The General Audit Chamber issued their report to Parliament on the 2012 Financial Statements of Sint Maarten today, Monday, May 19th 2014. The National Financial Accounting Ordinance requires that we publish a report on our findings within a period of one and a half months after receipt of the copy of the report from the auditor (SOAB). As SOAB’s report was issued on April 9th, 2014, our report must be issued by May 21st 2014. With the presentation to Parliament today, we have complied with the legally stipulated period for submission.
The 2012 Financial Statements cover the period from January 1, 2012 to December 31, 2012 and represent the second financial statements of Sint Maarten. Our report is the of our financial compliance audit on the financial statements and the operations of the ministries of government of Sint Maarten. As part of this audit, we also 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 reflect such.
We reached a number of conclusions based on our examination of the 2012 Financial Statements. We find that the financial information contained in the 2012 Financial Statements does not meet the requirements stipulated in the National Financial Accounting Ordinance and the National Ordinance General Audit Chamber. An example of this is the fact that the financial statements contain material errors amounting to ANG 45,7 million as well as budget over- and underspending.
Furthermore, our review leads us to conclude that despite a few positive developments within the 2012 Financial Statements (for example clearer exhibits (statements) and additional explanations), ministries of Sint Maarten are not ‘in control’ of their operations. We also find the financial statements to be lacking in terms of informational value. This was also our conclusion after our review of the 2011 Financial Statements. In both years, the financial statements contained insufficient information to allow users to form an opinion regarding the implementation of policy intentions and the management thereof.
The 2012 Financial Statements are therefore not compliant. Improvement is urgently needed if government wants to obtain an unqualified opinion from their auditors. For 2012, the auditor issued an adverse opinion. We feel this opinion is justified.
As part of our report, we issued a number of suggestions and recommendations to Government, the Minister of Finance (as well as the other ministers), and to Parliament. For example, we recommend that government acts in accordance with the National Financial Accounting Ordinance (article 54) in terms of ratifying the financial management of ministers. To date, the 2011 Financial Statements have not been handled by Parliament.
Financial Compliance 2012 FInancial Statements Sint Maarten
To improve the reporting regarding policy, we suggest that policy objectives are drafted in a specific, measurable, achievable and time-related manner. All ministers should provide more/better input for the budget and the financial statements. This will aid the Minister of Finance in effectively executing his role as coordinator of the process, and also will allow him to give proper account for the finances of the Country.
Parliament was advised to, among others, establish budget agreements with ministers regarding policy performance and objectives to be achieved (again, as measurable, achievable, realistic and time-related as possible). Moreover, we suggested that Parliament establish agreements with ministers regarding receipt of timely and periodic information regarding the result of policy. At present, Government does not (always) comply with the legal requirements for the presentation of memoranda and reports related to the financial cycle.
The Minister of Finance’s response is included in the report. We look forward to evaluating the minister’s pledge to address the issues we have enumerated as part of our ongoing reviews, and certainly in terms of our examination of the 2013 Financial Statements.
The report on the 2012 Financial Statements of Sint Maarten is available in both English and Dutch on the website of the General Audit Chamber (www.arsxm.org).