WILLEMSTAD - Curaçao must take into account a higher deficit from the past after deduction of the so-called Kingdom Tax Regulation BRK allocation reserve. 

If this deficit is not compensated sufficiently, the Committee Financial Supervision CFT could advise the Kingdom Council of Ministers to give a new budgetary instruction.

 

CFT wrote this in an advice to Minister of Finance José Jardim regarding the annual accounts of 2010. As an exception, the committee had earlier approved the compensation of the deficits on the revenue account by using the BRK reserve.

 

CFT had agreed to await the reports from government accountant SOAB and the General Audit Chamber on the 2010 annual accounts. Both recently rejected these annual accounts of the abridged fiscal year 2010 (from when the constitutional changes went into effect on October 10 to December 31).

 

According to CFT, the Audit Chamber mentioned that the allocation reserve of the BRK monies amounts to NAf. 162 million and not NAf. 217 million as Curaçao indicated in the past.

 

Curaçao is to reckon with covering the difference of NAf. 55 million (including the mutations in the reserve since then due to currency fluctuations or withdrawals) in a next budgetary adjustment. That way, this part of the original instruction will be fulfilled, the letter to Jardim read. The deficit can be compensated multi-annually until the end of 2015.

According to the Consensus Kingdom Law Financial Supervision, when presenting the determined annual accounts, government is to indicate how the deficit will be compensated. CFT will then advise on such.

 

The committee will evaluate the measures taken to do so against the norms of the Kingdom Law. "Article 18.8 stipulates that with insufficient compensation, the Kingdom Council of Ministers could give an instruction."

 

The letter also stated that the process to determine the 2010 annual accounts was delayed considerably. "CFT took note of the draft 2010 annual accounts from country Curaçao on the period October 10 to December 31, 2010, for the first time on December 22, 2011.

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The statutory term to submit the annual accounts is August 31 of the year following the year under review. "Exceeding this period by four months was understandable and acceptable at the time given the problems on the starting balance of the new country and the simultaneous drawing up of the three annual accounts. However, it is not acceptable that the statutory term for their auditing was not observed."

 

The reporting period for both SOAB and the Audit Chamber is six weeks so the annual accounts can be determined by Parliament before the end of the year.

 

"SOAB presented its reports on May 8, 2013, which implies that the statutory term was exceeded by 15 months. More than once, CFT pointed out to you the need to observe the statutory periods, most recently in a letter dated January 21 of this year."

 

The Audit Chamber last informed the Chairman of Parliament in a memo dated January 31. Also, Transparency International (TI) expressed its concern about Curaçao in its recent report that annual accounts and accountability documents are either not made available or have considerably delays.

 

"CFT wishes to emphasise once again a timely accountability and transparency, reminding you of Curaçao's goal to show a considerable improvement of the financial management in 2015," the letter concluded.

 

CFT hopes that the 2011 annual accounts will follow soon and government will observe the statutory period regarding the annual account of 2012.