Major Capital Projects - Follow Up Report

“A follow-up audit of the Government’s approach to governance and management of major capital projects found that project management has significantly improved” says Sue Winspear, Auditor General of the Cayman Islands, of a report issued by her Office today.

“However, there remains much to be done to develop an overarching capital investment strategy and to improve the budgeting and financial frameworks to ensure that major capital projects are adequately funded and value for money is achieved” Ms Winspear continues.

The report, “Major Capital Projects – Follow Up”, measured Government’s progress in addressing the issues raised in the 2012 and 2015 Office of the Auditor General reports on major capital projects.

“The Government and public sector are investing significantly in major capital projects to support economic growth and improve public services. The construction cost of projects is around $500 million over the next five years,” she stated. “It is important that all of these projects are well managed to ensure that value for money is achieved from the investment.”

Positive highlights include the establishment of a Major Projects Office, as a centre of expertise staffed with professional and experienced project managers and the development of a consistent good practice approach to project management. “These developments are making a positive impact.” the Auditor General explained.

At the same time, the Auditor General’s report calls for a long-term capital investment plan, with clear links to an updated National Development Plan and other long-term strategies and policies, to provide an overarching strategy for public sector investment.

“A long-term capital investment plan is needed that enables capital investment decisions to be made with full information on all major capital projects, including their affordability and the capacity of Government and industry to deliver them” the Auditor General states.

The report also states that that limited progress has been made in improving the budgeting process for capital projects and in reporting progress on major capital projects to the Legislative Assembly.

“We concluded that the budgetary framework and approval process for capital projects are not aligned. This presents risks to the use of funds and project timescales.” Ms. Winspear added “Government is also entering in to public private partnership contracts for this first time. These will result in payments to private sector providers of between $280 million and $310 million for 20 to 25 years after the two projects are completed. It is important that these long-term financial commitments are built into future budgets.

More information about these reports can be obtained by contacting Sue Winspear at (345) 244-3201 or Angela Cullen, Director of Performance Audit and report author, at (345) 244-3220.

1. The audit followed-up progress with the Office of the Auditor General reports “Management of Major Capital Projects” (June 2012) and “Major Capital Projects – Building Schools” (May 2015).
2. The follow-up audit included a high-level review of project documents for the following seven major capital projects, all of which were at different stages:
   1. John Gray High School - Phase 2 – Gymnasium; and Phase 3-5 – Completion of Campus
   2. Owen Roberts International Airport (ORIA) Terminal Redevelopment
   3. Cruise Berthing Facility
   4. Integrated Solid Waste Management System (ISWMS)
   5. Long-Term Residential Mental Health facility
   6. New George Town police station
   7. New court facility