The so-called Bureau of Telecommunication and Post (BTP) building does not appear on the inventory of owned properties, despite [the Department of Facility Affairs] FZ stating that the building is owned by government, the General Audit Chamber stated in its report.
PHILIPSBURG--The General Audit Chamber recently tried to examine the effectiveness of government’s office-space and housing policies, but was unable to provide concrete conclusions because of poor recordkeeping by government entities and a lack of information.
“We would have liked to have made specific recommendations based on analyses,” the Audit Chamber concluded in the report that was issued in late March. The report tried to determine how much government pays in rent and whether the funds are used efficiently.
Firstly, the investigation was hampered because government does not have an office-space and housing policy. According to the report, the Ministry of General Affairs – which is responsible for managing government offices through its Department of Facility Affairs – recognises the need for this policy and is reportedly working to realise one.
“Due to the lack of an office policy, we were unable to establish whether the information presented is sufficiently detailed to allow effective choices to be made regarding housing of government departments. For example, it is not clear why the government chooses to rent in certain instances and whether leasing or rental is more beneficial than owning,” it was stated in the report. “The reason for choosing to rent/lease … was not explained.”
The Department of Facility Affairs provided a list of government-owned and -rented buildings to the Audit Chamber. According to this inventory, government owns 52 buildings and rents 40 more.
A majority of the civil service is not housed in government-owned buildings, said the Audit Chamber, adding that most of government’s properties are school facilities.
The Ministry of Education, Culture, Youth and Sport (ECYS) owns 36 buildings, while the Finance Ministry and the Ministry of Public Housing, Spatial Planning, Environment and Infrastructure VROMI each own three.
The Justice Ministry owns seven buildings. Rounding off the list were the Ministry of General Affairs with two buildings and the Ministry of Tourism, Economic Affairs, Transport and Telecommunication (TEATT) with one. The Ministry of Public Health, Social Development and Labor VSA does not own a single building.
As for rented facilities, the Ministry of General Affairs leads the way with 16, followed by the Justice Ministry with eight and the ECYS Ministry with seven. The TEATT Ministry rents five buildings, while the Finance Ministry and VSA Ministry rent two buildings each. The VROMI Ministry does not rent a single building.
Government paid approximately NAf. 14.6 million in rent in 2016. This jumped by 26 per cent the following year, up to a little more than NAf. 16.4 million. Government paid approximately NAf. 17.8 million in 2018, NAf. 17.2 million in 2019, and NAf. 16.7 million in 2020.
According to the report, government pays NAf. 461,935 in rent per month for the new government building and about NAf. 154,500 per month for the Vineyard Building, which houses the Tax Office and several VSA Departments.
The increase in rent payments since 2017 was caused by Hurricane Irma, said the Audit Chamber. “Several buildings were destroyed, and alternative accommodation had to be sought for various departments. Some government departments were able to be housed in the new government building. For others, alternative locations had to be sought, which inevitably resulted in additional cost,” it was stated in the report.
Despite this seemingly exhaustive list, the Audit Chamber questioned the reliability of the information presented in the inventory.
“There is a possibility that the information provided to us is incomplete. For example, the so-called Bureau of Telecommunication and Post (BTP) building does not appear on the inventory of owned properties, despite [the Department of Facility Affairs] FZ stating that the building is owned by government,” the Audit Chamber said.
The Audit Chamber also realised that the inventory incorrectly reported the rent paid for its own facility. The inventory listed the Audit Chamber’s annual rent at NAf. 16,524, but the Audit Chamber said it pays some NAf. 9,000 in rent per month.
“We believe that [the Department of Facility Affairs – Ed.], which manages a lease/rent administration, should ensure the accuracy of the information it provides,” said the Audit Chamber.
In addition to questions of reliability, the inventory did not contain all the information requested by the Audit Chamber.
Government did provide the name and address of each property, its ownership details, rental cost (per month or per year), and occupancy of departments per location. However, the number of staff per department or location was missing. Government also could not provide the number of square metres that it rents.
“The question whether the government gets value for money for the rental of the buildings remains unanswered for the time being,” said the Audit Chamber.
The Audit Chamber was also unable to conduct a comparative analysis of rental cost versus investments in owned buildings because the “information required for such a calculation is not available or is not adequately maintained.”
According to the inventory, government has four vacant buildings: the former police academy on A.Th. Illidge Road, the Soremar Building in Cole Bay, and the old government building and Philipsburg Jubilee Library building in Philipsburg.
However, the Audit Chamber said it is not clear whether rent is being paid for these damaged buildings.
“The reason for the lack of complete information about the vacancy was not communicated to us,” said the Audit Chamber in the report. “The Ministry [of General Affairs] indicates in its response that ‘no (adequate) central records are (or can be) currently maintained by [the Department of Facility Affairs], for a variety of reasons.’ The aforementioned reasons were not clarified.”
The lack of information from the Ministries of General Affairs and Finance greatly influenced the audit, concluded the Audit Chamber. “We received some of the requested data. However, we cannot determine the completeness and accuracy of the data received. Although the remaining information was promised, the information was never sent, despite this being a legal requirement. Not until the final stage of the audit, during the rebuttal process, did it become clear that the requested information was not available.”
Suggestions
While the Audit Chamber could not determine whether government is effectively utilising office space, it did make four suggestions.
First, it urged government to finalise its office space policy. “Having a policy or plan is essential for the review of buildings and office space from different perspectives. … A policy containing scenarios (for example, rent versus property) can be compared to determine (retrospectively) whether scarce public funds are being used efficiently,” said the Audit Chamber.
The Audit Chamber also called for better data management. “In order to specify where savings are possible, a reliable and detailed administration is needed, including knowing how many square metres of office space is needed and the current occupancy of locations. Efficiency can be increased by comparing data and possibly identifying inefficiencies.”
The Department of Facility Affairs must also be “sufficiently equipped to carry out all tasks,” said the Audit Chamber. “According to the [National Ordinance on the structure and organisation of government] LIOL, the Department [of Facility Affairs] is responsible for the management of the government’s facilities. This responsibility may require further specification.”
Finally, the Audit Chamber recommended that government conduct so-called benchmark studies of real estate prices.
“For the management of buildings/office space and the development of policies, it is important to make the costs transparent and conduct comparative analyses. This requires benchmarking.
“By means of benchmarking, the costs and their constituent components can be assessed against certain objective measures. Benchmark research uses a reference framework and key figures. For example, the government could compare the rental costs with the leasing costs on the local real estate market,” said the Audit Chamber.
