Lack of information CFT's main concern

September 26, 2011 7:53 AM

An important shortcoming in the financial policies of the Curaçao and St. Maarten governments is that necessary figures and other data either are not provided or are provided too late, according to the Committee for Financial Supervision CFT.

This appears from CFT's report on the period June 2010 up to and including March 2011.

The Kingdom Council of Ministers, which discussed the report on 9 September, has not announced any policy changes regarding the document. The remarks from CFT are in agreement with criticism on the budget of Curaçao for 2012 that was mentioned in Parliament recently.

In the period on which CFT reported it assessed the annual accounts for 2009 of the then-Netherlands Antilles and the Island Territories Curaçao and St. Maarten, as well as the budgets of Curaçao and St. Maarten for 2010 and 2011. CFT wrote that the necessary audits for the annual accounts 2009 were missing and that the long-term figures presented with the budgets for 2010 were only rough estimates.

"These often only regard an extrapolation (with a certain growth percentage) of the figures of the next budgetary year. With that, demographic trends, for example, which could greatly influence the expenditures of public health and education, are insufficiently reflected in the long-term figures."
CFT also thinks Curaçao lets too much depend on incidental windfalls, instead of a structural policy to keep the expenditures within the limits, while in St. Maarten expenditures can only be made after the approval of the Minister of Finance, whether they have been budgeted or not. CFT fears invoices could therefore be set aside that, according to the budget, need to be paid.

Regarding the budget for 2011, CFT wrote that the interim budget of Curaçao had been approved with the reservation that all information from the collective sector also would be made available. However, CFT is still waiting for a final budget that is based on the MFK/PS/MAN governing programme.

The council further elaborated on the problems with St. Maarten's budget for 2011, which finally was approved on April 13, 2011, after much discussion. CFT subsequently advised to offer St. Maarten additional assistance.

"The current organisation is hard put to keeps things running and hasn't gotten around to those necessary improvements. In the past, technical assistance from the Netherlands too often, perhaps out of necessity, changed to extra hands to keep things running and few structural improvements were achieved. We must make sure this does not happen."

Regarding the budgets of Curaçao and St. Maarten, CFT cannot assess whether they comply with the interest burden standard, because the audit from the Foundation Government Accountant Bureau SOAB was not completed yet.

In conclusion, CFT mentioned that there were applicable rules for corporate governance in both countries. The dismissal of all board members at government-owned companies in Curaçao had kicked up dust, the council wrote, but it was positive that new candidates were tested by the SOAB even though a clear profile for the functions was missing in some cases.

As the Corporate Governance Council of St. Maarten encountered many starting-up problems, it remains to be seen whether it will become a good advisory entity, added CFT.

26 September 2011