Finance Secretary, AG must settle disagreement on abuse of Contingency Fund - PAC

Finance Secretary, AG must settle disagreement on abuse of Contingency Fund – PAC

Dec 14, 2016 News

By Kiana Wilburg
The Public Accounts Committee (PAC) has had it with the fallout between the Office of the Auditor General

Auditor General,
Deodat Sharma

and the Ministry of Finance over the supposed abuse of the Contingency Fund. As such, the Committee has asked that both parties settle the matter, once and for all.
The PAC said that the issue has been reported on by the Auditor General (AG), Deodat Sharma for years, with no remedial action being taken. It has also been a matter which attracted extensive discussion within the Public Accounts Committee – in some cases leaving it divided as to what really constitutes an abuse of the Fund to which the Finance Minister has sole access.
Sharma has said on several occasions that in accordance with the financial rules and regulations, there were certain criteria which had to be met before an advance was approved from the Fund. He made it pellucid that if an expense is to be approved, it must be urgent, unforeseen, and of great national importance.
The Auditor General maintained that some of the projects and programmes for which advances had been approved for over the years, including 2015, should have been foreseen and therefore, included in the annual expenditure of the agencies.
In many cases, the Committee said that it was not in agreement with explanations that used to be offered by the office of the Finance Secretary so as to justify why certain advances were made for certain projects over the years.
In the interest of ensuring transparency and accountability, the PAC wants the Finance Secretary Hector Butts and the AG to consult on the interpretation of the criteria as set out in the FMA Act for the approval for advances from the Contingency Fund.
In his latest report, Sharma criticized the Granger administration for dipping its hands into the Fund without having just cause. Sharma said that during the period under review, amounts totaling $799M were drawn from the Fund, by way of 24 advances. He said that it was disappointing to note that the advances continued to be granted, even though they did not meet the required criteria.
Kaieteur News was informed by the AG that he was left in a state of concern having learnt that eleven advances totaling $604M were granted from the Fund to meet “routine expenditure” for the year 2015.
But the Finance Minister, Winston Jordan, has since refuted those claims.

PAC Head, Irfaan Ali

Jordan asserted that he does not owe Sharma an explanation. In fact, he went as far as to say that Sharma’s views on the “abuse’ of the Fund do not matter.
Jordan had emphasized that the Constitution deems the Minister of Finance as the sole individual who will determine the emergency for which he can dip his hand into the Contingency Fund.
“In this, he does not have to consult with the Auditor General. Being a member of Cabinet, he consults with the Members of Cabinet…Whether the AG wishes to determine what I have done, whether it was an emergency or not, that is his interpretation. It doesn’t count under the law,” the Finance Minister had said.
He continued, “It is the Minister of Finance who determines that…so you can’t come six months afterwards and tell me that the motor car that I bought with money from the Contingency Fund is not an emergency.”
“You don’t know the circumstances that gave rise to the situation. He never came to me and asked me. I am the only person he can ask seeking an explanation on it, but I don’t have to explain anything to the Auditor General. I have to explain to the Parliament. So going around saying that the government can’t account for $600M or $500M or $400M is just playing to the gallery as far as I am concerned.”
The economist stressed that for last year, there was one request by the Government to access the Contingency Fund for the May to December period. He said that the request only represented 0.36 percent of its budget last year.
He said that requests and advances made for similar periods in 2011represented 4.8 percent of the budget; 2.77 percent in 2012; 1.13 percent in 2013; and 1.2 percent in 2014.
“For this year, there has been one request, and so shall it remain,” the Finance Minister asserted.

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2 thoughts on “Finance Secretary, AG must settle disagreement on abuse of Contingency Fund – PAC”

rs dasai December 14, 2016 at 10:23 am

And the AudGen has UN powers and not USA powers?
rs dasai December 14, 2016 at 5:59 pm

Hold on Guys. There is no fallout. The AG reports and advises and the Gvt studies and act as it deems appropriate. Who is this ‘economist’ being mentioned?

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