The National Audit Office has released the 2023 Audit Report, presenting a comprehensive overview of the government’s financial performance, governance, and accountability. The report, tabled in Parliament, reveals a $24 million fiscal surplus—an impressive turnaround from the $107 million deficit recorded in 2022.
This surplus was achieved through improved revenue collection, expenditure controls, and adherence to international financial standards. The report underscores the Federation’s commitment to fiscal responsibility and offers recommendations for enhancing public financial management.
Key Financial Highlights
Revenue Growth
The Federation recorded total revenues of $1.14 billion, exceeding the budgeted figure of $1.13 billion and reflecting a year-over-year increase of $10.5 million.
- Tax revenues surged by $55 million, totalling $437 million, driven by improved collection efforts.
- Non-tax revenue, dominated by the Citizenship by Investment Unit (CIU), contributed $621 million, accounting for 55% of total recurrent revenue.
The report commended these achievements, stating, “Revenue performance has demonstrated resilience in challenging economic conditions, reflecting the success of enhanced collection measures and sectoral reforms.”
Expenditure Management
Government expenditures totalled $1.12 billion, $121 million lower than in 2022. Capital expenditure accounted for $247 million, representing 70% of the revised budget. However, delays in 31 capital projects were flagged as a concern.
The report noted, “While overall spending was well-managed, inefficiencies in project execution hindered the timely utilisation of allocated resources, underscoring the need for improved planning and monitoring.”
Debt and Economic Metrics
The Debt-to-GDP ratio improved significantly, falling from 60.2% in 2022 to 55.7% in 2023. This reduction reflects lower default risks and aligns with sustainable debt targets.
“A reduced debt burden enhances fiscal flexibility and reinforces the Federation’s economic resilience, providing room for future investments in critical areas,” the report stated.
Challenges and Areas for Improvement
Outstanding Revenue Arrears
Revenue arrears were reported at $161 million, with the Inland Revenue Department and Customs Department responsible for the majority. In light of this, the report urged swift action noting that,
“Efforts to recover arrears must be intensified, particularly through the appointment of Income Tax Commissioners to expedite appeals and objections.”
Unutilised Budgets and Contingent Liabilities
Unutilised capital budgets and rising contingent liabilities, which now constitute 61% of public sector debt, were highlighted as critical challenges. The report recommended better resource allocation and risk mitigation strategies to address these issues.
Sectoral Contributions
- Citizenship by Investment Unit (CIU):
- Generated $621 million in revenue, reaffirming its status as the Federation’s largest income source.
- Tax Collection Agencies:
- The Inland Revenue Department and Customs and Excise Department surpassed their combined revenue targets by $27 million.
- Capital Projects:
- Delays impacted initiatives across sectors, with the report calling for enhanced project management frameworks.
Prime Minister Dr. Terrance Drew welcomed the findings which underscore the strides his administration has made in fiscal management.
“This report reaffirms our government’s commitment to sound financial policies and transparency,” he said. “The surplus, coupled with improved debt metrics, is a testament to our efforts to ensure sustainable development and economic resilience.”
The Director of Audit, Carla Berridge, highlighted in the report the Federation’s compliance with the International Public Sector Accounting Standards (IPSAS), stating, “Adherence to IPSAS reflects a maturing financial governance framework, enhancing both transparency and credibility in public financial management.”
The Audit Report further provided actionable recommendations, including:
- Enhancing Project Efficiency: Improve planning, execution, and monitoring of capital projects.
- Addressing Revenue Arrears: Strengthen collection mechanisms and prioritise long-standing arrears.
- Mitigating Contingent Liabilities: Develop risk management strategies to address growing liabilities.
The 2023 Audit Report positions St. Kitts and Nevis as a model for fiscal discipline in the region. With a clear roadmap for improvement and a demonstrated commitment to accountability, the Federation is well-poised to build on this success.
“Together, we are building a nation defined by resilience, responsibility, and opportunity,” Prime Minister Drew concluded.
This milestone report underscores the government’s dedication to fostering transparency, ensuring financial stability, and securing a prosperous future for all citizens.
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