CFT wants flying start to plan for better financial management

ST. EUSTATIUS–The Board of the Committee for Financial Management CFT discussed the budgets of 2015 and 2016 and the state of financial management with the Executive and Island Councils of St. Eustatius on Monday.

 

“The manner in which information regarding the financial situation of Statia is being provided really has to improve,” CFT Chairman Age Bakker said. In addition, CFT believes that Statia needs to start implementing the financial management action plan rapidly, now that two process managers have been appointed to tackle the administrative and financial problems.

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CFT said the provision of information about the implementation of the budget and the island’s financial situation had “been extremely deficient” last year.

“This makes it very difficult for CFT to fulfil its supervisory role adequately, but on the other hand it also complicates the work of both the Executive and the Island Councils. Because of the lack of insight in the financial situation the Executive Council cannot use the budget appropriately as a management tool, nor does it provide enough insight to the Island Council to adequately carry out its control function. That is an undesirable situation,” the CFT Chairman stated.

Statia is facing a “major challenge” this year, according to CFT. The 2014 annual accounts showed a deficit of more than US $300,000 and CFT did not deem compensation thereof feasible in 2015. That is why the deficit should be compensated in the current budget year 2016.

Also, approximately $200,000 which was withdrawn earlier from the general reserves is due for compensation. Together these sums amount to more than $500,000.

“CFT is well aware of this predicament,” it said. Since the preliminary actual figures of 2015 show a surplus, CFT indicated that this probable positive result can be included in the 2016 budget, thus reducing the compensation load.

CFT has put as a condition that this positive result should be confirmed by the auditor’s report before it can be absorbed by means of a budget amendment. It was, therefore, deemed important for the public entity to have its auditors review the 2015 annual accounts as soon as possible.

Regarding the financial management improvement plan, CFT learned that meanwhile two process managers have been appointed to coordinate its implementation.

During a previous visit, the CFT Board already indicated that implementation should make a flying start as soon as possible. “CFT is confident that after the appointment of both process managers the implementation of the financial management improvement plan will now be picked up energetically. Obviously, it is very important that all parties involved in this give their full cooperation, and that the requisite financial resources are made available. Sufficient execution capacity should also be available on Statia,” it was stated.

During the deliberations it emerged that it is difficult to fill certain key positions, such as those of Head of Finance and Director of Human Resources. The Finance Department has been struggling for some time with capacity problems. For that reason it was decided to contract an accountant to prepare the 2015 annual accounts for the public entity.

Statia does not have sufficient insight in its liquidity position, CFT said. This is particularly the case for the resources made available by the Dutch Ministries for specific projects through the “special benefits.” In consultation with CFT, a solution is being worked on to gain and maintain more insight into the scope of these special benefits. To this end a new bank account was opened.

Additionally, the public entity indicated it will perform an analysis of these special benefits. The results will be included in the annual accounts 2015, and the first implementation report in 2016.

Source: The Daily Herald CFT wants flying start to plan for better financial management

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