Archive for October 22nd, 2014

Key authorities in trouble

| 22/10/2014 | 75 Comments

(CNS): A number of the government’s key authorities are not only losing money but facing major management issues from board interference and bad debts to a lack of compliance with tendering processes and the laws which established these entities. In his latest report looking at the state of all of government’s statutory authorities and companies (SAGC) for the financial year ending 30 June 2012, the auditor general has highlighted many weaknesses in the business models and has raised significant questions about Civil Aviation, the Airports Authority, the Maritime Authority, the Port Authority, Health Services Authority and the Tourism Attraction Board, as well as the usual suspects: the Turtle Farm and Cayman Airways.

While financial reporting and governance environments at many SAGCs has begun to improve over the last few years, Alastair Swarbrick’s latest report demonstrates that, like central government, the semi-autonomous public entities are also still struggling with a catalogue of issues. These undermine their performance and put at risk the tax payers' money injected into these entities as a subsidies or as payments made by government for their services.

In a detailed analysis of the 26 entities that were audited for the financial year ending on 30 June 2012, less than half were able to meet the statutory deadlines in preparing financial accounts. In the final analysis one entity, the Children and Youth Services Foundation, failed to complete any financial accounts, ten others received qualified opinions and one, the Sister Islands Affordable Housing Development Corporation, was disclaimed. Of the remaining 14 that were given unqualified opinions, Swarbrick indicated that there were still many problems in the management and financial stability of these government-owned entities.

Notwithstanding some improvements, the Office of the Auditor General (OAG) report pointed to many shortcomings, including the failure of the SAGCs to table full reports to the Legislative Assembly in a timely manner, which Swarbrick said was fundamental. There were still financial management problems in many, as well as board interference and conflicts of interest that are not only undermining the running of many of these authorities and companies but leaving public cash vulnerable to abuse.

“There are still fundamental gaps in the accountability of government for the use of public resources and a significant way to go before financial accountability is restored,” Swarbrick wrote, despite his indication that things are improving. “My reports also highlight the significant weaknesses in governance and control frameworks that I believe are impeding the ability for entities to prepare timely and accurate financial reports.”

Swarbrick highlighted a litany of problems that authorities face. Some he found were already in dire financial circumstances, and while others were holding on, there were warning signs of significant future problems with their future viability. For some, it was not just a matter of poor financial performance and waste but conflicts of interest and mismanagement. SAGCs were straining government coffers while receiving payments and subsidies from the public purse but still returning further deficits.

The problems he found were varied and plentiful and although all but two of the 26 entities audited raised questions and concerns for the audit office, Swarbrick pointed to the Airport Authority, Civil Aviation, the HSA, the port and the Tourism Attraction Board as particularly troubling.

Breakdowns in governance, political interference and conflicts of interest at the Airport Authority were just some of the reasons why the CIAA received a qualified opinion. Swarbrick highlighted an already well-documented catalogue of concerns at the airport, including the former minister’s direction to the board regarding operational matters.

The report stated that McKeeva Bush provided direction “beyond his lawful authority” and directed who and how many ground handlers there would be, two of which were owned by board members at the time. The board also interfered beyond its authority with staff and operational matters. The conflicts of interest were also “so pervasive” they had the “potential to undermine the ability of the board to operate in the best interests of CIAA and negatively impact its financial performance.”

The report also indicated serious problems at Civil Aviation, where one of the reasons for its qualification was the potential lack of disclosure of related party transactions by the board. Swarbrick said there was evidence of a breakdown between the board and management and a pay dispute. He also found policy and human resource problems affecting the governance of the CAA.

The Port Authority was also facing a litany of problems undermining its ability to operate. From issues over related party transactions and the absence of good governance standards for the board to non-compliance with the port regulations and its increasing liabilities, Swarbrick highlighted several internal control and financial management concerns. The auditor also noted the amount of money the port authority had spent on legal fees trying to fight FOI requests at the direction of the board.

The HSA faced major issues, especially over bad debt. Its qualified opinion related to problems the auditors found with revenue records, the accuracy of the accumulative deficit, as well as the hospital’s difficulties in absorbing patient care costs that government had not covered as it exceeded the Ministry of Health’s budget.

