Each work has to pass through these stages – ridicule, opposition, and then acceptance. Those who think ahead of time are sure to be misunderstood.
Swami Vivekananda
As the New Year was about to unfold, we took a break from examining the 2011 Auditor General’s report to reflect, as a nation, on where we would like to be in twelve months’ time. We considered the need to change our political behaviour, given our experience in 2012. The politics of confrontation needs to be replaced with one of goodwill, mutual respect, and a genuine effort to find compromise solutions where disagreements persist. I am happy that President Ramotar echoed similar sentiments in his New Year’s message and that the Minister of Finance is now in dialogue with the Opposition parties as part of the 2013 budget preparation process.
Today, we continue our review of the 2011 Auditor General’s report by considering current expenditure of the Ministry of Finance.
Employment costs
Expenditure on contracted employees amounted to $265.243 million or 72.5 per cent of the total expenditure on employment costs (inclusive of $107.8 million shown as non-pensionable employment). There was, however, no commentary from the Auditor General although there is widespread concern that the extensive use of contracted employees for regular posts undermines the traditional Public Service. The solution appears to be a reversion to a professionalised Public Service with unified pay scales and grades.
The expenditure on the revision of wages and salaries, which amounted to $3.456 billion, relates to salary increases for the Public Service as a whole. The original budget reflected this amount but the practice has been to make payments close to Christmas, retroactive to the beginning of the year. There appears to be no valid reason for not making payments immediately after Parliament approves the budget.
Subsidies and contributions
The report did not give a complete breakdown of the amount of $6.715 billion shown as subsidies and contributions to local organizations. It, however, referred to six entities – Statistical Bureau, State Planning Secretariat, CANU, National Procurement and Tender Administration Board, and the Financial Intelligence Unit – which are not separate legal entities and therefore their expenditures should have been met under the various line items. This long-standing issue has the effect of circumventing the regular public service pay scales through the payment of enhanced salaries and other conditions of service.
When the employment costs of these departments are taken into account, the disparity in wages and salaries within the Ministry becomes even greater.
Electricity charges amounted to $3.714 billion, and in all probability, the greater portion of this amount relates to subsidies to Guyana Power and Light (GPL). Despite these subsidies, the cost of electricity remains very high, not to mention the uneven quality of the service. When I was living in New York, my monthly electricity charge was about US$40 for top quality service. Here in Guyana, I am paying the equivalent of US$80 for basic services!
The Lotto funds
The Auditor General referred to previous reports highlighting the failure to pay over to the Consolidated Fund proceeds from the Guyana Lotteries. However, he accepted the opinion of the then Attorney General that there is no legal requirement to do so. I am not alone in my disagreement on the retention and use of the Lotto Funds without Parliamentary approval. In its report for 2000-2001, the Public Accounts Committee (PAC) concluded that “This practice, apart from being a breach of Section 17 of the FAA Act as well as a usurpation of Parliamentary authority to incur expenditure, can and probably does lead to irregularities.” Since the composition of the PAC mirrors that of the National Assembly as a whole, the Government side was in the majority when the PAC made this statement.
Years ago, when the former Attorney General was a member of Cabinet, the Government had agreed to make transfers at the end of each year to the Consolidated Fund to the extent of funds utilised from the Lotto Funds. At the same time, a corresponding supplementary estimate would be laid in the National Assembly to ensure Parliamentary approval of the expenditure. In this regard, in 2001 and 2002, the Government transferred amounts totalling $211.717 million and $208.770 million respectively to the Consolidated Fund. It, however, reneged on its agreement, as no further transfers were made to the Consolidated Fund for subsequent years.
A judicial review was sought on the matter. However, it is not clear on what grounds the matter was recently thrown out. We therefore have to await the written ruling of the Judge. Meanwhile, the plaintiff has indicated that he would be appealing the ruling. It is therefore premature for anyone to consider that the matter has been conclusively decided upon, and to make disparaging remarks about those who disagree with the Government’s handling of the use of the Lotto funds.
An essential aspect of the Auditor General’s work relates to his reviews of government operations for compliance with applicable laws, although he may not be a member of the legal profession. It is for this reason that the Auditor General is considered a “quasi” lawyer.
Understanding the law should not be viewed as the exclusive preserve of the legal profession, especially as regards matters relating to public management where significant inputs are usually sought from the Auditor General in relation to the passing of new legislation or in amending existing legislation.
Two examples will suffice – the Constitutional Amendment Act 2001 and the Audit Act 2004. The current Attorney General has displayed more soberness when, in his press release, he reportedly acknowledged my long-standing views on the matter.
In a previous column, I had concluded that:
Putting aside all the legal ramifications, on a matter of principle, all public moneys should be deposited into the Consolidated Fund as the taxpayers’ fund, and no public expenditure should be incurred without the consent of the elected representatives of the citizens of Guyana, that is, Parliament. If the laws are not clear on these matters, then let us amend them to make them clearer so that the above fundamental principle in public finance and administration is respected and observed.
NICIL
The Auditor General reported on the status of NICIL’s audit: 2002 to 2010 were completed and the related reports to 2005 were issued. With a little extra effort, the reports for the years 2006 to 2010 could have been issued in time for the finalization of his 2011 report to Parliament, especially since Parliament was in recess at the time. It is important to emphasise that achieving the deadline for the issuance of an audit report should not be at the expense of ensuring thorough and comprehensive audit coverage and reporting of the results.
This apart, the Auditor General stayed clear of any commentary on NICIL’s failure to pay over state revenues into the Consolidated Fund, and to use such revenues to meet expenditure without Parliamentary approval. At a public forum, he had indicated that he would have revisited the issue.
Clearing of advances for
overseas travel
A total of 124 conference advances valued at $55.791 million remained outstanding for the period 2004 to 2010. At the UN, officials are required to clear electronically their advances for official travel within two weeks of the completion of travel, failing which the advances are deducted from their salaries. We need to take a similar approach to avoid advances remaining outstanding for unduly long periods.
Review of the
operations of NPTAB
The report highlighted the absence of District Tender Boards for Neighbourhood Democratic Councils; the non-establishment of the Public Procurement Commission; and the failure to publish in NPTAB’s website the award of all contracts between $200,000 and $15 million, due to procuring entities not informing the NPTAB of the awards.
These are not new findings and are essentially a reproduction of the related paragraphs in the 2010 and earlier reports. The 2010 review was more detailed and covered a number of other areas, such as the failure of members of the various tender boards to file financial returns with the Integrity Commission; the non-establishment of a formal Bid Protest Committee; and the failure to exercise due diligence in ensuring that evaluators had the requisite expertise. It is unclear whether remedial action was taken in relation to these matters to justify omission in the 2011 report.
Other matters
The Auditor General reported on the status of action taken on two frauds uncovered at Region 1 and the Accountant General’s Department amounting to $215.762 million. There is also a section, uplifted in its entirety from the 2010 report, dealing with Integrated Financial Management Accounting System (IFMAS) where it was reported that: (a) the purchasing, and asset and inventory modules had not yet been activated; (b) several agencies did not maintain essential records; and (c) there was inconsistency of input of data into the system.
To be continued
