Cft remains concerned about Curaçao and St. Maarten

POSTED: 05/22/11 4:46 PM

“There is some progress”

St. Maarten – The Board of Financial Supervision (Cft) remains concerned about the way the governments of St. Maarten and Curacao are performing on fiscal matters. They stated this in a release issued Friday at the conclusion of their visit to all of the islands in the Caribbean part of the Kingdom.

“All entities are showing progress. Most of the 2009 financial statements and the 2008 and 2009 financial statements of the government companies have been submitted to the Cft. The communication with the various financial institutes and authorities is also satisfactory. However, the Board frowns on some aspects of the public finances of mainly Curaçao and St. Maarten,” the Cft stated in a release.

St. Maarten
The Board met Finance Minister Hiro Shigemoto, Prime Minister Sarah Wescot-Williams, the Council of Ministers and Members of Parliament during their two day trip here. The main subject was the budgetary process for the 2011 budget. The process has “progressed only with great difficulty and has not finished yet considering that the budget still needs to be adopted by the Parliament.”

“Parties have decided to work on an agreement on systematic planning and communication so the budgetary process will lead to a timely adoption of a 2012 budget that complies with the requirements in the Kingdom Act. Although the communication between the Cft and the official authorities can already be qualified as good, it has been agreed to work on its further improvement,” the Board wrote in their statement.

They added, “The Board is concerned about the delay in timely submittal of information on the budget’s execution. This is primarily necessary to allow for well-timed adjustment. The backlog in the execution reports has been caused by the complexity of the matter and the dismantling of the Netherlands Antilles on October 10th, last year. St. Maarten has indicated to continue striving to comply with the deadlines in the Kingdom Act.”

The Cft also confirmed Friday it has received a great deal of the requested financial statements over 2008 and 2009 of the government companies and that the government is ensuring that the Corporate Governance Council will soon have enough financial means to execute its tasks.

Curacao

The supplementary budget 2011 of Curaçao shows a modest surplus. The Cft considers this therefore the right moment to realize necessary changes, especially in those areas where substantial cost increases may be expected in the future. One such area is healthcare.

“It is clear that Curaçao is working on various aspects, but the actual implementation of those measures is still pending. Other measures that were already taken, such as the casino tax, have been adapted repeatedly. The board would like for the proposed measures to be executed consistently. In this regard it is positive that the Cft and Curaçao have agreed to cooperate closely when producing the 2012 budget,” the Board wrote in its statement.

They also said, “Furthermore Curaçao seems to acknowledge the importance of good insight in the financial position of the government companies and their possible implications on the financial position of the country. Meanwhile the financial statements of several government companies have been submitted and the recent appointment of the members of the Supervisory Boards was based on the Corporate Governance Code.”

They further stated, “The Board regrets the fact that there was no opportunity to meet neither the Council of Ministers nor with the Parliament of Curaçao. The Board considers these meetings very valuable and useful since this way the respective parties can all be informed on the progress of the strengthening of the public finances and the vision of the Board on this matter. The Board therefore has expressed the hope that during the next visit there will be an opportunity to meet with all parties involved.”

Two Countries

Discussions were held with both Curaçao and St. Maarten on the five-year plan for the improvement of the financial management, and both countries have confirmed that the survey on the interest burden norm is almost completed.

Public Entities

For the Public Entities Bonaire, Sint Eustatius and Saba this was the first visit of the Board in 2011. The Board met with the Executive Councils, the Island Councils and employees of the Finance departments. The Cft observes that the Public Entities are actually taking the necessary steps to achieve sound public finances; the preparation of the 2011 budgets was done correctly and for the first time the budgets all balanced out. The 2011 budgets have become considerably smaller, since a substantial part of the previous tasks of the island territories has been transferred to the Netherlands as a consequence of the reforms as per October 10th, 2010.

Execution

With regard to the execution of the budget, the Public Entities were not able to submit reliable information, since they are faced with lack of capacity. The second execution report is expected to offer more reliable information about the financial situation of each Public Entity.

“The entities have fully picked up on the backlog in the financial statements in a short period of time; which is an enormous performance. These financial statements still have to receive a positive declaration of the financial control, and that is a very important point for consideration. There are still some other aspects that require attention, since they hamper a structured budget process,” the Cft stated in their release.

More than 25 million of the payments in arrears, which have developed in the recent years, are now settled. This settlement has become possible based on advices of the Cft to the Minister of Internal Affairs and Kingdom Relations. The last part of this settlement will be paid in the next month, which will improve the debt position for the Public Entities.

On St. Eustatius and Saba the Corporate Governance Code has not been implemented yet. On Bonaire the Corporate Governance Code has been published, but the articles of association of all government companies still need to be adapted. At the beginning of this year, the Preceding Supervision on personnel which is applicable on Bonaire was transferred from the Cft to the Representative of the National Government, based on the Law on public entities BES. Upon request, Bonaire accepted for the Board to continue for this year to execute Preceding Supervision with regard to subsidies and transfers.

Two Boards

Since the dismantling of the Netherlands Antilles there are two Boards of Financial supervision: the Cft Curaçao and St Maarten and the Cft BES. The members of the Cft Curaçao and St. Maarten are Hans Weitenberg (President), Margo Vliegenthart (upon proposal of the Netherlands) and Alberto (Chos) Romero (upon proposal of Curaçao). St. Maarten’s member has not been approved as yet. For the Cft BES Weitenberg and Vliegenthart have the same functions as for the Cft Curaçao and St. Maarten. The third member of the Cft BES is Max Pandt, upon proposal of the Public Entities Bonaire, St. Eustatius and Saba.

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