Although the Tourism Attraction Board is much smaller than the other four critical authorities, the significant amount of problems raised serious concerns. Swarbrick said the number of internal control and other governance problems were so bad that the TAB was at risk of error, fraud and misuse of public funds. From serious discrepancies in the management of cash to theft and misappropriation of money, the report pointed to more ministerial interference. Bush, who was the minister and premier at the time, had reportedly indicated who should be given contracts to supply services.

With numerous problems still facing SAGCs, Swarbrick noted that even the ones that are improving are hindered by the fact that reports are not being made public. The importance of accountability was highlighted by the number of problems the auditors have found and now exposed some two years after the fact. Swarbrick said that until reports are completed and made public in a timely fashion, the Legislative Assembly would continue to remain in the dark about how SAGCs collect and spend public cash.

See the OAG full report on SAGCs below.

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Guilty plea to lesser offence

| 22/10/2014 | 11 Comments

(CNS): On the second day of her trial in Grand Court on Cayman Brac, Katie Jo Powell (26) pleaded guilty to wounding with intent to cause grievous bodily harm on the basis of excessive self-defence, a third charge added to her indictment. Powell had been charged with the attempted murder of Yves Anthony De la Torre (29) in the early hours of Saturday 20 April 2013, with the alternative charge of wounding with intent. However, after prosecutor Neil Kumar wrapped up the crown’s case against her, which included the dramatic last minute additional evidence of a video recording the victim had made of himself after Powell had stabbed him, he said the proposed course of a guilty plea to the new charge, which had been suggested by the defence, was acceptable to the director of public prosecutions (DPP).

Justice Charles Quin told the defendant that this was a “very sensible approach”. It was clear that she had stabbed him but, according to the medical report, the injuries were not serious or permanent and she was not 100 per cent to blame, the judge said.

He also commended the complainant, De la Torre, for taking a “mature view” by agreeing to this, noting the inconsistencies in his testimony. Although he was not in court, Justice Quin said he hoped that he would put this incident behind him.

“Everyone had had too much alcohol,” the judge said, in light of the evidence given by the victim, the defendant and the friends she had been out with that night.

Referring to De la Torre’s claims during his testimony Monday that he had been harassed by the police on Cayman Brac since he had moved to the island and that the officer who dropped him off at Powell’s house that night instead of Spot Bay, where he wanted to go, had been somehow complicit in the stabbing, the judge noted that De la Torre was very angry with the local police but said the investigating officer, PC Julian Durrant, had behaved impeccably and also commended the office of the DPP.

Although Powell did not take the stand, the statement she made to the police was read in court, in which she claimed that when she got home from the bar that night, she saw her friend Michelle Hunter sitting down with De la Torrebehind the house and they were both naked. She and her friend, Janna Parchment, found Hunter’s skinny jeans and helped her put them on. She told De la Torre to leave and picked up a knife from the kitchen.

Powell told police that De la Torre had “come at her” twice to get the knife from her but after that she had blacked out because she was drunk. When asked by the police, she said she did not know she stabbed him until the next day. When she was formally charged for attempted murder on 29 July 2013, she had stated that she was “only trying to defend myself”.

After hearing Powell’s statements, the judge watched a 10-minute video recording that De la Torre had made on his phone as he walked, bleeding from multiple stab wounds, from Powell’s home on the north west of Cayman Brac, next to Tip Top Boutique, to his mother’s apartment in Danzler Crescent on the south side. The video, which the victim had told the court about when he gave evidence Monday, was only given to the police that day, the 20 October, at 4:15pm after the court had adjourned for the day.

De la Torre, who said during his testimony that he has been seeing a psychiatrist since he was stabbed, was not in court Tuesday but his mother sobbed as she listened to the recording. “I want to go home; I want to go to Hawaii,” the victim said in the video.

Sentencing was set for Wednesday 17 December and the judge ordered a social inquiry report regarding the defendant as well as a victim impact report, which was requested by the crown.

Related article on CNS:

Stabbing trial opens on Brac

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