🏛️ Cayman Islands Government avoids addressing healthcare liability for retired civil servants

During a recent Public Accounts Committee (PAC) meeting, senior officials from the Cayman Islands Government (CIG) once again avoided addressing how and when the government plans to account for its liability for the future healthcare needs of retired civil servants. Currently, this CI$2.2B liability is only included in supporting notes that form part of the annual Entire Public Sector accounts, not on the balance sheet. Including this liability on the balance sheet would eliminate all of CIG's assets, potentially leading to a loss of financial control to the UK. 🏦

Deputy Governor Franz Manderson, Financial Secretary Kenneth Jefferson, and Accountant General Matthew Tibbetts all acknowledged that the unaccounted liability is one of the main reasons why the government’s consolidated accounts continue to receive adverse opinions from the Office of the Auditor General. While the public finance legislation now requires this liability to be included on the balance sheet, officials have found it challenging to do so. Despite questions from PAC members about how this issue would be resolved, no clear answers were provided. 📚

Jefferson explained that while details of the liability are disclosed in the notes accompanying the government’s financial reports, including it on the balance sheet presents significant problems. Placing the CI$2.2B liability on the balance sheet would reduce the government's assets, which total about CI$2B, to zero. This could breach a major ratio in the Framework for Fiscal Responsibility, as the CIG's liabilities must be less than its assets. The issue is a significant public interest matter, as the public does not currently have a reliable assessment of the CIG's books due to the continued adverse opinion. 📉