The General Audit Chamber issued a report regarding their Compliance Audit of the 2014 Financial Statementarsxm
Philipsburg – The General Audit Chamber issued a report regarding their Compliance Audit of the 2014 Financial Statement of Government of Sint Maarten on December 9th, 2015.
The report opens with the statement that since the attainment of the status as Country within the Kingdom, Sint Maarten has been unable to present a reliable and auditable financial statement. “We find this lack of progress unfortunate”, according to the Audit Chamber.
Similar to previous years, the Audit Chamber concluded that the informational value of the report accompanying the 2014 Financial Statement is inadequate. The 2014 Financial Statement fails to include an explanation regarding the extent to which policy intentions were achieved. The financial statement also does not provide sufficient information regarding the costs associated with the achievement of policy. “Parliament is therefore not provided the opportunity to form a proper opinion regarding the implementation of policy and the management thereof”, according the Audit Chamber.
Financial information in the financial statement must be developed in accordance with the budget and related regulations. The Audit Chamber determined that the financial information does not meet the requirements of the National Accountability Ordinance (NAO). Based on the extent of errors related to reliability, legal compliance and document composition, the Audit Chamber feels the accountant correctly issued an adverse opinion on the 2014 Financial Statement.
“The uncertainties and errors found in the financial statement are such, that we conclude that the financial statement is unreliable again this year”, the Audit Chamber stated.
The Audit Chamber issued a recommendation last year as part of its audit report on the 2013 Financial Statement. Specifically, the Audit Chamber called for the Minister of Finance to develop a new plan to improve financial management. According to the Audit Chamber, “one year hence, we note that the plan is, for the most part, not complete. None of the subsets (sub plans) of the plan have been formally presented to the Audit Chamber”. The Minister of Finance is requested to finalize the remaining subsets of the plan for the improvement of the financial management by the first quarter of 2016.
The report regarding the compliance audit of the 2014 Financial Statement contains a number of other recommendations to both the Minister of Finance and the individual ministers.
The ministers are advised to include the costs and the desired effects for each intended policy goal in their respective ministerial budgets. It is further suggested that the ministers take care to properly monitor and evaluate their goals, the costs and the effects, and to give account for their goals at the end of the fiscal year to the Council of Ministers.
The Minister of Finance is counseled to ensure that the individual ministers provide timely interim information regarding the achievement of proposed policy intentions, the costs and effects thereof, and, to make sure that the financial statement includes a report, per ministry, regarding the achievement of proposed policy intentions, the costs and effects thereof.
The Audit Chamber also issued suggestions to Parliament. Specifically, Parliament is advised not to accept budgets unless individual ministers indicate what policy goals as well as desired effects they intend to achieve, and at what cost. Parliament is further cautioned not to accept that the Minister of Finance neglects providing Parliament with timely, interim reports regarding results, costs and effects of policy per ministry.
Based on their findings, the Audit Chamber seeks to contribute to an orderly and accountable financial management for Sint Maarten. In so doing, there is more of a guarantee that public funds are spent in a legitimate, efficient and effective manner.
The report “Compliance Audit: 2014 Financial Statement of Sint Maarten” is published in both English and Dutch and is available on the website of the General Audit Chamber (www.arsxm.org).