Wednesday , February 21 2024

CFT advices positive on Saba's 2017 budget

The Committee for Financial Supervision CFT of Bonaire, St. Eustatius and Saba (BES) earlier this week gave the green light for the draft 2017 budget of the Public Entity Saba. The budget is balanced and complies with the legal requirements.

CFT Chairman Age Bakker informed Chairman of Saba’s Executive Council Island Governor Jonathan Johnson as per letter on November 8, 2016, of the positive advice of the CFT regarding the 2017 draft budget, which was received on October 26, 2016.

The draft budget complies with the criteria of the existing financial laws for the Caribbean Netherlands, the FinBES Law and the BBV BES Law. The budget is balanced and according to the CFT “cautiously” drafted.

The draft budget also has a positive balance of US $440,000 which will be used to comply with the repayment obligation of various loans to the Ministry of Home Affairs and Kingdom Relations BZK, Infrastructure and Environment I&M and Education, Culture and Science OCW.

Saba will have to repay less next year than this year. The repayment amount was higher in 2016 at $807,011, but due to an agreement that Saba reached with the BZK Ministry to prolong the repayment period, the Public Entity was able to reduce the repayment amount for 2017.

The remaining funds, $367,011, as a result of the repayment agreement with The Hague, will partly be used to cover the cost of necessary maintenance and to cover the increase in salary costs. Aside from the lowering of the repayment obligation, the Netherlands made $276,000 available to Saba for the combating of poverty and to provide social support.

The budget has a total of revenues and expenditures of a little more than $11.5 million, which is a slight increase of $90,243 compared to 2016. One of the main reasons for this increase is the higher cost of personnel.

A large portion of the budget is destined to cover the cost of personnel: $7.1 million. The Public Entity has 166.6 full-time employees. Of the $7.1 million some $645,000 is covered by special allowances.

The budgeted salary expenditures will also increase by more than $0.4 million as a result of the new Collective Labour Agreement (CLA) and the annual periodic increases. An amount of $605,326 will be reserved to cover the pension obligations for current and former public office holders

The budget allocates $294,000 for planned investments in the local infrastructure, ICT and public hygiene. The Saba Enhancement Foundation (SEF), which is part of the collective sector, will be terminated this year.

The CFT once again commended Saba for achieving great improvements in its financial management. Saba managed to secure a declaration of approval of the accountant for its 2014 and 2015 annual reports. Saba currently focuses on improving and strengthening the internal audits.

The CFT did ask attention for the island’s cash flow situation, which is not worrisome in short term, but is insufficient if the long term debts are taken into consideration. The current reserves of $435,000 have to be increased in the coming years to the desired level of $2 million.

The Public Entity Saba has indicated that it is not easy to achieve the necessary surpluses on the budget. A restricting factor is the limited amount of the free remittance (“vrije uitkering”) which hardly covers the cost of maintenance. “The CFT acknowledges that this is a tough exercise, but still wants to ask the Public Entity to try and achieve stronger reserves,” CFT Chairman Bakker ended his letter.

The Daily Herald.

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