$4B withdrawals from Contingency Fund failed to meet FMA Act criteria – Auditor General

Dec 28, 2020 News

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Kaieteur News – Withdrawals from Guyana’s Contingencies Fund for 2019 amounted to $4.150 billion but according to the Auditor General (AG), these did not meet the criteria set out in the Section 41(3) of the Fiscal Management and Accountability (FMA) Act.
The AG in his latest audit report explained that Section 220(1) of the Constitution explicitly states “Parliament may make provision for the establishment of a Contingencies Fund and for authorising the Minister responsible for finance to make advances from that Fund if he is satisfied that there is an urgent need for expenditure for which no other provision exists”.
The Minister at the time was Winston Jordan.
In accordance with Section 41 of the FMA Act, the Finance Minister “may approve a Contingencies Fund Advance as an expenditure out of the Consolidated Fund by the issuance of a drawing right”.
The criteria as stated in Section 41(3) of the FMA Act requires the Minister, 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 sum 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….”.
Further on, Section 22(1)(c) of the FMA Act states “the amount of an appropriation for any programme may not be varied under this section by more than ten percent of the total amount appropriated for the programme in the applicable appropriation Act”.
In addition, Section 22(2) states “the Minister shall include all changes to appropriations made pursuant to subsection (1) up to the end of the tenth month of the current fiscal year in an appropriation amendment Bill: otherwise any changes shall be made in accordance with Section 24”.
With that said, the AG explained that according to the Statement of Receipts and Payments of the Contingencies Fund for the year ending 31 December, 2019 amounts totalling $4.150 billion were drawn from the fund by way of seven advances to the Public Infrastructure Ministry, Agriculture Ministry, Ministry of Communities along with the Public Health Ministry and Region Six. (See figure 1.)
With regard to the Public Infrastructure Ministry, withdrawals were made on three occasions.
The first, it said was “to facilitate the execution of emergency sea defence works along critical sections of shoreline between the communities of Fairfield to Dantzig, Mahaicony, East Coast Demerara, Region Five.”
The second withdrawal was made to again “facilitate the executive of emergency sea defence works along critical sections of shoreline between the communities of Fairfield to Dantzig, Mahaicony, ECD, Region !. 5 and rehabilitation and upgrading measures are also required along multiple stretches of sea and river defences within Regions Two, Three, Four and Six including the islands of Wakenaam and Leguan.”
The final withdrawal, the Finance Ministry said was to “conduct major repairs to generators at Port Kaituma & Light Co. Inc.”
For the Agriculture Minister, it was stated that a single withdrawal was made to “increase in work programme by NDIA in an effort to reduce the likelihood of flooding and damage to infrastructure in critical areas in Region Four during spring tides and to negate the effect of widespread flooding in Region Five.”
Monies were given to Region Six to “purchase of fuel and lubricants to irrigate fresh water from Manarabisi and Black Bush pump stations to save the rice crop” while the Ministry of Communities received funds for the “provision for immediate funding to Central Housing and Planning Authority for land transferred by National Industrial and Commercial Investments Limited (NICIL).
And finally, monies were given to the Public Health Ministry to “vaccinate all eligible persons so as to ensure that herd immunity is obtained so as to prevent the transmission of Vaccine Preventable Diseases, ensure all pregnant women receive quality care, offer all postnatal women a contraceptive method, screen all child bearing women for cervical cancer once per year and reduce home delivery.”
While he noted no advances were taken during 2017 and 2018, the AG pointed out however, for the period under review, all seven advances granted from the Contingencies Fund were to meet routine expenditure and did not meet the criteria defined in Section 41(3) of the FMA Act.
In response to his claims, the Ministry simply stated that, “all the advances meet the criteria in keeping with Section 41 (3) of the FMA Act 2003.”
Nevertheless, the AG gave strict recommendations that the Ministry of Finance adopt stringent measures to ensure that there is compliance with Section 41 of the FMA Act regarding the criteria for the granting of Advances from the Contingencies Fund.

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