Government slow in implementing PAC recommendations

(CMR) The Auditor General has again expressed disappointment in the slow progress made by the Government in implementing recommendations made by the Public Accounts Committee of Parliament to improve budgeting, financial management, and reporting.

Based on the Office of the Auditor General (OAG) latest report, Follow-up on past PAC recommendations 2023 – Report 1, issued today, 9 March, as of February 2023, only two (6 percent) of 33 recommendations made in 2020 and 2021 had been implemented.

“It is disappointing that only limited progress has been made in implementing the recommendations made to improve Cayman’s budgeting, financial management, and reporting systems,” Sue Winspear, the Auditor General, said.

The OAG Follow-up report provides an update on the Government’s progress with implementing recommendations made by the Public Accounts Committee (PAC) of the Parliament for two reports; Improving Financial Accountability and Transparency: Budgeting; and Improving Financial Accountability, and Transparency: Financial Management and Reporting.

The two OAG reports dated back to December 2020 and May 2021 and made a total of 33 recommendations. The PAC endorsed these recommendations but did not make any further of their own. Apart from the two recommendations implemented, the OAG said there had been no or limited progress, with four (12 percent) of the recommendations and 25 (76 percent) recommendations in progress or action planned. The Government didn’t accept two (6 percent) of the recommendations.

Reports rated ‘Red' or limited progress.

The report assesses progress in 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 says, “The Ministry of Finance has made limited progress in improving the Government’s budgeting framework and processes, with only one recommendation implemented over the past two years.”

Ms. Winspear adds, “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. 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 rated the Government’s progress in 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 planned, and two (13%) have no or limited progress. 

Another five years before any improvement is seen

The Auditor General says, “Limited progress has been made in implementing my recommendations to improve the Government’s financial management and reporting. The Ministry of Finance plans to take action as part of the overarching project on modernizing 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.” 

The Public Accounts Committee considers reports made by the Auditor General and generally endorses these recommendations. The PAC also makes further recommendations based on the hearings they hold at the time. The Cayman Islands 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.

The OAG report is available at www.auditorgeneral.gov.ky.