Today’s Opinion: The theatre of financial horrors

POSTED: 03/18/11 2:03 PM

St. Maarten will have to stand on its own legs and develop on its own strength. Courageous words from our Council of Ministers, and probably accurate as well, because it does not look like anyone in the Kingdom is ready to come to the rescue.

How weird is that? Until recently, country status was heralded as the next best thing and those darn politicians in the Netherlands maintained that the new countries would get a healthy financial starting position.

But the expression healthy financial starting position got lost in the process and the debt relief program turned out to be an empty promise. Well – that’s maybe not entirely accurate. For the moment let it suffice to say that the debt relief program did not bring St. Maarten any relief. Otherwise balancing the 2011 budget would have been a walk in the park instead of a never-ending journey through the theatre of financial horrors.

It is almost comical how the Council of Ministers attempts to sell the financial supervisor the idea that the technical assistants that hovered over St. Maarten’s financial affairs between 1993 and 2003 had the opposite effect of the desired result.

If we did not know any better we would be tempted to conclude from this sentence that achieving the opposite of the desired result was all the fault of those ”so-called technical assistants.”

But what happened in reality?

Let’s flash back to July 9th, 1992, when the Kingdom government, bases on the report by the Pourier committee, placed St. Maarten under higher supervision – a situation that would end three years later, on July 1, 1995.

The Kingdom Council of Ministers concluded at the time, based on a report by the General Audit Chamber, that the St. Maarten’s civil service was in a state of neglect and that special measures were called for, for supervision and control to restore good governance.

Higher supervision meant that the government had to submit all acts of legislation and governance for prior approval to the Governor.  All decisions costing more than 25,000 guilders (a bit less than $14,000) fell under this rule on the condition that sufficient funds were available. If the money wasn’t there, the government could not take the decision at all.

The General Audit Chamber, after poring over the annual accounts for the years 1994-1996 came to this astonishing conclusion: higher supervision hardly changed anything with regard to the many shortcomings the Chamber had brought to the attention of the Kingdom Council of Ministers in its reports, and that were the reason for the Kingdom government to place the island under higher supervision in the first place.

To start with a minor infringement from 1994: that year the government paid out 306,000 guilders in Christmas bonuses to civil servants. There was no post in the budget for these payments.

While the 1994 budget still showed a surplus of a bit more than 2 million guilders, the following two years ended with deficits of 5.2 and 3.1 million. The Island Council obviously was rubberstamping all government actions during those years. That explains this remark by the auditors: The budget overruns in 1994-1996 were never approved by the Island Council.” Needless to say that this violated the rules of good governance

The financial administration of the island territory was a mess in those years – there is no other word to describe the situation. The auditors found that there was no decent record of contractual obligations for, for instance, leasing school buses and heavy equipment, for garbage collection or for the execution of other public works. The relationship with foundations and government-owned companies was unclear, partly due to inadequate subsidy-legislation. There were also no established rules for issuing PP-cards (for free medical care), for the payment of welfare benefits and for working overtime. There was, the auditors noted no human resources policy. The authors of the report have to remain neutral, but in these observations their restrained amazement is oozing from the page.

Many decisions were not, as was required under the rules for higher supervision, submitted for prior approval to the Governor. These decisions had to do with hiring personnel, with the payment of overtime and with two subjects popular among politicians when elections are around the corner: study financing and the issuing of PP-cards.

The auditors also raised their eyebrows (or so we imagine) when they gained some insight in the state of affairs at government owned companies.

At TelEm for instance, the place share capital of 20,000 guilders appeared to be in the hands of two private citizens. The annual account of 1995 shows suddenly a share capital of 2 million guilders, but there is no record anywhere that documents this increase. The TelEm administration was a mess as well, because the external accountant refused to approve the annual accounts for the years 1994-1996.

The list goes on and on – from 25,000 guilders the island paid for hotel accommodation for family members of a former commissioner to a thieving civil servant at the island’s salary-administration.

That last case is a story in itself. In November 1995, the island territory paid almost 7,400 guilders to a temp worker, about ten times as much as was normal at the time, the audit chamber report states.

An employee at the salary administration cashed this amount at a local bank and made an unauthorized payment of 1,500 guilders to the temp worker. What happened to the rest of the money is left to the reader’s imagination. The same employee cashed pension payments for two people about whom the department for personnel affairs had no information whatsoever.

It’s true, we published part of these observations on our opinion page in December of last year. But it is necessary to bring that history back into focus, now that the current Council of Ministers seems to be of the opinion that the Dutch technical assistants in the nineties messed things up.

It seems that our politicians have a hard time to get to grips with the reality and with the obvious shortcomings of our own society. Of course, St. Maarten is not the only place where stuff goes wrong on this level. But our government seems to be extremely stubborn and persistent in its efforts to put the blame at somebody else’s doorstep.

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