PHILIPSBURG: --- The General Audit Chamber of St. Maarten, in its audit report of October 2024, which is published on their website, states.
A recent mini audit conducted by the General Audit Chamber has revealed significant shortcomings in the Government’s Christmas food voucher program for civil servants. The program, which aimed to distribute ANG 250 vouchers to all public servants in December 2023, was initiated as a goodwill gesture to boost morale and foster a sense of appreciation among employees. However, the audit has raised concerns about budget compliance, procurement processes, and internal controls, calling for greater transparency and stricter oversight in future initiatives.
Budget Shortfalls and Overspending
The audit uncovered significant discrepancies between allocated budgets and actual expenditures across various government ministries. For example, the Ministry of General Affairs initially budgeted ANG 8,696 for staff-related expenditures under the “Other Goods & Services” category; however, the actual spending for the vouchers ballooned to ANG 57,150, resulting in an overspending of approximately ANG 49,000. Similarly, the Ministry of Education, Culture, Youth, and Sports (ECYS) exceeded its budget allocation by ANG 53,705.
Furthermore, some ministries used unrelated budget codes to finance the program. For instance, the Ministry of VROMI utilized sub-project codes for “reconstructive maintenance burial places” and “waste center” to book food voucher expenses, which auditors found inappropriate given their unrelated nature.
Procurement Process Under Scrutiny
The report sharply criticized the tendering process for selecting the vendor to supply the vouchers. On November 15, 2023, an initial Request for Quotation (RFQ) was sent to eight vendors, of which four submitted responses. While Vendor 3 provided the lowest price and greatest discount, the government opted for Vendor 4, citing “qualitative feedback from past initiatives” and the vendor’s flexible payment terms.
However, the audit noted inconsistencies in this selection process, particularly introducing additional criteria during vendor evaluation that had not been specified in the RFQ. Such practices were deemed subjective and undermined the transparency of the procurement process. The Audit Chamber recommended establishing clear and consistent evaluation criteria before issuing an RFQ to ensure fairness and accountability.
Gaps in Internal Controls
Another area flagged for concern was the distribution of the vouchers. The eligibility criteria included permanent civil servants, temporary staff, and labor contract employees, but discrepancies arose regarding the classification and number of eligible recipients. While the government payroll listed 1,750 civil servants, only 1,706 vouchers were requested, raising questions about how staff eligibility was determined.
Furthermore, the distribution process lacked robust checks. Ministries relied on handwritten signatures to confirm receipt of vouchers, with instances of staff collecting vouchers on behalf of others. The lack of supporting documentation for these collections left room for potential misuse. To minimize abuse, the Audit Chamber recommended introducing measures such as requiring official authorization letters and IDs when third parties collect vouchers.
Another major flaw was a reconciliation system between distributed and redeemed vouchers. The selected vendor placed a six-month validity period on the vouchers, but the government did not establish processes to validate voucher usage or recover unspent amounts. The report emphasized the need for an audit trail to ensure proper funds tracking and identify unused resources.
Best Practices for Program Improvement
The Audit Chamber proposed a series of best practices to address the identified challenges and improve program efficiency if the initiative continues. Key recommendations included:
- Budget Consistency: Use standardized and appropriate budget codes across all ministries for similar expenditures.
- Transparent Procurement: Enforce upfront eligibility and evaluation criteria in tendering processes to avoid subjectivity.
- Stricter Distribution Controls: To ensure accountability, implement additional measures, such as requiring authorization letters for proxy collections.
- Reconciliation Mechanisms: Introduce systems to track voucher distribution and redemption, and explore the possibility of reimbursement for unused vouchers.
Government's Response and Moving Forward
The audit highlighted the government’s intent to recognize civil servants' contributions and enhance workplace morale. However, it criticized the lapses in budgeting, procurement, and oversight, which not only risked financial inefficiency but also undermined public trust.
Despite being given opportunities to respond to the audit’s findings, neither the Secretary-General nor the Minister of Finance provided feedback. The Audit Chamber remains optimistic that the government will adopt the report’s recommendations to raise financial management, accountability, and transparency standards.
Moving forward, the government must address these gaps to ensure its programs are fiscally responsible and beneficial to public servants. By implementing the suggested reforms, the food voucher program could serve as a model for equitable and efficient public-service initiatives.