Cayman Puts Its Systems On Display

by Leroy Baker, Tax-News.com, New York

27 May 2005

A Cayman Islands Government team is this week putting its financial management and reporting system on show to more than 30 senior finance managers from 20 Caribbean countries.

In George Town, Grand Cayman, this week, the Cayman Islands Government’s financial systems are on study at a Caribbean Regional Technical Assistance Centre (CARTAC) workshop.

The three-day event, co-hosted by Cayman’s Portfolio of Finance & Economics and CARTAC, in association with the Caribbean Public Finance Association (CaPFA), is also focusing on the Cayman Islands’ experiences in the area of financial reform; an initiative that Cayman began more two years ago.

“One of the key aims of the workshop is to share Cayman’s reform experience with participants as part of promoting further understanding about the need for, and implications of, financial management reform in the region,” said Mr Peter Gough, Deputy Financial Secretary (Financial Management), Cayman Islands Government, noting that all workshop presenters will be representatives from various areas of Cayman’s civil service. “We want the rest of the Caribbean to know and understand what worked for us, what benefits can be realised and what resources are necessary to undertake such an initiative.”

The workshop allows participants, some of whom are already involved in similar fiscal reform programmes, to appreciate the implications and applicability of Cayman’s approach to their country’s situation. Consistent with previous CARTAC/CaPFA workshops, emphasis is being placed on all participants having the opportunity to share experiences and enhance working relationships among public finance managers throughout the Caribbean.

“From our broad perspective, the effective management of public finances can have many far-reaching benefits in addition to the general fiscal health of government, which is an obvious one,” said Mr Gough. “Areas such as direct foreign investment, infrastructure projects and increased social services can all be tied to strong financial management – it is a tenet of good governance.”

Cayman’s reform involved the introduction of comprehensive “output” budgeting. That is, budgeting focused on what is actually produced, while getting the best value for every dollar of public funds expended. It also involved moving to full accrual accounting to align government more closely with commercial accounting practice, which is both more effective and provides a better understanding of how government assets are utilized.

Among the significant changes require to implement these reforms were new legislation, such as the Public Management and Finance Act, with “Fiscal Responsibility” provisions, and upgrades to infrastructure, including a new technology platform called the integrated financial management system (IRIS).

The Cayman Islands is also sharing its experiences from a broad management perspective as to how the need for fiscal reform came about. In Cayman’s case, it was a collective process involving active commitment from political leaders and civil servants, as well as members of the community. It also involved a study of “best practices” from governments around the world to glean lessons learned and develop an approach unique to the needs of the Cayman Islands.

“While much progress has been made, there’s still work to do to realise our full vision,” said Mr Gough, referring to the next phase of reform involving personnel and public authorities, which will begin shortly.

Conference participants are senior civil servants holding key public finance management positions from such countries as Anguilla, Antigua & Barbuda, Bahamas, Barbados, Belize, Dominica, Dominican Republic, Grenada, Grenadines, Guyana, Haiti, Jamaica, Montserrat, St. Kitts & Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, Turks & Caicos Islands, British Virgin Islands, and Trinidad & Tobago.

Based in Barbados, the Caribbean Regional Technical Assistance Centre was established in 2001 with a mission to enhance the institutional and human resource capacities of countries in the Caribbean region to achieve their macroeconomic, fiscal and monetary policy objectives. It is funded by a number of organisations including the Canadian International Development Agency (CIDA), the UK Department for International Development (DFID), the U.S. Agency for International Development (USAID), the World Bank, the European Union, the International Monetary Fund (IMF), the Caribbean Development Bank and the 20 countries of CARICOM. CARTAC provides “on demand” technical assistance to the governments of member countries in the areas of public finance management, fiscal planning, taxation administration, financial sector matters (banks, credit unions, insurance and securities) supervision, and government financial statistics.

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