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Address the crisis but keep the receipts — IMF to Govts on COVID-19 expenditures
In a special series on fiscal affairs, the International Monetary Fund (IMF) called on governments across the globe “to do what it takes” in launching emergency measures to address the adverse impact of the COVID-19 pandemic on people.
Ocean View Hotel, which is being converted to an infectious disease facility.
However, IMF is warning governments to “but to keep the receipts.”
The financial institution, which provided emergency assistance to more than 59 countries facing the magnitude of the economic and health crisis due to COVID-19, has stressed on the need for transparency in expenditure.
According to the IMF, commensurate with the massive fiscal support packages is a variety of revenue and expenditure measures- additional expenditure on healthcare, cash transfers to households and businesses, loan guarantees- and equity injections.
Noting too the misuse of funds during humanitarian crises are common, the IMF said fiscal transparency, public accountability, and institutional legitimacy are the main pillars of “keeping the receipts.”
It provides guidance and best Public Financial Management (PFM) practices, drawing on cross-country examples.
For example, in 2015, the Sierra Leone Auditor General released an audit of domestic donations made to the government for the Ebola relief effort providing evidence of mismanagement by public officials in the distribution of these funds.
Payments for supplies and sensitization efforts were duplicated and undocumented, money was paid out to private individuals rather than to organizations and procurement procedures were widely disregarded.
Audits of international development organization spending showed there was also failure to provide rightful healthcare workers’ salaries and bonuses which were paid out to private individuals by those charged with distribution.
In the United States, corruption and misuse of funds in the wake of Hurricane Katrina in 2005 and Hurricane Maria in 2017 have led to more than a thousand prosecutions, the ousting of government officials, and the adoption of new practices by U.S government agencies to reduce such vulnerabilities. Transparency and public accountability play a crucial role in this respect, the IMF said.
While the Guyana’s Government did not apply to IMF for emergency funding, they have received flak on the local front for its initial spending on COVID-19.
For one, Government‘s flagship infrastructural project is a sanatorium costing in excess of US$5M.
Additionally, President David Granger had issued an order under the Public Health Ordinance which allows him, in the case of emergency, to expend public funds such as may be necessary for the effective carrying out of any and all of the provisions which concern notable infectious diseases—another reason for concern about public spending.
As a result, Auditor-General (AG) Deodat Sharma told Kaieteur News that his office intends to conduct a special audit of all COVID-19 expenditure, with special focus to be placed on government’s flagship infrastructural project.
Added to that, Kaieteur News had observed several projects being undertaken which had not shown up in newspaper’s weekly coverage of the National Procurement and Tender Administration Board (NPTAB).
Sharma had addressed the issue. He noted that a section of the Procurement Act applies in cases of emergency. Section 28 (c) of the Act allows the Government to engage in single-source procurement “owing to a catastrophic event, [where there is] an urgent need for the goods, services or construction, making it impractical to use other methods of procurement because of the time involved in using these methods…”
However, the AG stated that due diligence checks must still be carried out with regard to such expenditure. He noted his office has sent out circular to all public agencies indicating a need for separate accounts to be kept for all money received and spent during this time.
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