Despite 80 withdrawals from the Contingencies Fund over nine months in 2011, Minister of Finance, Dr. Ashni Singh did not comply with the fiscal management Act and this breach has been ignored in the latest report of the Auditor General, according to commentator, Christopher Ram.
In his Sunday Stabroek column, Ram said that Singh has never produced a supplementary document to the National Assembly for any of the about 15 supplementary appropriation bills that he has presented to the House as he is required to do under the Fiscal Management and Accountability Act (FMAA).
Commenting on the Auditor General Report on the public accounts for 2011 which was made public last week, Ram pointed out that the minister authorised 80 withdrawals from the Fund over a period of nine months, or an average of nine withdrawals per month. He said that the Audit Report does not acknowledge that the minister must report to the next sitting of the National Assembly on all advances made out of the Contingencies Fund, specifying the amounts advanced, to whom the amounts were paid, and the purpose of the advances.
Ram, a chartered accountant said that the minister must also come by way of a supplementary appropriation act and for the replenishment of the Contingencies Fund. “But so that the National Assembly is aware of the consequences of its decision, the FMAA imposes another requirement on the Minister: he has to state the reasons for the proposed variations and provide a supplementary document describing the impact that the variations, if approved, will have on the financial plan outlined in the annual budget,” Ram wrote.
“The requirement for a supplementary document applies to all financial papers, whether for the replenishment of contingencies or for a variation of the budget. Yet, Dr Singh has never once produced a supplementary document to the National Assembly for any of more than fifteen supplementary appropriation bills or so that he has presented to the National Assembly,” he said. “Regrettably the members of the National Assembly have failed to request of the Minister that he comply with the Act as a condition for granting him any money,” he added. Ram said that he has written to the Speaker of the National Assembly, Raphael Trotman and he has promised to address the omission with the minister.
The 2011 AG report released last week said that 15% of the $7.69B drawdown on the Contingencies Fund fell afoul of the required criteria. The advances from the Contingencies Fund which did not meet the criteria last year were $500M for the Ministry of Amerindian Affairs for the “provision of Amerindian development projects and programmes”, $120M for the construction of a new inpatient facility for the Ministry of Health, $25.5M for the Office of the President to cover expenses for national awards and other events hosted by the state and $500M for the Ministry of Public Works for consultancy, engineering and designs, procurement of four excavators and drainage and irrigation works. During the opposition’s budget cuts this year, the $25.5M allocation for the Office of the President was not approved.
The report noted that Section 41 of the FMA Act dealing with advances from the Contingencies Fund requires that the minister be 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…”
The 2011 report said that previous auditor general reports had “highlighted instances where the criteria were not fully met for the granting of some advances”. Some observers have expressed surprise at how the Auditor General’s report characterized the breaches. In previous reports, the Auditor General had cited what he called “abuse” while this year he simply said that the criteria were not fully met for the advances.
His 2010 report said “My previous reports highlighted the continual abuse of this Fund”. After a perusal of the 2011 report, the observers said that the 2011 report appears to have softened language on government breaches and addressed myriads of run-of-the-mill matters.
Ram, in his column, also said that the Audit Office not only consistently fails to report on important non-compliance by the Minister with the requirements of the FMAA, but also fails to pursue the actual spending of the sums from the Contingencies Fund. “Short of appointing a professionally qualified accountant to the position of Auditor General I see little prospect for better control and oversight of the Contingencies Fund,” he wrote.
Ram, also an attorney, said that the National Assembly needs to act in this matter and can do so in two ways. “The first is to reduce the amount of the Contingencies Fund which the PPP/C administration raised from $500,000 to what amounts to more than $3.5 billion.
If the Minister must come to the next sitting of the National Assembly for reporting and replenishment then $3.5 billion is an extraordinary sum. Reducing the amount – which requires a small legislative change – will introduce some level of accountability and oversight and rein in the Minister of Finance who seems impatient to bring supplementary appropriation bills to the National Assembly prior to spending,” he wrote.
“The second is to remove the amendment to the Constitution (Prescribed Matters) Act and return to the age limit of 55 years”, he said.
