CFT again concludes that Saba finances are in order

The Com­mittee for Financial Super­vision CFT concluded in its half-year report that the finances of the public entity Saba are, once more, in or­der. The very limited finan­cial leeway is a challenge for Saba.

The CFT report cover­ing July to December 2019 was completed in February 2020 and sent to the Sec­ond Chamber of the Dutch Parliament by State Secre­tary of Home Affairs and Kingdom Relations Ray­mond Knops this week.

The report focuses on Bo­naire and Saba, as St. Eu­statius has been exempted from financial supervision since the Dutch govern­ment in February 2018 im­posed higher supervision on the public entity for gross negligence. The CFT does remain involved in Statia’s financial develop­ments.

Saba scored well in all aspects. Financial reports, budgets and annual ac­counts were all delivered on time in 2019. The 2018 annual account received a certified accountant’s dec­laration for both accuracy and legitimacy, for the fifth time in a row.

The 2018 annual account showed a surplus of US $0.8 million. In 2018, Saba was careful with the execution of projects for which the Netherlands provided sub­sidies later on in the year. The execution of these projects, including the So­lar Park at the airport, was continued in 2019.

According to the CFT, the 2019 budget was balanced at $23 million. The third execution report showed $19.3 million in revenues (including the free remit­tance, special allowances, subsidies and taxes) and $17.5 million in expendi­tures, which means that there was a positive balance of $1.8 million.

The 2020 draft budget was submitted and approved on time, before the end of 2019. The 2020 budget is balanced and shows a rev­enue and expenditure level of $12.4 million. The CFT acknowledged that it was a challenge for the public en­tity Saba to balance its bud­get. The higher structural cost without an increased free allowance makes its fi­nancial manoeuvring room extremely tight.

As a result, Saba had to decrease certain budgetary items such as “unforeseen”, which was lowered from $100,000 in 2019 to $22,000 in 2020. The CFT has ad­vised the public entity to allocate a possible surplus of 2019 to the 2020 budget.

“Saba has indicated that the increase of struc­tural tasks, which are not matched by higher structur­al means, can create risks for future budget years. Saba has indicated that to­gether with the Ministry of Home Affairs and King­dom Relations BZK, it will seek measures to mitigate risks regarding the sustain-ability of the budget,” the CFT stated.

The CFT concluded that Saba’s financial manage­ment is in order, as it has been for a number of years already. The certified ac­countant’s report for five years in a row says it all. Together with the accoun­tant, Saba is executing a number of projects to bring financial management to a higher level.

The financial management projects include the draft­ing of new procedures and directives, the describing of responsibilities and the actualisation of the existing internal control plan. Also, Saba is busy implementing a number of the accoun­tant’s recommendations.

Saba’s liquidity position in the second half of 2019 in­creased by about $15.3 mil­lion to $40.4 million. Based on the overviews presented by Saba, about $37.5 mil­lion is earmarked as special allowances and $0.7 million as free remittance. This results in a balance of $2.2 million in means that can be freely spent.

Bonaire, on the other hand, had initial issues with the 2020 budget, and the CFT concluded in August 2019 that the draft 2020 budget did not sufficient comply with the financial supervision laws. Bonaire had to make some adapta­tions and clarifications, af­ter which the 2020 budget received approval.

The CFT also found that Bonaire had made too little progress in the second half of 2019 where it concerned financial management. Bo­naire does not have certi­fied accountant’s declara­tions of its annual accounts. The CFT advised having the accountant carry out in­terim controls several times per year during 2020 to as­sess the financial manage­ment.

The Daily Herald.