CI Government Q3 2024 Financial Report Gazetted

The Cayman Islands Government’s Quarterly Financial Report for the Nine-Month Period Ended 30 September 2024 was published in the Cayman Islands Gazette on Friday, 8 November as required by law.

The unaudited financial results for the Third Quarter 2024 show a $135.7 million surplus for the Core Government and a $148.6 million surplus for the Entire Public Sector (EPS). 

Net Assets of the Government were $2.3 billion, with overall bank account balances of $485.0 million in cash and deposits.

Surplus

The overall EPS Surplus of $148.6 million was $52.1 million greater than the projected year-to-date operating surplus of $96.5 million.

This favourable position was due to actual revenues being higher than budgeted revenues by $27.0 million for the period. 

Additionally, Statutory Authorities & Government Companies (SAGCs) contributed $12.9 million to the overall surplus for the EPS; exceeding their estimated results for the first three quarters of 2024 by $14.2 million, when compared to an expected deficit of $1.3 million.

Comparing year-on-year numbers, the EPS Surplus was $32.0 million higher than that achieved for the same period in 2023 with SAGC third quarter results being $7.5 million higher than the prior year.  

Revenues

Compared to the same period in the prior year, total revenues of Core Government have increased by $27.0 million, mainly due to favourable variances of $7.3 million and $15.3 million in Coercive Revenue and Investment Revenue, respectively. 

The first nine months of 2024 generated coercive revenues of $848.4 million, which was $7.3 million more than budgeted expectations and $57.2 million higher than the 2023 year-to-date actual results.

The positive variance in 2024 coercive revenues compared to budget can be primarily attributed to:

• A $7.4 million positive variance in Other Company Fees – Exempt Companies, which were higher than the $105.2 million expected budgeted amount for the Third Quarter due to increased registration. When compared to prior year-to-date performance, the 2024 results were $19.4 million greater.

• A $5.4 million positive variance in Other/Miscellaneous Stamp Duty, which was higher due to the continued high demand in the real estate market. Current year results are $2.3 million higher when compared to actual results for the same period in 2023.

• A $6.4 million positive variance in Partnership fees, which exceeded budget owing to higher than anticipated registration in this category. Compared to the prior year actual there is a $7.2 million positive variance.

• A $4.0 million positive variance in Private Fund Fees, which performed better than the $61.5 million anticipated due to an increase in the volume of funds registered.

• A $17.9 million positive variance in Stamp Duty – Land Transfers, which was higher due to higher volumes of property transactions coupled with increasing property values. The 2024 stamp duties of $68.5 million are $10.8 million more than the comparable quarter in 2023

Notwithstanding the overall favourable results in coercive revenues collected, when compared to the 2024 Budget, there were certain areas that fell short of projected expectations including:

• Other Import Duty with a $16.1 million negative variance. However, when compared to the results for prior year-to-date Other Import Duties are on par with the 2023 results.

• Department of International Tax Cooperation (DITC) Filing Fees with a $9.5 million negative variance compared to budget. This is a new coercive revenue stream that was slated to be introduced in 2024, however the commencement date has been deferred to 2025

Investment Revenues produced $23.6 million, which was $15.3 million more than the 2024 budgeted revenue for the nine-month period.

Investment Revenue derives primarily from Interest earned on Marketable Securities (Fixed Deposits, Other Securities and Cash).

Interest on Marketable Securities, reflecting interest earned on bank account balances held in the form of fixed deposits, has exceeded the initial full year budgeted revenue of $11.2 million, by $12.4 million.

Higher cash balances have afforded higher values to be placed on fixed deposit and this has driven higher income earned on investments.

Expenses

Expenses for the first nine months of 2024 amounted to $778.3 million. This amount was $10.9 million less than the year-to-date budget of $789.2 million. Compared to the prior year-to-date actuals, total expenses for 2023 are $43.3 million higher.

Costs relating to personnel for the first nine months of 2024 amounted to $341.0 million, which were $34.4 million less than the budgeted $375.4 million mainly due to delayed recruitment. These costs are $17.4 million more than for the same period in 2023.

Supplies and Consumables costs were $110.6 million for the period and were $11.5 million less than the year-to-date budget. Compared to the prior year-to-date costs of $102.0 million, the 2024 expenses are $8.6 million more. It is anticipated that as more projects come online during the remaining quarter of 2024, costs will align closer to the amounts anticipated in the full-year budget.

The savings against budget in staff costs were offset by higher-than-budgeted levels of expenditure in Outputs from SAGCs by $14.4 million, Outputs from Non-Governmental Suppliers by $22.1 million, and Transfer Payments by $11.2 million.

Payments to the Health Services Authority (HSA) exceeded the original year-to-date budget by $16.6 million. This adverse variance with respect to the HSA is due to actual costs for the Care of Indigents exceeding the budget for this category.

Outputs from Non-Governmental Suppliers of $54.9 million were $22.1 million more than the year-to-date original budget, mainly due to “NGS 55 Tertiary Care at Local and Overseas Institutions” being $24.5 million more than the year-to-date budget.

However, the total costs incurred with respect to Outputs from Non-Governmental Suppliers, for the first nine months of the year are $5.1 million less than for the same period in 2023.

Thus far in the 2024 financial year, Parliament has approved, via section 11(5) and section 12 of the Public Management and Finance Act, an additional $34.4 million for NGS 55.

Transfer Payments of $61.1 million were $11.2 million more than budgeted for the nine-month period. This variance is mainly due to overages in spending on Scholarships and Bursaries by $4.1million and Financial Assistance by $7.7 million.

Thus far in 2024, Cabinet has approved, via section 11(5) and section 12 of the Public Management and Finance Act, additional funding of $10.6 million for Financial Assistance.

When compared to the prior year-to-date amount of $50.0 million, the 30 September 2024 total year-to-date expenditure of $61.1 million represents an increase of $11.1 million.

Cash Position

Total cash and fixed deposits as at 30 September 2024, were $485.0 million. This amount includes Operating Cash and Deposits of $287.9 million and Reserves and Restricted Deposits of $197.1 million.

Conclusion

In conclusion, the report noted that the Third Quarter’s performance has positioned the Government to be optimistic about its overall financial performance for 2024.

However, the report acknowledged that during the final quarter of the year there will be a push to meet stated 2024 deliverables and advised that should all planned operational and capital spending materialise, the end of year surplus will be significantly reduced.

The Cayman Islands Government’s Unaudited Quarterly Financial Report for the Nine-Month Period Ended 30 September 2024 may be found online at: https://www.gov.ky/publication-detail/mfed-3rd-quarter-financial-report-for-2024