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Cayman Islands Auditor General says there are improvements but “still a significant way to go”

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  • the financial statements for 6 of the 15 entities for the year ending 30 June 2012 were completed in line with the statutory timetable, up from two in the previous year;
  • two years after the 30 June 2012 fiscal year two entities were still outstanding;
  • there continue to be significant delays in tabling annual reports and financial statements by the responsible ministries;
  • financial statements are difficult to locate and access on government' s websites
  • a number of entities have only been tabling their financial statements in the Legislative Assembly and not annual reports discussing their wider performance as required under the PMFL; and
  • there are significant weaknesses in the internal control environments and governance of certain entities creating increased risks of mismanagement and abuse.
  1. This report provides a summary of our audits of the ministries, portfolios and offices of the Cayman Islands Government for 2010-11 and 2011-12. Whilst I continue to see improvements in the quality and timeliness of the financial statements for these entities a lot more work is required before effective financial management and accountability for the use of public resources is restored. In particular I have significant concerns about:
  • the capacity in DAWLA and Tourism and Development to present reliable and credible financial statements for audit;
  • the leadership, organization and use of human resources in the financial function;
  • the implementation, operation and monitoring of proper internal controls and practices to protect public resources from being abused; and
  • the effectiveness of the current financial reporting framework to provide transparency in the use of public funds.
  1. There remains considerable room for improvement in the governance, internal controls and financial management of most entities. Senior management across government is responsible for the financial management of their entities and putting in place control systems to enable the effective stewardship of public resources and protect them from waste and abuse. There continues to be a lack of due regard by senior officials for ensuring that appropriate systems are in place exposing public funds to risks of waste and misuse.
  2. The government needs to seriously consider how it organises itself to effectively manage its financial resources, and provide strong and effective leadership to the financial function. A number of matters I have raised in the conduct of my audits are very significant and could effectively undermine the credibility of the government.
  3. I strongly recommend that the Legislative Assembly take note of my findings in this report and act promptly to ensure senior officials take action to mitigate the risks and opportunities for loss or abuse in the use of public resources.
  • Unqualified - The information contained in the financial statements can be relied upon;
  • Qualified - A qualified opinion means that a portion of the financial statements cannot be relied upon,but that the rest of the statements can be relied upon by the reader;
  • Adverse- There are such significant deficiencies with the information in the financial statements they should be considered unreliable for the user and the information contained therein is not trustworthy; and
  • Disclaimer- I was not provided with sufficient information to conduct an audit.

Published October 22, 2014

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