Audit Chamber issues adverse opinion about 2020 financial statements
PHILIPSBURG — The government is not very good at managing the money it has at its disposal to run the country. This becomes clear once more from the General Audit’s Chamber audit of the country’s 2020 financial statements. On a balance sheet of a bit more than 2.3 billion guilders, the Chamber identified 992 million, or 42 percent, as “uncertain.”
The government’s accounting bureau SOAB arrived at an even higher number of “identified uncertainties”: 1.6 billion guilders, more than half of the total balance sheet. The Audit Chamber points out that this amount includes items for which the scope cannot be quantified. The Chamber left those items out of its estimate: hence the difference between the two audit reports.
The Audit Chamber’s report states in its introduction that “after the transition to country status, structural and long-term compliance errors and deficiencies remain.” It furthermore concludes that the 2020 financial statements “include irregularities and shortcomings.” The auditors found that expenditures were made without corresponding funds being budgeted, and revenues were not realized or were less than budgeted.
“We conclude that the 2020 Financial Statements do not present a true and fair representation of the financial position as of December 31, 2020, and income and expenses for 2020,” the report states.
In 2018 the Audit Chamber reported about the redundancy pay for political authorities of between 13,000 and 21,000 guilders per month for a period of two years. In the meantime, this term has been shortened to one year, but the government did not implement the Chamber’s suggestion of a mandatory job search for the recipients of these payments.
In 2020, the Kingdom Council of Ministers agreed to a deviation from the requirement that the budget be balanced. The Council gave permission for a budget deficit of 185.5 million guilders but the 2020 budget showed a 234 million deficit. The financial statements present a deficit of 181 million.
The Audit Chamber issued an adverse opinion about the 2010 financial statements. This is because a liability of 122 million guilders for cost of living adjustment is not included in the balance sheet and because the auditors found other minor reliability errors for a total of 13.8 million.
That the government’s bookkeeping could do with serious improvement appears from the following statement: “There is insufficient internal verification of the accuracy and completeness of the registration of process outcomes in the procurement of goods and services, granting of subsidies, payment of salaries and levying, and collecting of taxes and fees. Consequently, the accuracy and completeness of the accountability for these matters in the financial statements remain uncertain.”
The financial statements also lack information required by the National Accountability Ordinance (NAO). “Therefore, we cannot determine the extent to with policy intentions were achieved,” the report states. “If the budget is not prepared in accordance with the NAO, it cannot be used as the standard for the financial statements.”
The auditors are of the opinion that the 2020 financial statements “do not provide a true and fair representation of the financial position and result of operation and have not been prepared in accordance with all the provisions of the NAO.”
The irregularities the auditors found extend to all departments. “There are inadequate internal audit procedures in every ministry. The result is material uncertainties that significantly impact the financial statements.”
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