PHILIPSBURG--As in previous reports on the financial statements of government, the General Audit Chamber has once again concluded that the annual report of the Minister of Finance "provides insufficient information to Parliament" about the effectiveness of public expenditures.

 

"On the basis of our audit of the policy information we conclude that the Minister of Finance does not inform Parliament sufficiently regarding the effective use of public funds," the chamber wrote in its latest report, which was sent to Parliament on Wednesday.

 

The finance minister "can do a better job" informing Parliament about the effective use of subsidies by requiring the relevant recipient institutions to report regarding their activities, expenditure, results and outcome.

 

"The ministers hardly, if ever, review whether the subsidies granted occur in accordance with the General Subsidy Ordinance," the chamber said.

The Audit Chamber deems the 2013 Financial Statements of St. Maarten as not meeting the requirements and standards as required by the National Financial Accounting Ordinance (NGAO) and is of the opinion that the Government Accountants Bureau SOAB is "justified" in issuing a negative opinion of the 2013 Financial Statements.

 

The chamber has requested the finance minister to provide a realistic plan within six months with which to ensure that the deficiencies identified in terms of the financial management are resolved within a few years. The minister in his formal response to the chamber has agreed, albeit with three considerations, to produce such a report.

 

As part of the audit of the 2013 Financial Statements, the chamber reviewed the issuance of subsidies in terms of compliance with legal requirements. "We found that ministers hardly, if ever, check, whether the granting of subsidies occurs in accordance with the General Subsidy regulation."

 

The chamber said, "It is our opinion, that ministers should adequately inform Parliament about the effective use of subsidies to recipients by requiring the institutions to periodically provide reports on their respective activities, costs, achievements and results."

 

An example of missing information is St. Maarten Postal Services N.V. (SMPS) receiving NAf 2 million which is accounted for as a long-term receivable. However, there was no loan agreement with SMPS and government. The National Decree is "absent, this is considered not in compliance with the law, i.e. unlawful."

 

Further, the balance sheet item "cash and cash equivalent" in the financial statements, includes cash in the amount of NAf 239,000. Of this amount, NAf 220,000 relates to monies of the Crime Fund. The chamber has determined that this is not related to cash on hand, but payments from the bank account of the Crime Fund.

 

The legitimate use of these funds "could not be substantiated" with payment requests, delivery receipts, invoices and the like. This means there is a risk that expenditures for an amount of ANG 220,000 were "unlawful."

 

The chamber recommended that the lawfulness of the spending (compliance) be investigated.

 

The Audit Chamber issued its report to Parliament on the 2013 Financial Statements on Wednesday. The NGAO requires that the chamber publish a report on its findings within a period of one and a half months after receipt of the copy of the report from the auditor SOAB.

 

As part of the audit, the chamber evaluated whether the information contained in the financial statements about the finances and policy at the ministries was conducted in compliance with regulations and whether the financial statements are a fair and accurate reflection of such.

 

In its report on the 2011 and 2012 Financial Statements, the chamber pointed out that government needed to comply with the legally stipulated time frames for submission. In the case of the financial statements, these should be drafted no later than September 1 following the year to which they relate. Government has complied for the 2013 Financial Statements.

In its reporting on the 2012 Financial Statements, the chamber indicated that there were a number of items in the financial statements that it found objectionable. It further stated that if improvement was not noted, the chamber would consider issuing a formal objection in accordance with its legal authority. Based on the audit of the 2013 Financial Statements, the chamber concluded that six of the 10 items listed as objectionable were partially solved. As such, a slight improvement is evident over the previous year.

 

"Most errors and uncertainties -­ in our opinion -­ are easy to correct. As such, it is reasonable to expect the financial statements to be drafted free of errors and uncertainties within a reasonable period of time. We have made recommendations to the Minister of Finance in this regard," the chamber said.

 

The report on the 2013 Financial Statements of St. Maarten is available in English and Dutch on the website of the General Audit Chamber –

www.arsxm.org .

 

The Daily Herald