Budget weaknesses outlined in bid documents
Cayman Islands
(CNS): Significant shortcomings in the way government currently reports and manages its now one billion dollar per year budget have been outlined in documents prepared by the finance ministry as it looks for consultants to help modernise the process. The current budget process is failing both the Cayman Islands Government and the people, and does not provide clear links between outputs and outcomes. It also produces long and inconsistent documents that are hard to understand and labour intensive but do not clearly show whether or not the government is making progress with its goals.
The ministry has opened a bid for consultants to supply an outline business case to justify the overhaul and modernisation of both the budget framework and the reporting process. The goal is to shift the focus to the outcomes so that they are clearly defined and monitored in the budget documents, which should be concise and easy to understand.
In the procurement documents supporting the bid, officials point out that at present the outputs are reported in government documents, such as how many meetings a government department may have had on a specific issue, without any indication of what was achieved.
“The links between the Strategic Policy Statement and outcomes desired by the Government and outputs included in the budget statements are unclear and disjointed,” officials stated in the documents as they explained the challenges. “It is important that money and other resources are directed towards achieving the government’s strategic priorities and outcomes, and that appropriate measures are put in place to demonstrate the progress towards achieving these.”
Another major problem is that the budget documents are long, inconsistent, not user-friendly and do not provide basic information for budget scrutiny and decision making. The budget information is laid down on 3,500 pages across five documents, which provide detailed information on the quantity, quality, timeliness and cost of all of the services delivered by the 46 ministries, portfolios, offices, statutory authorities and government companies.
But this volume of information “does not necessarily aid decision-makers and users in understanding the budget documents”, officials said in the documents. They also note that some of the information required by law “does not add significant value for budget users and decision-makers”.
“The budget documents need to be useful to decision-makers and users and include basic information that helps them to understand the budget amount requested and what it is intended to be used for.”
The preparation process is also complex and cumbersome. The Excel costing templates are not linked and the same information has to be manually entered into spreadsheets and documents, creating a labour-intensive process that is fragmented and prone to duplication of efforts and errors.
According to the documents, government also wants to harness technology to enable a streamlined and efficient budget preparation process.
During this first phase government is looking for consultants to prepare a business case that assesses the gaps within the existing budgeting and reporting framework and recommends the best-fit outcome-based budgeting and reporting framework. This bid closes on 5 August, and the consultants are expected to deliver the business case by March next year. After that the CIG will open bids on the next phase to find a consultant to implement the best solution.
Government is anticipating that getting to a modernised process will take several years and will be fully rolled out by the end of 2025.
In February 2015, a Public Management and Finance Law Review Committee report found that government needed to reform budgeting and reporting to allow the actual budget to line up with its goals and enable it to measure success, showing decision-makers what the money spent by the government actually achieved. It also suggested that the budget should be much shorter and simplified.
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