Efficiency at the expense of transparency undermines accountability and good governance.

The Court of Audit examined whether the budget was executed lawfully during the 2020 fiscal year. It also analyzed the effects of the COVID-19 pandemic on the financial results. The Court of Audit emphasizes that timely and complete reporting through the annual financial statements is a fundamental prerequisite for accountability, transparency, sustainable public finances, and good governance. It is, therefore, concerning that accountability for the exceptional year of 2020 is only now being reported, more than five years after the fact.

Low Point in Public Finances

The year 2020 was heavily marked by the COVID-19 pandemic and represented a low point in Aruba’s public finances. The government disbursed AWG. 341.5 million in emergency aid in 2020. A total of AWG. 275.5 million was disbursed in wage subsidies, AWG. 42.8 million in FASE emergency aid, and AWG. 22.9 million under the SME scheme. In addition, AWG. 99.7 million was paid as the national contribution to the AZV. 

Due to higher costs in 2020, coupled with lower resources, the operating deficit amounted to approximately AWG. 739.6 million; an increase of AWG. 735.2 million compared to 2019. In 2020, the country received financial support from the Netherlands in the form of loans, which were subject to strict conditions.

Less Transparency in the National Budget

Changes have been made to the structure of the 2020 National Budget model. Although this has led to fewer overspends (9 in 2020 compared to 90 in 2019), the Court of Audit notes a reduction in the transparency and informational value of the National Budget. 

The lack of a clear link between policy and budget figures limits the Parliament’s budgetary authority and increases the policy discretion of ministers. The changes made to the model allow ministers to reallocate budgeted funds between policy areas within their ministry without prior approval from the Parliament.

Irregularities and Shortcomings

During the implementation of the 2020 budget, cost overruns were identified, resulting in    AWG. 12 million in irregularities. In addition, the disbursement of AWG. 42.8 million in FASE emergency aid lacked a legal basis. There were also irregularities about several loans. This is because the Minister of Finance did not have prior authorization from Parliament to enter into loans with a term of more than five years, in accordance with the requirements of the 1989 Accounting Regulation.

The country’s central financial account for 2020 was not closed on time. The structural delay in closing the financial accounts results in entries for prior fiscal years being made based on evolving insights, which further limits the reliability and consistency of the financial statements. Although steps have been taken in the financial statement process, the 2020 Financial Statements do not yet fully comply with legal requirements.

Call for Structural Improvements

The findings underscore that addressing backlogs must not come at the expense of quality, transparency, and compliance with laws and regulations.

In view of the planned introduction of auditable financial statements for the 2026 fiscal year, timely corrective measures must be taken to structure and strengthen financial management and restore confidence in public finances.

With this audit report, the Court of Audit wants to ensure that transparency and timely rendering of accounts are viewed as indispensable requirements. This must, without exception, become an automatic process within a single budget cycle. The result will be the achievement of sustainable public finances and the restoration of confidence in good governance.

The report of the Court of Audit, including the findings, conclusions, recommendations, the response from the Minister of Finance, and the afterword by the  Court of Audit, is available at www.rekenkamer.aw. The Court of Audit is currently conducting its audit of the 2021–2024 annual accounts. The results of this audit will also be published this year.