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Public Finance Manual of the Cayman Islands: Part II - Government Finance

Overview

The Public Finance Manual of the Cayman Islands provides guidelines for responsible fiscal management within the government. This part focuses on government finance, including fiscal management, financial reporting, and debt calculation.

Fiscal Management

  • Prudent Financial Management: The Cabinet is responsible for ensuring that expenditures are funded from current revenue or through borrowing.
  • Prioritization of Expenditures: Budgets should be prepared with clear priorities, taking into account the financial implications of each expenditure.

Budgeting and Expenditure Control

  • Preparing a Budget: The process involves:
    • Identifying priorities
    • Developing a budget plan
    • Approving the budget by the Legislative Assembly
  • Expenditure Control: Measures should be put in place to ensure that expenditures are controlled and managed effectively.

Fiscal Management Framework

The fiscal management framework consists of policies on:

  • Revenue Forecasting
  • Expenditure Control
  • Debt Management
  • Asset Management
  • Financial Reporting

Financial Reporting

  • Comprehensive Annual Report: A comprehensive annual report should be prepared, covering both the financial transactions of the Government and those of entities within its control or under its supervision.
  • Financial Statements: Requirements for financial statements include:

Capital Projects Appraisal

  • Review by Public Sector Investment Committee (PSIC): All capital projects exceeding $300,000 must be submitted for review by the PSIC to ensure prudent project appraisal.

Core Government Net Debt Calculation

Guidelines are provided on how to calculate core government net debt, including:

  • Statutory Authority and Government Company Debt
  • Weightings based on Financial Stability and Predictability of Budgetary Support

Conclusion

The Public Finance Manual of the Cayman Islands serves as a guideline for responsible fiscal management within the government. It ensures transparency, accountability, and prudent use of public funds.