OAG highlights Government’s huge healthcare obligations

In its recently released report on the audit of the 2018 financial reports provided by Government Ministries and other entities, the Office of the Auditor General (OAG) pointed out the enormous sums that Government is obliged to pay for healthcare to individuals who were once employed by Government but who were now retired.

The OAG report explained that during the 2016-2017 fiscal period, a decision was made by the Ministry of Finance that all Statutory Agencies and Government Companies (SAGCs) which had employees who were deemed eligible to receive post retirement healthcare benefit should reflect this obligation in their respective financial statements. To be eligible for these benefits, employees of SAGCs would have had to been previously employed with central Government and been transferred to a SAGC and have worked no less than 10 years in the public service and retired from public service.

The Health Services Authority led the pack in terms of the size of its outstanding healthcare obligations, with obligations totaling $149,118,000 as at 31st December 2017 and $137,416,000 as at 31st December 2018. They were followed by the Port Authority, with just $34,694 as at the end of 2017, but rising to $33,105,000 as at the end of 2018. They were followed by the Water Authority with $18,065,000 (31 December 2017) and $16,764,000 (31st December 2018) and then the National Roads Authority with $16,510,000 and $15,545,000, respectively. The total obligations as at 31st December 2018 for SAGCs was $218,177,000 which did not include the Cayman Islands Airports Authority whose healthcare obligations totaled $15,763,000 as at 31st December 2017 but whose audit for 31st December 2018 was still ongoing.

As far as the Health Services Authority was concerned, the Auditor General Sue Winspear said she was drawing attention to the fact that the recognition of post-retirement health liability resulted in a net deficit of $7.3 million. This event raised a substantial doubt about the HSA’s ability to continue as a going concern, she said.