Violating the FMA Act is a criminal offence

Sep 14, 2014 AFC Column, Features / Columnists

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The Guyana Police Force has issued a statement that it found the complaint filed by Leader of the Alliance For Change

Khemraj Ramjattan against Finance Minister Dr. Ashni Singh not to be a criminal offence.
In this week’s column, we provide an excerpt from the complaint pointing to the clear violation of the Financial Management and Accountability Act 2003.

Section 16 of the FMA Act 2003 is a core provision which wholly endorses article 217 of the Constitution. It provides thus: “There shall be no expenditure of public monies except in accordance with article 217 of the Constitution.” Its marginal note is most instructive -”No expenditure without appropriation.”
There is thus this almost absolute rule which governs Guyana’s public finances. It is that there must be no spending without appropriation, or in other words, no spending without legislative authorisation. For every item of spending, there must have been some Parliamentary approved appropriation or authorisation.
This rule is very strict in the sphere of public finances in all Westminster-type democracies.  But it is subject to a constitutionally provided exception namely, that there can be spending without prior appropriation if there is an emergency situation, say for example the 2005 Great Flood.  However, once moneys are so drawn out of the Contingency Fund, which is a sub-fund of the Consolidated Fund, the Executive through the Minister of Finance must come to the National Assembly at the next following sitting and report how much he spent, to whom it was paid, and its purpose.
A Supplementary Appropriation Act covering these advances which were paid out will have to be approved by the National Assembly. So here there is a post facto legislative authorisation which must legitimise and regularise such spending. This happens when the situation is urgent, unavoidable and unforeseen.  But this kind of urgent, unavoidable and unforeseen circumstance must only see such expenditure totaling no more than 2% of the previous year’s Annual Budget. This very limited quantum of prior expenditure without prior appropriation emphasises the paramount principle of “appropriation before expenditure.” This contingency exception is provided for in article 220 of the Constitution and Section 41 of the FMA Act 2003.
To make it all the more emphatic and unequivocal, the existence of this rule of “appropriation before expenditure”, is the reason why sections 48 and 85 were provided for in the FMA Act 2003.
Section 48: “A Minister or official shall not in any manner misuse, misapply, or improperly dispose of public monies.”
Section 85: “An official who knowingly permits any other person to contravene any provision of this Act is guilty of an indictable offence and liable on conviction to a fine of $2,000,000.00 and imprisonment for 3 years.”
Criminal liability can befall the Minister of Finance or any of his underlings at the Ministry of Finance by a conjoint operation of sections 48 and 85 of the FMA Act 2003 if there was any spending of public monies without appropriation first had; or, spending not legislatively authorised post facto in the exceptional case of the “urgent, unavoidable and unforeseen” category of a contingency spending. This was exactly what the framers of the FMA Act 2003 wanted to criminalise. This was the context that informed the text of Sections 46 and 85.
The Annual Appropriation Act 2014 and Financial Paper No. 1 of 2014.
In the deliberation during the course of the Committee of Supply stage in the National Assembly, in the Annual Estimates of 2014, there were proposals for appropriations from the Consolidated Fund, among a huge number of others, for the following:
·    Current Estimates for Office of the President – Administration Services – $1.335 B,
·    Capitol Estimates for Office of the President – Administration Services – $3.846 B
·    Ministry of Finance – Policy and Administration Capital Estimates – $22.284 B
·    Ministry of Amerindian Affairs – Amerindian Development Capital estimates – $1.14B
·    Ministry of Public Works – Transport – Capital Estimates – $6.785 B
·    Ministry of Health –  Regional – (Specialty Hospital) – $1.352 B
These specific programmes made up of a number of line items were voted down, meaning that they were not legislatively authorised. So no expenditures could have been forthcoming from the Consolidated Fund to provide public monies for them. They totaled a sum of approximately $37B for the period ending December 31st, 2014.
Notwithstanding there being no appropriation for these programmes, which meant a total prohibition of spending thereon in accordance with the Constitution (Article 217) and the FMA Act 2003 (Section 16), the Minister of Finance went ahead and spent monies on these programmes which were by a majority vote in the National Assembly not voted for.
The Appropriation Act of 2014 will reflect that there was no appropriation for these programmes. The Appropriation Bill of 2014, however, reflects these sums proposed. Hence, there ought not to be any spending of monies towards these items under these heads and sub-heads. Such spending would mean a total disrespect and disregard of the Constitution and the FMA Act 2003; and, a frontal violation of section 46 and section 85 of the latter.
But such spending, though expressly prohibited by the National Assembly on these programmes and line items, is exactly what the Minister of Finance proceeded with. Notwithstanding no appropriation for these heads, as they are called, the Minster spent monies on them for the period ending June 16th, 2014 totaling an amount of $4.533B as is confessed to by Minister Ashni Singh, (without any circumstances of oppression  as to make it an involuntary confession), in the Financial Paper No. 1 of 2014. He obviously did so by authorising drawing rights through other senior officials of his Ministry.
He has spent monies without having obtained legislative authorisation therefor. He and these other officials in the relevant Ministries have expended $4.533B up to June 16th, 2014 without any appropriation therefor. This constitutes a misusing, a misapplication, or an improper disposal of public monies totaling $4.533B for a period up to 16th June, 2014. Such a violation contravenes Section 46 and Section 85 by virtue of knowingly permitting other persons to contravene the provisions of the said Act. From every indication this criminal violation will continue up to 31st December 2014.

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