterans and ex-servicemen. The issue was raised when Finance Committee examined the Community Affairs Ministry Friday and voted on several line items that amount to many millions of dollars given in welfare, poor relief and benefit payments to various different groups. Government is expecting to help around 1,000 families during the course of this budget year temporarily with food vouchers, rent, school, lunches and other welfare support but a significant sum is paid to seamen and veterans or their widows, none of which is means tested. Over 70 seamen are waiting to get on the list, which has some 800 recipients already on it.

Government is spending over $6.2 million in direct benefit payments to Caymanians or their surviving widows who served at sea, fought in either of the world wars or served in the Trinidad Navy. The payment of around $500 is paid to those who qualify, regardless of their income, and some elderly seamen and veterans are poor and in need but there are now concerns that some of those receiving benefits are not. However, there are 700 ex-seamen still waiting to get on the list but cannot because government does not have the resources to add new beneficiaries.

The extent of support that government pays to people in need was revealed during the scrutiny of both the output groups to manage the diverse range of welfare, benefits and support that government gives to the elderly, families in need and other indigents and the transfer payments.

There were questions regarding the number of veterans and seaman Cayman still has receiving benefits, which by its very nature was expected to decline over the years, but because many of the men who fought in the war or served at sea have younger widows the numbers have not begun to decline as anticipated.

Arden McLean said the policy of paying any man who had been to sea regardless of his financial circumstances was a badly thought out policy and had been introduced to help politicians in the late 1990s win an election.

However, Premier Alden McLaughlin, who is also the home and community affairs minister, said that his government would be examining the criteria and the circumstances surrounding these benefits and that the subject was expected to be discussed by caucus as the cost was escalating.

McLaughlin said Cabinet was already considering some recommendations and over the next few months some decisions would be made about the climbing costs and growing waiting list. He said people only come off the seamen of veterans list if they move overseas or die. Even then, much younger widows are still entitled to the benefit payment. As of 31 May, he said, more than 800 were getting payments while 793 people were on the waiting list. He pointed out that as more ex-seamen reach 60, that list grows and the government did not have the means to increase the budget for benefits.

Captain Eugene Ebanks said it was unfair when those in need, some of whom had been on the list for several years, were not getting anything when others who are not so badly off were.

With the Community Affairs Ministry also dealing with an increase in the need for permanent recipients of benefits, such as the elderly, disabled and indigent Caymanians, as well as families seeking temporary poor relief, the amount of welfares government has to hand out is increasing.

While some MLAs were clearly concerned about the amount of welfare being paid out of a cash-strapped public purse, others pointed out that it was an illustration of how bad things had become for many people.

Arden McLean, the independent member for East End, said it was a clear signal that “a lot of people are hurting and coming to government for assistance”, a sentiment shared by veteran politician and PPM backbencher Anthony Eden.

“I have never seen so many people hurting in my entire life. During my political career it has never been this bad. It’s rough, rough out there,” Eden said, as he warned that something had to happen to prevent people from turning to violence.

The rising levels of the support needed in the community also led to a number of questions about how Cayman was dealing with its aging population.

The premier signalled that he was examining the re-introduction of liens on the homes and assets of the elderly who were in long term residential care or were on government benefits. McLaughlin said that too many families were expecting to inherit property from the elderly parents and were blocking the sale of land of homes to pay for their care. McLaughlin said many, older Caymanians have such assets but they do not have cash so government was picking up the tab.

He said one of the challenges, because of the advance in the social services system and health care, was a common belief of children that their parents' property shouldn’t be signed over to government. McLaughlin said the last government had abandoned the lien process but the amount of money government advances to people who have assets was growing. He explained that when they then pass on, the children inherit the property but the government is left out of pocket.

He said there were concerns about the elderly whose families were not taking care of them when they can’t take care of themselves and can’t afford to stay at the Pines, which although partially supported by government, is a private rest home. He said government had to find a way to help the elderly live in dignity.

Community Affairs Chief Officer Dorine Whittaker said that this financial year was the year that the ministry would be examining the elderly and their circumstance more closely. Government, she told the committee, has gradually been collecting data and information about the circumstances of Cayman’s elderly population and consulting with them about how they are living.

Continue Reading