Audit report: business license process is cumbersome
PHILIPSBURG – The business license process at the Economic License Department is cumbersome but there is plenty of room for improvement, it appears from the General Audit Chamber’s report entitled ‘Audit into the business license process and the possibilities of digitizing.’ The Minister of Tourism and Economic Affairs, Ludmila de Weever, read the report before its release and had no comments on its contents.
In 2019 the license department received 579 business license applications. While the department aims to issue these licenses within six weeks, it managed to do this only with 16 percent (95) of them. Processing the bulk of the applications (395) took between 12 and 18 weeks, while another 61 applicants had to wait 24 weeks for a decision. For 28 applications the process took more than 24 weeks.
“The process can be more efficient,” the audit report notes. It found that the process is “cumbersome,” that the use of automation is “sub-optimal” and that there is uncertainty about the annual fees that should be paid. Altogether these factors result in loss of income for the government, but the auditors could not put a number on it “due to contaminated records.”
Currently, the license department uses three systems to process business license applications: BLIS (Business License Information System), Buslic (Business license), and a spreadsheet. The Audit Chamber recommends using only BLIS and including the other two systems in it.
The department should also draft a plan that allows the electronic submission of applications and related documents. This would reduce the number of times applicants have to visit the department. As things go now, the process consists of five steps: presenting all relevant documents and paying processing fees at Customer Service, presenting proof of payment at Customer Service, review by a licensing advisor, approval or rejection letter signed by the department head, and collecting a payment order for payment of the remaining fees at the Receiver’s Office.
After that, there is another step: the department produces an annual list of license holders; they send this list to the Receiver’s Office for invoicing and the collection of annual fees.
The audit report found that the structure of the internal organization is adequate but it also notes that the completeness of the registrations (in BLIS, Buslic and the spreadsheet) is “not checked based on totals.”
There is a risk that unauthorized changes to the files cannot be detected (in a timely fashion), the auditors noted. “Therefore, there is uncertainty about the reliability of the registration and the amount of outstanding annual fees.” The auditors could not determine the compatibility of the three registration systems either.
Currently, applicants must visit the department five times: to submit their application, to present proof of payment of the processing fee, to collect a payment letter, to present proof of payment and to collect their license. The department wants to change this in the future by digitizing the process, but the report does not offer any insight into when this might happen.
The department has to scan all documents. While steps were taken in the past to enable electronic application, this option is not yet available. The report does not explain why this is so.
The BLIS application is “intended to produce the annual payment file,” but the department maintains a separate file for it in the Buslic system because BLIS is not linked to the administration of the Receiver’s Office.
Every year the Economic License Department sends a list of license holders to the Receiver’s Office. This information is added to GEFIS, the integrated financial information system. In 2016 the Receiver’s Office stopped invoicing license holders for the annual fees but it does send out reminders to those who do not pay. “The receiver’s settlement of outstanding invoices is not optimal,” the report states with a reference to another audit report: Efficient Collection of Government Claims (November 2019).
The audit report makes several suggestions for improvement. It recommends that the department sends invoices to its clients for the annual license fee; when the receiver gets paid, the department should receive a notice and this information should then automatically be entered into BLIS. If no payment is received the department can make an arrangement with the Receiver’s Office for an investigation.
Hurricane Irma did not just damage the government’s ICT systems, the monster storm also resulted in the loss of a lot of information. The Audit Chamber switched to cloud computing in 2017 and it recommends now that the license department does the same.
In its conclusion, the audit report notes that the frequency of contacts between applicants and the department can be reduced and that the department can save itself a lot of work by having applicants submit their documents electronically. Invoicing can be simplified through the optimal use of the BLIS application.
Furthermore, the audit notes that the department can make better use of automation; that the number of registers can be reduced from three to one and that enhancing internal controls and a cleanup of the backlog of contaminated receivables-files can increase insights in outstanding annual license fees. Lastly, it is possible to increase the efficiency of claim-settlements through cooperation with the Receiver.
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Relevant links:
Press release General Audit Chamber on Business License Report
Audit Report Business License Process (June 2020)
2019 Audit Report: Efficient Collection of Government Claims (November 2019)
