Latest update November 29th, 2024 1:00 AM
Late disbursement of Govt. funds affecting work of Municipalities & NDCs
Permanent Secretary in the Ministry of Communities, Emil McGarrell
Permanent Secretary in the Ministry of Communities, Emil McGarrell says he is following the law on the disbursements of funds for local municipalities and Neighbourhood Democratic Councils (NDCs).
There have been widespread criticisms that central Government is releasing the capital expenditure allocated through Parliament too late, and this in turn has frustrated the work of the local organs.
The PS faced a series of questions regarding the disbursements when he appeared before the Public Accounts Committee (PAC), since a number of local organs held unspent funds from government in special accounts.
In several cases, some organs received their final tranche on the last day in December, which was obviously way too late to execute a project earmarked for that fiscal year.
This meant that millions were rolled over into the new year. The local organs were mandated by law to return the funds to central government and resubmit their capital projects for approval. Some held on to the funds.
For instance, in 2016, the ministry budgeted $401M under capital subvention to the nine municipalities and 62 NDCs. By the end of that year, auditors found an unspent balance of $75.5M which was not refunded to the consolidated fund.
Mabaruma in Region One (Barima-Waini) had $4.7M left from the remaining sum of $10M at the end of 2016. Linden still has $12.8M remaining, which is unchanged from the end of 2016 and Rosehall Town which had a remaining sum of $11.3M at the end of 2016, still has $8.9M in a special account.
PAC Chairman, Irfaan Ali, made it clear that unutilized central government funds have to be returned to the consolidated fund at the end of the fiscal year.
McGarrell responded that approval was not given by the Financial Secretary. He stated that discussions are ongoing between the Audit Office and the Ministry of Finance to determine the correct approach to the unspent funds.
According to McGarrell, the concluding thought is that the ‘authority is with the local council to retain the funds’ based on Section 216 of the Constitution.
“These disbursements are made into the accounts of the local organs…once disbursed into the accounts it can only get out of the accounts by a resolution of council only, and many of them sought to retain the resources,” McGarrell explained.
Ali made the case that if the funds can be retained then there is no need to disburse it in tranches. He believed that all funds should be provided to the local organs at the start of the year.
McGarrell agreed that disbursing the funds in the last quarter basically makes it ineffective for the local organs to complete their programmes within the financial year, but noted that the Fiscal Transfer Act specifies how the monies should be disbursed.
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