Govt. continues to access Contingencies Fund in breach of Law

Sep 27, 2014 News

…AG to hand over 2013 audit next week

Spending by government last year has been audited, and according to information received by this publication, there

Auditor General, Deodat Sharma

continues to be questionable access to the Contingencies Fund.
The 2013 Auditor General’s Report on the expenditure of government is in its final stage of preparation and is slated to be handed over to the Speaker of the National Assembly Raphael Trotman next Tuesday.
According to sources close to the Report, the Ministry of Finance has continued to access the Contingency Fund in breach of the requirements laid out in law.
Under the Fiscal management and Accountability Act, the Minister of Finance, “shall have sole authority for the release of moneys from the Contingencies Fund, which authority shall not be delegated. The Minister, when satisfied that an urgent, unavoidable and unforeseen need for expenditure has arisen –
for which no moneys have been appropriated or for which the sum appropriated is insufficient; for which moneys cannot be reallocated as provided for under this Act; or which cannot be deferred without injury to the public interest, may approve a Contingencies Fund advance as an expenditure out of the Consolidated Fund by the issuance of a drawing right.”
When the Auditor General’s Report is made public upon the resumption of Parliament, it is expected to document in details the fact that the Ministry continues to utilize the Contingencies Fund in breach of the legislation.
According to sources, a number of previous inconsistencies and breaches that have been highlighted over the years are expected to once again feature.
When the Auditor General’s Report is handed over to the Speaker, he will upon resumption of the sitting of the House, make it public after which it will be subject to intense scrutiny by the Public Accounts Committee.
That Committee will then make recommendations to the House based on its examination of the Report after which the Ministry of Finance will have 90 days to produce a Treasury Memorandum.
A Treasury Memorandum details how the various government agencies intend to address the various deficiencies and breaches identified by the Auditor General.
The 2012 Auditor General’s Report had highlighted among other things, the fact that advances continued to be issued from the Contingencies Fund which did not meet the required criteria for such advances resulting in millions being drawn from the Fund, and utilised to meet expenditure that did not meet the eligibility criteria as defined in the Act.
That Report had also highlighted a number of overpayments to contractors by various ministries, many of which were unrecovered for years.
According to the last Report, a significant amount of overpayments to contractors had occurred on measured works for contracts undertaken by Ministries, Departments and Regions during prior periods, with several Ministries and Regions facing serious challenges in being able to recover amounts overpaid on various contracts.
“In addition, some of these Ministries and Regions continued to have overpayments on various contracts during 2012 and prior years,” according to the 2012 report.
According to Sharma in his most recent report, “This continued trend coupled with no evidence to suggest that disciplinary action of any kind had been meted out to engineering or other staff involved in the assessment of works in progress, and the certification of progress payments is troubling and hints at management’s perceived inaction to remedy the current situation.”
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.
At present there is more than $700M owed to the Fund that cannot be replenished since the political opposition has withheld support for a number of advances made by the Finance Minister, but which did not find favour with the political opposition during the 2012, 2013 and 2014 financial years.
Former Auditor General, Anand Goolsarran, has said that the Minister is to be held responsible for what he calls a loss of public funds.
Approval in the National Assembly precedes any replenishment for the advances issued by the Finance Minister in any given year.
Between 2011 and July of this year some $700M has been disapproved by the House and as such has not been replenished.
According to Goolsarran, if a loss of public property should occur and, at the time of that loss, a Minister or official has caused or contributed to that loss through misconduct or through deliberate or serious disregard of reasonable standard of care, that Minister or official shall be personally liable to the Government for the amount of loss; Where the misconduct or disregard of the person is not the sole cause or the loss referred to, the person shall be liable to pay only so much of the loss as is just and equitable having regard to the person’s share of the responsibility for the loss.
If a loss of public property should occur and, at the time of that loss, a Minister or an official had nominal custody of that property, that Minister or official shall be personally liable to the Government for the amount of the loss.
Finance Minister Dr. Ashni Singh has insisted that there was no loss incurred by him over the years.