Premier and Minister of Finance Dr. the Hon. D. Orlando Smith announced that the situation where vendors had to wait to be paid by government for goods and services is being handled. The BVI Leader announced that the $25M Line of Credit that was approved by the House of Assembly a few months ago to deal with the situation was not used.
There were numerous complaints last year and earlier this year about small business operations being affected because of money owed by Government for goods and services. However, Hon. Smith assured the House of Assembly on 22 September that Government is settling its bills within a one month time frame and outstanding debts are being paid.
In his answer to a question asked by Leader of the Opposition Hon. Julian Fraser, the Premier mentioned that the Treasury is now paying merchants, vendors, and other recipients of government funds in a timely manner. “Madam Speaker, all accounts payables in the Treasury Department are now current or no more than 30 days old,” Hon. Smith announced.
As it relates to the prompt payment the Premier explained that the process is reliant on proper billing; and he noted that vendors should ensure that all appropriate documents are provided. The Minister of Finance said: “I would like to note however that the speed at which bills can be paid is very dependent on when those bills and all supporting documentation are received by the Treasury Department for processing of payment.”
“In this regard I must urge creditors and Accounting Officers of the Government of the Virgin Islands alike, to ensure that requests for payment of products and services supplied to the Government of the Virgin Islands are accompanied by an authorized purchase order, and are submitted to the Treasury in a timely manner. This is to ensure that such payments can be made as expeditiously as possible,” he added.
Line of Credit untouched
Premier Smith also told the House on 22 September that the $25M Line of Credit that was approved by the House of Assembly a few months ago for the purpose of providing working capital support for the Government has not been tapped into.
The Opposition was outnumbered and out voted on 25 April when a division of the House of Assembly was called and the majority Government approved the Motion that establishes an Operating Line of Credit at the CIBC FirstCaribbean International Bank.
However, in response to a question from the Leader of the Opposition, Hon. Fraser Premier Smith explained that government did not use the fund which is available: “Madam Speaker the $25 million Operating Line of Credit is available to the Government of the Virgin Islands. However, we have not utilized funds from this facility as yet,” the Premier said.
Hon. Smith further noted that government did make use of five million dollars from the line of credit, but he disclosed that the money was returned: “Five million dollars was drawn down on closing the facility, but this drawdown was paid back within a few days as the Treasury has been able to reduce its current payables obligations through existing revenue,” the Premier said.
The $25M Line of Credit agreement between CIBC FirstCaribbean International Bank and the Government of the Virgin Islands stipulates that the Principal Repayment is to fluctuate from deposits until maturity, with an annual clean-down of any drawn balances for a period of three consecutive business days on each anniversary of the facility. It was further explained that the Line of Credit is essential, especially for small businesses that do business with Government.