PHILIPSBURG--An agreement still has not been reached by Foundation for Secondary Education in the Windward Islands SVOBE, which provides secondary education to approximately 1,200 students at Milton Peters College and Sundial School, and the Ministry of Education, Culture, Youth Affairs and Sports, it was revealed in a LAR administrative procedure yesterday.
The case first came to court on Wednesday, February 26, when SVOBE said it was in grave financial difficulties and facing bankruptcy if the Ministry of Education did not provide funding in the amount of NAf. 4.5 million.
The parties had been given an opportunity until March 4 to reach an amicable decision. Despite talks having been held, and SVOBE having submitted more paperwork to provide evidence of the exact nature of its financial difficulties, an amicable solution was not reached.
In court, attorney Camiel Koster for SVOBE said SVOBE had presented to the ministry all requested documents, including documents showing the organisation's cash flow. He stated that a cash flow analysis had been made, providing evidence of the shortfall, and that talks had been held with the minister as a result.
SVOBE has three main concerns, Koster stated: outstanding debts of NAf. 2.6 million, a cash flow shortage calculated to have been NAf. 104,000 for the months of March and April alone, and short-term running cost such as GEBE bills, recruitment and the purchase of books for the schools, amounting to the NAf. 4.5 million SVOBE had requested in funding.
As a result of talks, Minister of Education Patricia D. Lourens-Philip had requested that Minister of Finance Martin Hassink put demands for repayment of the NAf. 2.6 million debt on hold temporarily, Koster said. However, he said he did not believe this really addressed the underlying issue: the fact that the lump sum system currently in use is not working. The cash flow analysis, which showed a shortage of NAf. 140,000, proved this, he said.
SVOBE is of the opinion that the lump-sum system, which was introduced in 2010, is the cause of all hardship. The lump sum provides the school with an estimated fixed amount per student, without making any differentiation between students at VSBO or HAVO and VWO levels.
Not only salaries and education materials are to be paid from the lump-sum payments, but also expenses for security, cleaning, telephone bills and office supplies. SVOBE claims government subsidies have been too low over the past 3½ years.
The foundation claims the remuneration for personnel alone is already NAf. 8 million too low, while no amounts for school maintenance, estimated at US $489,000, were included in the lump sum.
SVOBE contends the 2010-2012 arrears amounted to more than NAf. 5.5 million and are an estimated NAf. 2.9 million for 2014.
Attorney-at-law Richard Gibson Jr., the government's lawyer in the procedure, said the minister had offered to cover the shortfall for March and April as shown in the cash-flow analysis and had offered to arrange for a debt to GEBE to be paid directly by government. SVOBE refused this latest payment offer.
Gibson said historical financial overviews had been given, but future expenditure overviews were necessary and these had been presented only "on a scrap of paper." He also said some expenses reflected in the paperwork presented were paid directly by government and therefore should not have been included in the calculations.
SVOBE also was accused of not following the auditor's advice and of paying higher-than-required wages to teachers. "The minister wants to help, but does not believe the figure of NAf. 5.5 million is accurate," Gibson said. "It is not clear that SVOBE is dealing with its finances carefully."
"The minister does not want the schools to have to close. The lines of communication are always open," Gibson also said. "The minister wants to assess what is necessary per month in a detailed way."
This does not match SVOBE's hopes of financial security in the long term. The ministry wants to sit around the table each month and has instructed a research company to consult on what can be done differently.
Gibson added that the ministry did not want to give money without checking how that money was being spent.
"During talks, situations came to light that hadn't even been mentioned in the budget. This shows that SVOBE does not have its financial affairs in order. If SVOBE were to go bankrupt, it does not automatically mean that the schools will close. School closure is not a threat at this moment," he added. "There is no confidence in the financial management of SVOBE."
Judge Katja Mans will give her verdict on April 14.