$962M unlawfully spent without meeting criteria – 2014 AG report

Oct 23, 2015 News

---

By Kiana Wilburg
The 2014 Auditor General’s (AG) Report has once again flagged the inappropriate use of the Contingencies Fund under the previous administration, as $962M was withdrawn without meeting the specified criteria.

The Contingencies Fund is a sub-fund of the Consolidated Fund, which is the main government account for expenditure and is used for emergency expenditure only.
In his latest report, Auditor General , Deodat Sharma said that in accordance with Section 41 of the Fiscal Management and Accountability Act of 2003 (FMA ), the Minister of Finance “may approve a Contingencies Fund Advance as an expenditure out of the Consolidated Fund by the issuance of a drawing right”.
He reminded however that the criteria require the Minister to be satisfied that: “an urgent, unavoidable and unforeseen need for the expenditure has arisen (a) for which no moneys have been appropriated or for which the sum appropriated is insufficient; (b) for which moneys cannot be reallocated as provided for under this Act; or (c) which cannot be deferred without injury to the public interest….”.
Sharma said that where any advance is made, a supplementary estimate must be laid before the National Assembly as soon as is practicable for the purpose of properly authorizing the replacement of the amount advanced.
According to the Statement of Receipts and Payments of the Contingencies Fund, the AG’s 2014 report said that amounts totaling $2.624 billion were drawn from the Fund by way of forty-six advances.
It said that previous reports highlighted instances where the criteria were not fully met for the granting of some advances. He said that there has been closer monitoring of advances issued out of the Contingencies Fund, resulting in only nine advances totaling $961.878M which did not meet the criteria.
These advances were for the extension works to the Labour Department Building, to meet expenses for the completion of the Citizen Security Work Programme, Construction of the floating Mobile Unit for the Guyana Police Force, to supplement inadequate funds for the operation of the automated fingerprint information system and to purchase medical and military kits for the force.
The Ministry of Finance indicated that it continues to ensure that there is full compliance with the requirements of the FMA Act as it relates to the granting of Contingencies Fund Advances.
The Audit Office, notwithstanding the aforementioned response, recommended that the Ministry of Finance adopt stringent measures to ensure that there is compliance with Section 41 of the FMA Act concerning the criteria for the granting of advances from the Contingencies Fund.
The 2013 Auditor General’s Report also reflected that that money was taken from the Contingencies Fund in breach of the nation’s fiscal laws.
Sharma noted in his report that for the year 2013, $510M was withdrawn from the Contingencies Fund which did not meet the specified criteria.
In his 2012 report, he had said that $95.661M in advances was drawn from the Fund but it did not meet the criteria.
Over the years, the abuse of the Contingencies Fund was a topical issue for A Partnership for National Unity (APNU) and the Alliance For Change (AFC) while they served as the Parliamentary opposition.
AFC Leader Khemraj Ramjattan had emphasized on several occasions that the National Assembly is the first device or mechanism for which emergency advances can be protected from abuse.
The politician had asserted, “The (PPP) has been abusing their understanding of the criteria of an emergency under the Fiscal Management and Accountability Act.
“When we run to the Fund it is only to be used for emergency cases, like if there is a serious flood in Mahaicony and we need to remove citizens, money would be used in that case. But I understand that they are using the Contingencies Fund to relieve the National Communications Network.
He had even appealed for the former President, Donald Ramotar, to assent to the amendment made to the FMA Act.
“The amendment seeks to clarify a part of the Act which has to do with officers who can be prosecuted for the abuse of the Fund. But it is the Minister (Former Finance Minister, Dr. Ashni Singh) we understand to be giving such directions.
“He gives the permission for the money to be used, and as such he needs to be held accountable. The (former) President, by not assenting to this amendment, is also condoning this and allowing criminality to continue.
“I am begging the people of this nation to understand that it is their money that is being abused and to realize what kind of government they had,” Ramjattan had said.
The Fiscal Management and Accountability (Amendment) Bill 2015 was tabled by Finance Minister, Winston Jordan in the National Assembly and was passed.

---

---