Oranjestad:--- The Board of financial supervision Aruba (CAft) made its first official visit to Aruba on September 25th, after the National Ordinance temporary financial supervision (LAtft) came into force. The visit was focused on the practical aspects of the LAtft and the further development of the trust basis, according to Chairman Age Bakker. In the meantime, shortly after the ratification of the LAtft by Aruba Parliament, the CAft issued an advice on the implementation report of September 11th, 2015, the draft budget 2016 and the annual accounts of 2014.
The Board visited Aruba on Friday September 25th. The Board met the Acting Governor, the Minister of Finance, the Council of Ministers and the Finance Committee of Parliament and the ATIA.
A good start
The LAtft was adopted by Parliament on August 27th, 2015. Subsequently, the Council of Ministers of the Kingdom agreed to the LAtft and the nominated members of the CAft on September 4th. In addition to Chairman Age Bakker upon proposal of the Kingdom, the CAft also consists from Robert Croes upon proposal of Aruba, and Sybilla Dekker upon proposal of the Netherlands. During the visit the midyear figures were discussed and various action points arising from the LAtft were elaborated on. These action points include: agreements about how to go about the obligation to provide information, the periods during which advice on various documents is to be provided, agreements regarding the improvement of financial management, agreements for entering into loans and the stipulation of the collective sector.
Second execution report
In the recently released advice on the implementation report of September 11th the CAft noticed that the budget realization was 48% over the first half year, both in terms of resources as costs. The operating deficit up to June 2015 amounted to AWG 80 million, about 50% of the amount budgeted for the entire year. Execution of the budget thus seems to be on schedule, but to reach a final conclusion is difficult since a seasonal analysis has not been possible so far, and the quality of the financial management is still not at the desired level. Some caution in interpreting the exhaustion figures is therefore required. The implementation of the consolidation measures shows progress compared to the first quarter of 2015 but is still lagging behind, particularly with regard to the curbing of personnel costs. CAft recommends reinforcing the control on the implementation of the consolidation measures in the second half of 2015. In the third quarter of 2015 the CAft expects to see positive effects resulting from the increase of the BAZV rate.
Draft budget 2016
On September 17th, 2015 the CAft submitted its advice on the shortened 2016 draft budget. In its advice the CAft zoomed in on a number of important topics. The recommendations partly see to the strengthening of the control and substantiation of proposed modifications, such as the revision of the tax system and economization on staff. The CAft finds that the shortened 2016 draft budget provides limited insight into the intentions for 2016. The link between policy and the numerical multi annual calculations is not sufficiently transparent: e.g. there is no connection between on one hand, the Spearheads Note (Speerpuntennota) and on the other hand the budget. The proposed measures should be supported by both legislative proposals as explanatory figures. The CAft is of the opinion that, considering the figures supplied by Government, further changes are necessary in order to realize the budgeted deficit of 2,0% of the GDP for 2016.
