From Office of the Auditor General Cayman Islands

#1 Poor management of construction projects significantly increased the Government’s costs

Projects to construct high schools and build additions at four primary schools were badly managed by the Ministry of Education, significantly increasing construction costs, says the Auditor General in his report made public today. Due to poor record keeping by the Ministry, the audit could not determine the exact amount of the cost escalation, but the report says the figure is likely more than $25 million.

“The Ministry of Education is set up to deliver education programs and achieve the best outcomes for students,” said Mr. Swarbrick. “It does not have the systems and practices or the expertise needed to build infrastructure.”

In the report, titled “Major Capital Projects: Construction of Schools,” Mr. Swarbrick notes that only one of three planned high schools was completed, at double the original contracted price; and four primary school additions came in at 34% over budget.

The audit found that a contributing factor in the overspending was the role played by the former Minister of Education during the years 2009 to early 2013. The report describes in detail how government officials allowed the Minister to be involved in day to day project management and decision making. This obscured accountability for the cost overruns and the late delivery of the schools projects and, ultimately, it contravened Cayman Islands law.

“The Ministry has delivered less than it promised at a far higher cost than planned, and what has been delivered has been late,” said Mr. Swarbrick. “The people of the Cayman Islands and the students who need proper buildings in which to learn are still waiting for the high school infrastructure promised by the Government several years ago.”

The audit followed an audit report issued in 2012, which reviewed the high school projects up to the point where the contracts were signed in 2008.

#2 Government needs to better manage its social assistance programs, says Auditor General

Government programs for those in need are poorly managed, says Auditor General Alastair Swarbrick in his report made public today. The Report outlines significant shortcomings in the management of the Government’s social assistance programs.

“We found that no one is in charge of ensuring that these programmes achieve value for the money spent,” said Mr. Swarbrick. “No one in Government knows the extent to which the money spent assists the people it should be helping.”

The audit looked at the 12 programs that provide for temporary poor relief, permanent poor relief, medical care and seamen’s benefits. These programs account for $50 million in annual spending, or 10% of the Government’s total core spending.

The audit found a lack of formal measures to ensure that the programmes serve the people they were designed to help. They operate without clear objectives and with no measurement of the programmes’ results. This has led to poor decision making and the significant possibility that those in real need are not getting the help they should be getting. In addition, many of the programs operate without proper legislative authority.

The audit also found significant deficiencies in the way Government officials determine eligibility criteria for many of the social assistance programmes, leaving many people unable to obtain the assistance they need. Where criteria are used, such as minimum income thresholds, there is little information available to determine if they are appropriate.

Recent internal audits and the Government’s own studies have highlighted many of the same concerns. However, Mr. Swarbrick’s team found that the Government has not taken action to fix some very fundamental problems.

“The Government could utilize public funds more effectively and provide greater assistance to those in need if it actively managed these important government programmes,” said the Auditor General. “Officials need to act expeditiously on my recommendations.”

On a positive note, the audit found a significant decline in the number of staff decisions overturned by ministerial direction. The audit found that there were 37 unlawful interventions in 2012, 14 in 2013 and only two 2014.

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