Monday, July 31, 2017

Cayman Islands Auditor General: Aviation boards’ problems persist

Sue Winspear
A number of mismanagement problems in local government boards appointed to oversee aviation-related matters went unaddressed for years after a December 2013 audit revealed some embarrassing practices at those entities.

However, Cayman Islands Auditor General Sue Winspear said Friday that a follow-up review completed this month by her office showed better progress among the aviation-related boards.

“Overall, we concluded that a number of the issues identified in our original report on governance of statutory authorities and government companies in December 2013 remained,” Ms. Winspear wrote in her follow-up review. “Since our audits were completed, all-three [aviation-related] bodies have taken actions and plan to take further action to improve their governance arrangements.”

Public Accounts Committee Chairman Ezzard Miller said committee members remained to be convinced: “We are pleased that the [entities] have taken action to implement some of the recommendations made by the auditor general. However, we note that a number of actions remain outstanding and are planned for the remainder of 2017.”

While the initial December 2013 auditors report focused on dozens of government authorities and companies, the July 2017 follow-up focused solely on the aviation-related boards of the Civil Aviation Authority, the Cayman Islands Airports Authority and Cayman Airways.

Ms. Winspear said, at one point, the auditor’s office had intended to review each one of the 27 government authorities and companies to check their progress, but she said – due to government improvements in the area and the recent passage of the Public Authorities Law – a more targeted approach was likely to be used to evaluate specific areas where problems persisted.

The 2013 audit revealed a number of questionable practices among the aviation-related authorities:

The Cayman Islands Airports Authority paid some employees “severance packages” upon retirement that were not in their contracts, but were authorized by the board of directors. The amounts were paid in addition to employee pensions

In May 2013, the CIAA board paid one of its own members $46,000 for the production of an internal audit that led to the removal of former authority chief Jeremy Jackson and former chief financial officer Shelly Ware

The previous two bullet points were shown as examples of where auditors found a general risk in board operations among the three aviation entities. Namely, that board members were making operational decisions that should have been the responsibility of senior managers

Auditors found that “supporting papers and reports” for decisions made by the boards were not always retained

Board members were appointed to these entities without Cabinet being aware of whether they possessed “any specific skills” required for the post

Only one of the three entities had developed a strategic plan and none of the entities had a written policy stating what the organization expected from its board members

There was no requirement at the time to “rotate” board members.

Although the Public Authorities Law was passed in the final Legislative Assembly meeting of the previous government’s term, it had not been brought into force at the time the follow-up report was completed, auditors noted.

In addition to implementing that law, the Cayman Islands government was advised to expand the pool of potential board members for the aviation authorities, consult beforehand to determine whether appointees had any specific skills required for the post and provide “induction training” for new board members.

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