January 23, 2022

The Editor Speaks: Civil servants cleared of wrongdoing in Carepay investigation but found doing nothing. The safest option?

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Colin Wilsonweb2It was a pretty damning report that was executed by the Internal Audit Unit of the Cayman Islands into the Carepay procurement process that followed the imprisonment of Canover Watson, the former chairman of the Health Services Authority. Watson was found guilty of conspiracy to defraud, fraud on the government, conflict of interest and breach of trust by a public official. Carepay, being at the centre of the investigation.

The government put a deliberate spin on the announcement pushing hard the fact that the report concluded there was no criminal activity or misconduct on the part of any of the civil servants involved in Carepay.

In fact there was precious little activity or conduct executed by any civil servant to do with Carepay.

The investigation found, however, “instances of non-compliance with the PM&FL and established operating procedures, as well as internal control deficiencies. We also determined that there was an absence of the expected standard of care and professional skepticism in the actions of public servants in the processing of payments related to the procurement of the CarePay System.

“In regards to the extent of the failure of the procurement process such that it resulted in a criminal conviction, we have determined that this was heavily related to the lack of information between the Ministry of Health and the Health Services Authority regarding the procurement that was being undertaken. For the procurement of the CarePay System; which was so integral to the HSA’s strategic objectives, and required such large outlay of government funds, the CEO should have been included to a large extent in the communications between the Minister and the Board Chairman. Additionally, the Chief Officer as the principal source of advice to the Minister should have been privy to all communications on the CarePay procurement as they relate to significant policy decisions to be undertaken under the remit of the Ministry of Health.

“During the time of the procurement, the former Board Chairman in addition to operating in the role of Chairman of the Health Services Authority, was also appointed as the Chairman of the procurement committee for the CarePay System. Both the Ministry of Health’s and the HSA’s personnel, placed a significant level of confidence and trust in the former Chairman of the Board and as such, literally handed the management of the procurement off to him, without scrutiny or oversight. He was therefore relied on heavily, for decisions in regards to the project.”

The investigation concluded the following major factors that contributed to the breakdown in the procurement process:

. the lack of an effective governance framework between the Ministry of Health and the Health Services Authority that would facilitate the CEO’s full awareness of all Ministerial directives that impact the HSA;
. the involvement of the Board Chairman in conflicting roles including the operational duties of the Health Services Authority;
.the view held by the HSA’s finance officers regarding prior financial arrangements between the Ministry of Health and the HSA;
. the general absence of information provided to the financial officers within the Ministry of Health and the HSA; and
.the inappropriate administrative structure that was in place for the multi-agency procurement.

It was also found instances of “non-compliance with the established procurement policies and procedures of the Cayman Islands Government which are summarized below:

 A documented business case was not developed to assess value for money prior to embarking on the procurement of the Carepay System;

. An approved capital appropriation was not made in the 2011/12 budget for the procurement of the CarePay System, although we recognize that the 2011/12 budget was approved prior to the identification of this solution.

. There was non-compliance with the CTC tender process requirement to give consideration to extending the tender deadline where valid queries are raised in regards to the Request for Proposal.”

I must ask why were the established procurement policies and procedures not executed and will any civil servant receive any reprimand, demotion, etc. because of it?

Another incredible finding was “A lack of an expected standard of care and professional skepticism in the payment of invoices in totaling CI$1,507,500 by the Health Services Authority. The Ministry of Health funded the HSA for an equity injection on the basis of a request from the former Board Chairman however the HSA finance officers advised that they had no knowledge of this equity funding. The HSA officials, at the instructions of the former Board Chairman paid out the funds to AIS Cayman, without an approved contract of service and despite the fact that the invoices were addressed to the Ministry of Health and not to the HSA.”

Someone must have been suspicious and at least queried what was going on but perhaps they were afraid to ask or talk to anyone about it.

Hardly ever does a Whistleblower keep his job and, after it is made public who he/she is, find another one.

Doing and saying nothing appears to be the safe option if not the right one.

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