Age Bakker (Cft): ‘Good financial management of great importance for Bonaire’
Because of delays in reporting limited insight available in budget exhaustion
KRALENDIJK - The budget of Bonaire is pretty much on track, but does not yet sufficiently have what it takes to be used as a steering instrument, since substantial adaptations are made throughout the year. This is why Bonaire has the task to bring its financial management in a good shape. With the Executive Council it is agreed that all bottlenecks will be resolved by the end of 2016, the latest.
On June 23rdthe Board of financial supervision Bonaire, Sint Eustatius and Saba (Cft) had conversations with both the new Executive Council and the Island Council of Bonaire. The agreements made with Cft last year concerning the multiannual financial management improvement plan were discussed during said meetings. The 2014 budgetary result, the execution of the 2015 budget and the liquidity position of the public entity were also discussed.
The annual report on 2014, which included a disclaimer of the accountant, was submitted on time, but took a lot of capacity and time, which caused delays in several other reporting procedures. The first execution report in 2015 was submitted with a delay of 5 weeks, because of which the government lacks for too long insight on the actual figures of the state of the public finance, making possible adjustments more difficult. In deliberation with Bonaire the Cft discussed how to improve this process.
An important instrument to reach this goal is therefore the financial management improvement plan, which has in the meantime been actualized. This plan will have to conduce to an approving accountant’s declaration over 2017. Bonaire has indicated that it will start an external improvement process to that effect, based on which by the end of 2015 the first results will have to be evident. The Cft has offered to advise on the matter, and to monitor the implementation of this plan in close consultation with the government.
Budget and liquidity
During the past year Bonaire had a positive result of USD 8 million which it was able to use to pay off according to scheme a number of loans taken out earlier. This result is somewhat higher than the budgeted result for 2014. For the current year Bonaire expects to end up with a positive result of more than USD 2,4 million, that can be used for paying off loans taken out at an earlier stage.
The first budget adaption shows substantial changes again for a total of USD 9 million (almost 20% of the budget). Changes of this size make the execution and the reporting process towards the Island Council more difficult. The Cft deliberated with the Executive Council about how to make the budgeting process more orderly so that the budget can indeed fulfill its role as a steering instrument. The Cft appreciates the ambition that the budget radiates.
In comparison with the beginning of this year, the liquidity position has somewhat decreased to a stand of USD 6,3 million as calculated per March 2015, which can be explained because of expenditures for projects financed with special payments (bijzondereuitkeringen). Bonaire was requested to monitor the development of the liquidity closely, allowing itself the space to intervene timely, should that be necessary. The Board has requested to be kept informed on a monthly basis. Good insight in the liquidity position is necessary before starting the implementation phase of new plans.
For the 2016 budget Bonaire has the challenge to timely submit the draft budget, in which the multiannual plans as agreed on during the Caribbean Netherlands week have been included. The multiannual program 2015 – 2018 agreed on may give an important contribution to durable reinforcement of the economic growth potential of Bonaire, and with that, to the improvement of the purchasing power and the decrease of poverty as well.