(CNS): It’s now over two years since the Office of the Auditor General, supported by the Public Accounts Committee, made over thirty recommendations to the Cayman Islands Government on how to improve its budgeting process and management of public spending. But only two recommendations have been implemented. The finance ministry has made little progress and it could be another four years before the public sees a more user-friendly, transparent and outcome-focused budget of the cash government collects from all its residents.

In a new report from her office released Thursday, Auditor General Sue Winspear said she was disappointed with the slow progress the CIG has made in implementing the OAG’s recommendations regarding budgeting, financial management and reporting. The special report, Follow-up on past PAC recommendations 2023, is the latest in a series analyzing government’s progress with implementing recommendations made by the Public Accounts Committee (PAC).

Looking back at previous reports, Improving Financial Accountability and Transparency: Budgeting and Improving Financial Accountability, published in December 2020, and Transparency: Financial Management and Reporting, published in May 2021, Winspear said that the ministry recently commissioned consultants to move the work forward.

But as a result, the timeline for implementing her recommendations has been pushed back to December 2025, despite the CIG’s long-stated desire to modernise the budget process and demonstrate to the people how the money it spends is working for them. Winspear warned it would be at least another five years before the people would see any noticeable changes for the better.

“This further delay means that we will not see more user-friendly, transparent and outcomes-focused budgets until 2026 and 2027,” Winspear said as she explained why this matters. “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 Government is not currently reporting some important information needed for proper accountability like the full cost of the liability for post-retirement benefits.”

Winspear stated in her report that this is contributing to the adverse opinion for the Entire Public Sector financial statements and without remedy that position will not improve. The CIG is also still not proactively disclosing information, as required by its own policies, or making annual reports publicly available on websites after they have been tabled in the parliament.

Given the lack of meetings, she urged parliament to update the standing orders to allow reports to be tabled even when members are not meeting. “I continue to be concerned that the lack of regular meetings of the parliament contributes to the late tabling of annual reports, financial statements and government minutes, which hampers the accountability process,” she added.

In this latest report, Winspear details the failings of the finance ministry in rolling out the much-needed improvements. At the end of last month, just two of the 33 recommendations had been implemented. There has been no or limited progress on four, with 25 still in progress or earmarked for some planned action. Another two were rejected by the government.

One of the main recommendations that Winspear has made, which has been accepted as important by both the administrative and successive political arms of government, is the need for the budget to reflect the government’s policy aims and show that the money it has spent is achieving them, measuring the actual outcomes as much as the outputs.

Currently, the budget documents tell the public how many meetings a government entity may have held and how many emails are sent or reports written, but it says nothing about whether or not the goals of those actions were achieved in line with the government’s policies.

Even though the CIG has made a commitment to improving how it reports on public finances, in reality, it is making very slow progress on this fundamental goal. In September last year, the Ministry of Finance signed a contract with EY Cayman Ltd to deliver a business case on creating a budgeting and reporting framework to shift the focus to outcomes that are defined and monitored and to make budget documents more concise, clear and easy to understand.

The cost of the business case was CI$248,800. A draft copy was delivered to the ministry at the end of November, but according to a summary note, that has not been made public because it was only at last week’s Cabinet meeting that the document was reviewed by ministers, who appear to have approved the consultants ‘Option 3’, though no details of what that is have been revealed.

The next step, according to the government’s management response in the OAG’s report, is the
procurement of more consultancy services to help with the implementation of the new framework. Officials said this will begin next month and continue until the end of 2025. But Winspear expressed her concerns about that timeline and the delays, pointing out that the implementation will now be three years later than originally planned.

The timeline for many of the other recommendations made by Winspear and the PAC, all of which are designed to make the management of taxpayers’ cash more transparent and the CIG more accountable, has also been delayed. Very few important changes are likely to have been properly implemented before the next election, ensuring that yet another administration will evade proper scrutiny by the electorate on how it is using the more than CI$1 billion it collects.

Winspear also confirmed that the government continues to be late with the formal response, required by law, to PAC reports. One of those outstanding minutes relates to a report tabled in parliament looking at the myriad problems surrounding OfReg, which was tabled in parliament more than four years ago.

See the latest report from the OAG in the CNS Library.