The Island Council on Thursday, July 13, approved the 2022 Year Report and the first
2023 budget amendment of the Public Entity Saba. During the Central Committee meeting one day before, Commissioner of Finance Bruce Zagers provided some background information.
Saba was again able to achieve an unqualified audit opinion on the financial statements as well as an unqualified audit opinion of the financial compliance of the income and expenses from independent auditor EY. “These achievements once again signify that strong financial management remains one of the fundamental governing principles of this administration,” said Zagers.
A financial highlight in 2022 was the structural increase of the free allowance, which is the structural funding that the public entity receives from the Dutch Government. The increase in the free allowance proved that strong financial management, stability in government and being a trustworthy partner is important to make progress, stated Zagers.
“Rather than receiving less than US $1 million structurally, Saba received an increase of over $5 million structurally. Later in 2022, Saba also received over $3 million, added to the free allowance, for the Nature and Environment Policy Plan for nature-related projects,” said Zagers.
Because of the positive year-end balance, the Executive Council advised the Island Council to reserve funding to continue the pilots for backyard farming and animal husbandry in 2023 and for other food security and sustainability projects. It was further proposed to add funding to the infrastructure reserve provision for the purchase of two parcels of land, one of which will be used for parking.
With the increased free allowance, and with the positive balance, the liquidity position of the Public Entity Saba has further improved. The auditor suggested to continue the conservative budgetary spending to prevent a deterioration of the financial position. And, although the year-end balance was positive, and unqualified audit opinions were issued again, some concern areas require attention.
One of the risk areas is the collection of outstanding debts, an amount which increased compared to the previous years. Seeing that this was an alarming development, government took mitigating actions, which included last year’s merger of the Receiver’s Office into the Finance Department. Previously, the debt collection was a task of the Receiver’s Office. Additional staff for the Finance Department was recruited and trained, day-to-day functioning was improved and a collection policy was developed.
Over the course of the year, the staff has been contacting and informing clients of their outstanding debts. Various payment plans and payments have already taken place. A large portion of the outstanding debts relate to business licenses which were not cancelled when businesses closed or managers left the island without notifying government. As a result, the invoicing for these licenses continued. The Finance Department will make an assessment of the outstanding debts and provide an overview of these person’s or businesses and an advice to cancel the business licenses and write of the outstanding receivables from the provision for bad debts. There are also several civil servants with outstanding debts for which payment plans will be created.
The auditors also highlighted several risk areas where it concerns cyber security and the vulnerability of the government’s ICT network. Several ICT specialists visited to make a thorough analysis of government’s systems. With additional support and with special attention from the Ministry of the Interior and Kingdom Relations (BZK) for digitalization, it is expected that significant improvements will be made this this year. Significant attention is being given to the safety of the government’s digital infrastructure.
Commissioner Zagers took the opportunity during Wednesday’s meeting to thank and give praise to the financial team for their efforts to maintain high financial management standards. He said that the majority the improvements and the opportunities that Saba has been able to achieve over the years can be linked directly to government’s core principle, namely strong financial management.
“Without the efforts of the financial team, their thoroughness and their strictness, we would not have been able to accomplish as much. Having to manage the regular administration, while juggling at least 70 individual projects which are financed through incidental funds and being able to produce high quality budgets, amendments, and year reports, is impressive,” Zagers said.