July 26, 2021

SAGC Accountability from OAG

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Accountability FrontEXECUTIVE SUMMARY From The Accountability of Statutory Authorities and Government Companies

The nineteen statutory authorities and seven government companies (SAGCs) of the Cayman Islands Government deliver a wide range of services and programs.  From providing health care, to managing an airline and operating tourist attractions, these entities are critical to the daily lives of the residents and visitors.

The Public Management and Finance Law (PMFL) sets out the framework for SAGCs to be accountable to core government for their activities and use of public funds.  This framework, if implemented appropriately, would provide a good means to ensure that there were clear expectations for the kind of results expected by Government and good accountability for the results achieved.

Our audit found that the accountability framework is not working as well as it should; resulting in little accountability for the activities of most of the SAGCs. Without the accountability in place required by the PMFL, there is little assurance that the SAGCs are operating effectively and achieving the results expected by Government. The main findings from our audit were:

The results expected to be delivered by SAGCs are not clearly stated.  The results to be achieved by SAGCs, as set out in their ownership agreements, are focused more on the activities to be delivered rather than the results to be achieved, and are not clearly aligned to the objectives of the Government. The ownership agreements at present do not provide a sound framework for SAGCs to reports the results of their work or demonstrate how they achieved value for money for the funding provided by government.

There is general confusion around the roles and responsibilities within the accountability framework. The roles of the Governor in Cabinet, Ministers, Chief Officers, and the board and officers of the SAGCs companies provided for in the PMFL and their enabling legislation or articles of association are not always clearly understood and respected in practice. This confusion led, we believe, to the roles not being carried out effectively.

Very few SAGCs produce an annual report describing their activities and providing information about their results. Whilst there  have been improvements with SAGCs financial statement reporting in recent years, annual reports on ownership performance and audited financial statements are still not delivered on a timely basis and there remain concerns about the ability of some SAGCs to provide credible financial and non-financial performance information. With more timely and credible reporting, the result should be improved relationships between core government and the SAGCs.

There are five recommendations in the report that we believe will improve the relationships of SAGCs with Government, leading to more effective management and the achievement of better results.

See attached recommendations

More information regarding this report can be obtained by contacting Martin Ruben at the Office of the Auditor General at (345) 244-3206. A copy of the report is available at www.auditorgeneral.ky.

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