PNCR Shadow Finance Minister Winston Murray last Thursday reprimanded Agri-culture Minister Robert Persaud for not allowing the National Drainage and Irrigation Authority (NDIA) to maintain its own accounting records, thus breaking the law.
Persaud said the NDIA was still building capacity. In tempestuous exchanges as the consideration of the 2010 Estimates of Expenditure by the Committee of Supply continued in the National Assembly on Thursday, Murray quizzed Persaud on the mechanism for the disbursement of the $990 million budgeted for the NDIA.
In response, Persaud noted that the NDIA under the Act is supposed to be a self-accounting agency. However, he said it was still in the process of building capacity so the financial aspect of the NDIA is managed from the Central Accounting Unit (CAU) of the Ministry of Agriculture. He explained that the processing of payments would be done in the NDIA but then they would be sent over to the CAU where payments will be done.
Murray questioned whether the minister was not aware that as a body corporate, the NDIA ought to have its own accounts. He declared that this has been something hanging and “we’ve been getting this annual ritual of an explanation that they are setting up”. Murray, in asking Persaud why he refuses to have the NDIA function in accordance with the law that established it, noted that five years have gone by. He noted that in the last Auditor General’s (AG) report, the AG pointed out that the organization is required to maintain its own accounting records and the response was that the NDIA was currently building its capacity. “This is the heavy hand of politics in the NDIA,” charged Murray.
Persaud rejected Murray’s assertion. He stated that the accounting manuals have been developed and they have moved a far way in terms of developing the necessary systems so that they can manage the financial elements of the NDIA. The minister stated that the NDIA would be responsible for an enormous sum and the ministry wants to ensure that the necessary safeguards and systems are in place so that once this happens the authority will not falter in terms of adhering to regulations and laws.
But Murray pointed out that under the Financial Management and Accountabi-lity Act (Section 80), statutory bodies such as the NDIA are required by law to submit annual reports within four months after the close of the financial year. He charged that the minister, by his presence in the NDIA, is preventing the transparency that should accompany large expenditure undertaken by the NDIA from occurring. He asked whether Persaud was aware that “his failure to have this authority function independently relates to the failure of financial statements from that Authority being prepared in accordance with the law and therefore being subject to the scrutiny of the National Assembly which the law permits”.
In response, the minister stated that he disagreed with Murray’s statements. He said the NDIA is governed by a Board of Directors, which is in charge in terms of management and overview of the authority. He said he knew the matter was raised at the level of the AG and the Public Accounts Committee and “aggressive steps are being taken to give the NDIA the capacity so that it can truly become self accounting and be in full compliance with all the laws and the procedures that are being outlined for entities such as this”.
Persisting, Murray demanded to know whether Persaud intends this year to break the “cycle of illegality” which exists currently at the NDIA and to allow it to function independently as an accounting unit in accordance with the law. Persaud said that he was “not sure” what illegality Murray referred to stating that the “manuals and the systems that have been developed are currently engaging the attention of the cabinet sub-committee on finance. That is where the matter is at this point in time”.
Murray then proceeded to read a section of the Act which states that a statutory body – of which the NDIA is one – shall as soon as is practicable and in all events not later than four months after the end of the fiscal year established for that statutory body, submit an annual report to the concerned Minister. This, he said, is the law that is currently being broken because the NDIA is not in compliance with this Act.
Persaud, responding, said that annual reports are being provided by the NDIA to his office and “you will see some reference to the activities of the NDIA” in the annual report of the ministry.
But Murray, reading a section of the Act again, pointed out that what is required is that the format of the annual report shall… include a statement of revenue and expenditure of the statutory body for the fiscal or calendar year, a report prepared by the auditor general on the annual financial statements of the statutory body. “So to tell me that he receives information and… an annual report, does not comply with the law. He is not in compliance with the law,” he charged.
The minister responded that Murray is “not fully aware of the facts”, stating that all reports that are prepared and supplied by government agencies and semi-autonomous agencies follow a certain format “so what is stated there in the law is a given format which is required by any agency, so the NDIA is just one of many others and certainly they would be following that structure”.
If that structure is being followed, Murray asked, could Persaud could say whether the report has been prepared by the AG on the annual financial statements of the NDIA and within two months of the receipt of the annual report, has it been presented to the National Assembly. That is what is required but has that been going on, he questioned.
Persaud responded that the AG department is auditing the activities of the NDIA reiterating that the financial aspect of the authority is managed by the ministry’s CAU. He said that this means that when the AG department audits the ministry, it is also auditing the financial operations of the NDIA.