Quality of reports is expected to pick up
Kralendijk – After having made some adjustments Bonaire is now on track with the implementation of its budget. Bonaire is expeditiously implementing the multiannual action plan to improve the financial management. Even though many improvements are still needed, the Cft ascertains that progress has been made with regard to the financial administration. Nevertheless, a timely submission of suitable report, which will contribute to a better control of the budget, is still considered necessary.
The Board of financial supervision Bonaire, Sint Eustatius and Saba (Cft) met on September 28th with the Executive Council and the Island Council of Bonaire. During these meetings much attention was given to the subject of financial management and the various reports submitted by Bonaire. Although Cft finds that since mid-year the budget execution is lagging behind, no problem is foreseen for the second half of 2015. The Board furthermore paid a visit to Cargill, and the importance of the company for Bonaire's economy was the main focus of the meeting.
Report obligations
Bonaire was able to timely submit the audited 2014 financial statements to the BZK minister. Nevertheless, this has resulted in delays in meeting other reporting obligations. For example, the first performance report, including budget amendment, was only adopted by the Island Council in August. The second budget amendment of 2015, which has now been submitted to the Island Council, is mainly used to compensate the revenues that will not be realized in the current financial year. Cft will provide a positive advice for this budget amendment.
Budget implementation
Once the minister approves the 2nd supplementary budget submitted by the public entity, the total budget amounts to approximately USD 60.1 million. In the first half of the year USD 27.2 million was realized in revenues and 25.5 million in expenses, which is respectively 45% and 42% of the total budget. Although the gains and losses hat were realized in the first half of 2015 are lagging behind, for the time being the Cft does not consider this to be a problem, since Cft has noted a similar trend in the last three years as well.
Liquidity position
The Cft is concerned about the declining liquidity position of Bonaire and has urged the Executive Council to build an adequate liquidity buffer. Any possible windfalls can be utilized to this end.
Financial management
During its visit the Cft observed that the multiannual financial management improvement plan is keenly carried out. In the course of the implementation of said plan in 2014 it was already pointed out that most of the improvement will be completed in the second half of 2015. Cft will therefore follow the future developments of the financial management with extra attention. In any event Cft currently notices that progress is made in the area of financial administration. With the current financial system, it is fairly simple for the Finance department to provide interim reports at a very short term. This allows the Executive Council to make better use of the financial reports as management tools. It also enables a faster production of performance reports. Since the drafting of the reports will take less time, it is anticipated that future performance reporting will now be supported by a more detailed interpretation. This in its turn will reinforce the supervisory function of the Island Council.
