Auditor General: Government slow on financial management progress

The Office of the Auditor General has just released its latest report called ‘Follow-up on past PAC recommendations 2023 – Report 1’, which highlights the progress or lack of progress government is making with various recommendations the Public Accounts Committee (PAC) has made in recent years with regard to the way government handles its finances. The report highlights that government has made little progress since the OAG produced its last update, a frustration expressed by the Auditor General, Sue Winspear.

“The Auditor General was disappointed with slow progress in implementing budgeting, financial management and reporting recommendations,” a press release from the OAG stated.

This latest report - issued last week - was the latest in a series, updating the public on government’s progress with implementing the PAC’s recommendations for two reports: ‘Improving Financial Accountability and Transparency: Budgeting’ and Improving ‘Financial Accountability and Transparency: Financial Management and Reporting’.

The two OAG reports date back to December 2020 and May 2021 and made a total of 33 recommendations. The Government is required to formally respond to the PAC recommendations within three months of the PAC laying an Auditor General report in the House of Parliament.

As of February 2023, only two (6 per cent) of them had been implemented, there had been no or limited progress with four (12 per cent) of the recommendations and 25 (76 per cent) recommendations were in progress or action is planned. Government did not accept two (6 per cent) of the recommendations.

Sue Winspear said it was disappointing that only limited progress had been made in implementing the recommendations made to improve Cayman’s budgeting, financial management and reporting systems.

The report assesses progress with implementing the recommendations in ‘Improving Financial Accountability and Transparency: Budgeting’ that was published in December 2020 as Red – limited progress. One (6%) recommendation has been implemented, some progress or action is planned for 14 (82%), and limited or no progress has been made for two (12%).

The Auditor General said the Ministry of Finance had made limited progress in improving the government’s budgeting framework and processes, with only one recommendation implemented over the past two years.

“I acknowledge that the Ministry of Finance has recently commissioned consultants to take forward much of this work. However, it is disappointing that the timeline for implementing my recommendations has now been pushed back further to December 2025,” she stated. “This further delay means that we will not see more user-friendly, transparent and outcomes-focused budgets until 2026 and 2027. The budgeting system is fundamental to driving the efficient and effective use of Cayman’s finite resources and so while these changes may sound a little bureaucratic, they are really important.”

The report assesses the Government’s progress with implementing the recommendations in ‘Improving Financial Accountability and Transparency: Financial Management and Reporting’ from May 2021 as Red – limited progress. Two recommendations were not accepted. Of the remaining 14, one (6%) has been implemented, 11 (69%) have some progress or action is planned, and two (13%) have no or limited progress.

“Limited progress has been made in implementing my recommendations to improve the Government’s financial management and reporting.” Ms Winspear said. “The Ministry of Finance plans to take action as part of the overarching project on modernising the budgeting and financial reporting framework. But this means, again, it will be another five years at least before we see any improvements. The Government is not currently reporting some important information needed for proper accountability like the full cost of the liability for post-retirement benefits.”