Coalition Govt. spends almost $700M from Emergency Fund to meet routine expenses

Nov 03, 2017 News

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– AG General expresses concern, disappointment over continued abuse

By Kiana Wilburg

The guardian of the national purse, Auditor General Deodat Sharma, has flagged the APNU+AFC Administration for spending almost $700M from the Contingencies Fund to meet routine expenditure. Money from the Contingencies Fund is only supposed to be used to meet emergencies.
In his latest report which was laid in the National Assembly yesterday, the Auditor General stressed that the Constitution states that “Parliament may make provision for the establishment of a Contingencies Fund and for authorising the Minister responsible for Finance to make provisions from that Fund if he is satisfied that there is an urgent need for expenditure for which no other provision exists.”
The Auditor General further stated that the Fiscal Management and Accountability Act, clearly outlines the criteria that govern the use of the Contingencies Fund.
The Act says that the Minister can carry through with an advance from the Fund, when 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 sun 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…”
With that in mind, Sharma pointed out that according to the Statement of Receipts and Payments of the Contingencies Fund, amounts totalling $931M were drawn from the Fund by way of ten advances. The advances were for the Ministry of Public Infrastructure, Guyana Defence Force, Ministry of Public Health, Ministry of Agriculture and the Regional Democratic Council of Region Six.
Sharma said, “For the period under review, it is disappointing to note that nine advances totalling $696.3M were granted from the Contingencies fund to meet routine expenditure. Previous reports highlighted instances where the criteria were not fully met for the granting of some advances.”
In view of the foregoing, Sharma said that the completeness, accuracy and validity of the amounts shown in the Statement of Receipts and Payments of the Contingencies Fund for the year ended December 31, 2016, could not be satisfactorily determined.
The Ministry of Finance in response to the Auditor General’s concerns said that it continues to ensure that there is full compliance with the requirements of the Fiscal Management and Accountability Act as it relates to granting advances from the Contingencies Fund.

NO COMMON GROUND
For years, the Ministry of Finance has disagreed with the office of the Auditor General when it comes to instances of abuse of the Contingencies Fund. Finance Minister Winston Jordan has said from the inception that the Constitution deems the Minister as the sole individual who will determine the emergency for which he can dip his hand into the Contingencies 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.”
However, in the eyes of the Auditor General, the law is very clear about what constitutes an abuse.
He said, “We have our views at the Audit office and those at the Ministry of Finance have theirs. But mine is that there are clear conditions for the use of the Contingencies Fund. It must be urgent, it must be unforeseen, cannot be postponed without jeopardizing the public interest, and no other provision has been made for it.”
Sharma continued, “Those things have to be fulfilled for me. Now you cannot come later down the line and say to me that you had to buy this vehicle and so the money had to be taken from the Contingencies Fund. If you were doing proper budgeting you are supposed to know that and plan for it.”
The Auditor General added, “You cannot come now to say that I don’t know what was the purpose of the vehicle and I don’t know the circumstances under which you or a ministry really needed it and so I cannot call it an abuse. If you don’t purchase the vehicle, will it jeopardize the nation’s well being? And that is the critical question.”
Sharma also cited the use of the Contingencies Fund by the APNU+AFC Government for the Sussex Street bond. In this regard, the Auditor General said that he is still to see how the bond was “urgent, unforeseen and of great national importance.”
He said that the bond scandal is one issue that he intends to “vigourously pursue.”
Sharma added, “And you see how it this whole bond scandal turned out? No urgent medical supplies were there yet they turned around and use the Fund for it. But trust me, I will query it.”
The Auditor General did note that he cannot take action against the Finance Minister for the use of the Contingencies Fund. He said that under the Fiscal Management and Accountability Act, it is the Finance Secretary who has the power to take disciplinary action for abuse of that kind.
“But I doubt that is going to happen. That is like the Finance Secretary taking action against himself,” added Sharma.

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