s.14Responsible financial management
14
Section 14Part 3 — Cabinet - Powers and Duties of the Cabinet

Responsible financial management

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The Cabinet shall manage the financial performance and financial position of the core government in accordance with the principles set out in this section.
The policies and decisions of the Cabinet shall be consistent with the principles of responsible financial management set out in subsection (3), and the impact of those decisions on the core government's financial performance and position shall be measured using accrual accounting.
The principles of responsible financial management referred to in subsection (2) are —
total core government revenue less total core government expenses (measured using generally accepted accounting practice) should be positive;
total core government assets less total core government liabilities (measured using generally accepted accounting practice) should be positive;
borrowing should not exceed an amount for which the sum of interest, other debt servicing expenses and principal repayments (except for repayments of principal that, under relevant borrowing agreements, were not legally required to be made) for a financial year are more than ten per cent of core government revenue (calculated using generally accepted accounting practice) for that financial year, where, for the purposes of this principle, borrowing is defined as all borrowing that is in the name of the Government regardless of whether it is serviced directly by the core government, a statutory authority or government company;
net debt should be no more than eighty per cent of core government revenue, where, for the purposes of this principle, net debt is defined as —
core government borrowing less core government liquid assets;
borrowing that is serviced directly by a statutory authority or government company but is in the name of the Government; and
the percentage of statutory authority and government company debt guaranteed by the Government that regulations made under this Act specify is to be included in the net debt calculation;
cash reserves should be maintained at a level no less than the estimated executive expenses (measured using generally accepted accounting practice) for the following ninety days, where, for the purposes of this principle, cash reserves are defined as core government cash and cash equivalents, marketable securities and deposits, and other liquid assets, including any amounts held for restricted funds and reserves purposes; and
the financial risks, including contingent liabilities, facing the core government should be managed prudently so as to minimise the likelihood of any such risk resulting in an expense or liability.
Cabinet decisions may depart from the principles of responsible financial management for a limited period if the Cabinet specifies in a paper laid before the Cayman Islands Parliament for its information (which may be included in a relevant document required by this Act) —
the reasons for the departure;
the approach that the Cabinet intends to take in order to return to those principles; and
the period of time that the Cabinet expects to take to return to those principles.

Defined Terms

responsible financial managementcore governmentaccrual accountingborrowingnet debtcash reserves

Referenced By