Supplementary Provisions illustrate budget deceit

Dec 20, 2010 News

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– AFC

While it is alright for the Government to spend monies from the Contingencies Fund and then seek approval after, the supplementary provisions that are sought for each year demonstrate the fact that the budget every year is deceitful.
This is according to Chairman of the Alliance For Change and Presidential Candidate, Khemraj Ramjattan who said that for years his party has been saying that the budget that Finance Minister Dr Ashni Singh presents is misleading.
He said that the supplementary provisions that the government seeks every year are aimed at seeking to hide the extravagant and excessive spending which is incurred yearly.
Ramjattan opined that the government is seeking to hide the deficit that the government incurs each year, given that it is not presented in the budget but is expanded each year with the supplementary.
He said that the budget does not accurately represent what the government intends to spend each year.
According to Ramjattan, the budget represents one expenditure, but the government each year misrepresents the expenditure by literally billions of dollars and later seeks the remainder of expenditure through the supplementary provisions.
Finance Minister Dr Ashni Singh on Thursday last for the second time this year, moved to the National Assembly seeking approval for close to $7B in Supplementary Provisions.
The Minister tabled Financial Paper Three for 2010 seeking approval to spend almost $2 billion and Financial Paper Four seeking some $4.9 billion.
Among some of the allocations is a request to meet expenditure associated with the hosting of the Union of South American Nations (UNASUR) which was recently concluded.
That request was for $93,106,340.
Seventy million was requested by the Finance Minister on behalf of the Guyana Defence Force to “purchase accommodation items for the force.”
For the Guyana Police Force (GPF) there was a request for $30M to meet expenditure associated with increased fuel prices and the intensification of mobile patrols in and around the city.
Also for the GPF was a request for $24M to meet expenditure incurred during the ICC 20/20 World Cup Competition for the feeding of ranks.
That competition was held in April and May of this year.
As it relates to the Amerindian Development Fund there was a request for $198M in addition to an earlier voted provision of $100M.
There was also a request on behalf of the Office of the President for $224.6 million to provide security and ICT equipment to the National Intelligence Centre.
The Finance Minister requested $147.4M to set up an Educational Television Broadcast Service.
The Ministry of Housing and Water will receive in excess of $60M for the provision of water around the country.
There were also requests by several ministries under the headline “provision additional inflows”.
This request was to the tune of several hundred millions, such as $235M for the Finance Ministry, $140M for the Ministry of Education as well as $186M for the Ministry of Education.
There is also a $3.7 billion request for the Ministry of Housing and Water for the development in new housing areas and improvement to existing housing areas.
One hundred and fifty-three days after Guyana’s largest ever ($143B) budget was approved in the National Assembly, the Finance Minister had moved to the House seeking approval for an additional $2.4 billion in Supplementary Provisions.
The resort to Financial Supplementary papers has long been criticised.
Members of the Opposition have been questioning the validity of the manner in which the monies are used, given that the expenditure, according to them, does not fit the criterion.
Section 41 (3) of the Fiscal Management and Accountability Act says that the Finance Minister, who is the sole authority to do so, may make such a withdrawal, “when satisfied that an urgent, unavoidable and unforeseen need for expenditure has arisen:-
(a) for which no monies have been appropriated or for which the sum appropriated is insufficient;
(b) for which monies cannot be reallocated as provided for under this Act; or
(c) which cannot be deferred without injury to the public interest, and may approve a Contingencies Fund advance as an expenditure out of the Consolidated Fund by the issuance of a drawing right.”
The most recent controversy on the use of the Supplementary Provisions related to a $4B allocation to the Housing Ministry.
It was subsequently discovered that the monies were spent long before approval was ever sought.
Opposition speakers had called the money a bailout to the struggling Guyana Sugar Corporation when the Ministry had paid it over to purchase land in Diamond, East Bank Demerara, but from the details in the 2010 budget, it was evident that no developmental works were scheduled.

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