CFT praises Saba, Statia gets extra time for annual account

THE HAGUE–The Committee for Financial Supervision CFT has commended the Saba Government for accomplishing a sound 2016 annual financial statement in a timely manner. The CFT has advised granting an extension to the St. Eustatius Government which has yet to present its 2016 annual account.

In a recent letter to Dutch caretaker Minister of Home Affairs and Kingdom Relations Ronald Plasterk, new CFT Chairman Raymond Gradus advised to grant an extension to submit the 2016 annual account until October 31, 2017.

“Considering the current state of affairs it is not realistic to shorten this term, and therefore the CFT advises you to grant the extension conform the request of the Government of St. Eustatius,” stated Chairman Gradus.

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The Statia Government on July 14, 2017 requested an extension until October 31, 2017 with as reason given that the 2015 annual account still had to be delivered by the accountant and that this information was needed for the 2016 annual account.

The law regulating the financial matters of the Caribbean Netherlands islands, the FinBES, states that the public entities on July 15 have to produce the annual account, accompanied by a certificate and report of the auditor, of the previous budget year.

Saba did make this deadline, while Bonaire did not. Bonaire, like St. Eustatius has requested an extension until September 1, 2017, due to “a concurrence of circumstances.” The CFT noted with satisfaction that Saba managed to present an annual account over 2016, accompanied by an approved auditor’s report for both reliability and legality.

“The CFT compliments you for achieving this for a third year in a row. It shows that Saba is able to maintain its financial management at an adequate level,” stated Chairman Gradus in a recent letter to Saba Island Governor Jonathan Johnson, published on the CFT website.

The auditor’s report showed that there are three risk areas that need priority: the financial position of the Public Entity Saba due to an insufficient resilience and a great dependability on the incidental financing of the Dutch Government; the risks as a result of the pension legislation for (former) politicians; and a great dependability on a few civil servants as a result of the small size of government.

Saba’s Executive Council stated in a reaction to these findings that it was taking several actions to reduce the risks. Talks will be held with the Dutch Ministry of Home Affairs and Kingdom Relations BZK about ways to structurally strengthen Saba’s financial position.

In consultation with the CFT, the pension legislation for retired politicians will be analysed and discussed with the BZK Ministry. Also, the Island Government will try to mitigate the great dependability on the few employees through some measures.

Saba’s 2016 annual account showed a surplus of US $69,063. According to the CFT this was “clearly” a lower surplus than the originally budgeted $807,011 and as was foreseen in the last budget amendment, at which time the surplus was estimated at $331,755.

The lower surplus was caused by a few setbacks: the high allocation for the pension regulation for (former) politicians; the financial impact of the new Collective Labour Agreement (CLA); the increased cost of maintenance and energy, as well as the higher cost of the waste management location.

The local levies raised in Saba in 2016 amounted to $992,259, which is more or less equal to the $1 million that was collected in 2015. No payments were made in 2016 to repay the interest-free loan for the Fort Bay Road. It was agreed with the BZK Ministry that the term of the loan will be extended by one year.

Saba’s ambition to build a $2 million destination reserve to increase the island’s financial resilience has proven to be no longer feasible unless the so-called Free Remittance (“vrije uitkering”), the contribution of the Dutch Government or other financial improvements, are realised.

The 2016 annual account showed that not all employees of the former Island Territory of Saba were correctly registered in the administration of the new defunct General Pension Fund of the Netherlands Antilles APNA. As a result, these workers were also not correctly registered in the administration of the Caribbean Netherlands Pension Fund PCN.

The CFT remarked that it had received the 2016 annual accounts of several government-owned companies in a timely fashion. It concerned the Saba Telephone Company NV, Saba Electric Company NV and the Saba Bank Resources NV and the Saba Enhancement Foundation (SEF).

Since the SEF does not generate any more revenues in 2016, the local government decided to eliminate this foundation by removing it from the St. Maarten Chamber of Commerce and Industry in the course of 2017.

Source: The Daily Herald https://www.thedailyherald.sx/islands/68185-cft-praises-saba-statia-gets-extra-time-for-annual-account

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