December 1, 2020

Arrears continue to plague accounts

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The Auditor General, in a report released yesterday, says that arrears in government financial reporting continue to plague official accounts, although the backlog has been significantly reduced, while questions linger about current statements.

Of the government’s 12 ministries and portfolios, Auditor General Alastair Swarbrick has completed three, another four are largely done and the remaining five are in progress. Of the three he has finished, however, two have earned a “qualified” verdict, meaning a portion of them “cannot be relied upon”.

Of the 26 government companies and Statutory Authorities, four have also earned a “qualified” mark: the Cayman Turtle Farm, the Civil Aviation Authority, the Information and Communications Authority and the National Roads Authority.

Mr Swarbrick has completed 11 of the statements, with 13 more in progress, but has yet to start two more.

He said he was “concerned about the timescales for completing” arrears for six of them, however, including Cayman Airways and the Cayman Turtle Farm, chronic reporting offenders through the years.

Statements from another chronic offender, however, the Health Services Authority, are up to date, and the review of its current report is “in progress”.

All 38 entities had submitted their 2010/11 financial statements on time, Mr Swarbrick said, paying tribute to “this important step towards the ultimate goal” of full public accountability.

While he pointed to improvements from last year, when only 16 entities had filed reports by the statutory 31 August deadline, he said that eight of them, all authorities or companies, “were not considered auditable: Cayman Airways, the National Museum, National Gallery, National Drug Council, the Sister islands Affordable Housing Development Corporation, the Tourism Attraction Board, the Turtle Farm and UCCI.

Concerns regarding the eight, he said in an exercise in understatement, “were that the information is not as robust as we would like. There is some ongoing concern from previous audits.

“The most important step in the whole process is to get these things tabled” in the LA, as prescribed by law, he said. Otherwise, “they don’t do any good. The government and decision-makers need to know where the money is and how it is being spent. The legislature needs to hold the government to account and know how funds are used, while the public needs to know how the fees and duties it pays are being spent.”

Pointing to ongoing arrears, some dating to 2004/05, he said “the Ministries and Portfolios are the key concerns. We have had some good progress but there is still a ways to go.

“I am still concerned about the quality of some of the financial information,” he continued, saying the reports were of little value if they did not “present a fair and true picture of the financial position, and have information available with the financial statements to explain what the results mean.”

Of 70 backlogs from last year, he said, “that is now down to 20, and we are working on them.“ At least 12 he said, were from statutory authorities and government companies, “and there are a couple from ministries and portfolios. Hopefully it will be down to two or three by the next time.”

The Office of the Auditor General, he said, looked forward to a study of fixed assets — land, infrastructure buildings — that has not been done in years, and hoped to gain insight into executive accounts, which are not part of regular official financial statements, in an effort, he said, to understand “the position of government”.

Upcoming studies, he said, included a survey – due in weeks — of overseas medical expenses involving airlifts and contractors to manage placements and fees at hospitals abroad.

Another project, due in late February, will look at procurement and construction for capital projects such as the new Government Administration Building and the new high schools, while a third survey will examine government financial reporting.

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