St. Maarten and Curacao’s budgets lack strong data correlations

POSTED: 09/26/11 7:09 PM

THE HAGUE – The Board of Financial Supervision (Cft) have called the late or non-submission of data a major weakness in the financial policy of the Government of St. Maarten and the Government of Curacao. The remark is part of a report covering June 2010 to March 2011 that was discussed in Kingdom Council of Ministers on September 9. The Kingdom government has not taken any policy actions based on the report.

This latest report gives detailed comments on the 2009 financial statements of the Government of the Netherlands Antilles, the Island Territory of St. Maarten and the Island Territory of Curacao. The Cft states that the 2009 annual accounts were delivered without being audited.

Budgets

It also gives detailed comments on the 2010 and 2011 budgets for Curacao and St. Maarten. Another major comment out of that review is that the budgets for 2010 were rough estimates and lacked multi-annual projections.

“These are often no more than an extrapolation (with a certain growth rate) of the figures of the coming year. Things like demographic trends, which have a major influence on spending on health and education, are inadequately reflected in the multi-year figures,” the report states.

The Cft also expresses concern that expenses can be approved by the Minister of Finance in St. Maarten after the budget is approved, whether they are budgeted or not. They also express concern that Curacao still relies heavily on windfalls instead of finding structural policies to contain expenditure.

The Cft has also maintained its line that St. Maarten needs additional help with its budget process and used the problems with the 2011 budget, which finally got a positive advice on April 13, 2011, as an example of the troubles.

“The present organization has its hands full to keep the business going and is inadequate to make the necessary improvements. In the past, there was too much technical assistance from the Netherlands, perhaps of necessity, but that has led to little structural improvement. This situation must be monitored,” the Cft report states.

Curacao’s 2011 budget got a positive assessment and the Cft was still waiting for final budget based on the governing program when the report was compiled.

The Cft was unable to state definitively that the two countries met the interesting bearing norm for lending in their 2011 budgets because the review of the collective sector by the Foundation Government Accountancy Bureau has not been completed.

Corporate Governance

The Cft has also said “it remains to be seen” whether St. Maarten’s Corporate Governance Council is a good advisory body because it has had “many teething problems.” The Cft also points out that while the sacking of all board members from the government owned companies in Curacao had created a stir and clear profiles were not provided for the new members, they are happy to see that the new board members were vetted by the SOAB.

 

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