Last Monday was Budget Day, and I took the opportunity of outlining the budget procedures. I also examined a number of issues in the aftermath of the 2012 budget experience. I referred to the Chief Justice’s ruling and expressed the view that the National Assembly was wrong to alter the proposed budget on the Ethnic Relations Commission since the latter is a constitutional body. However, recourse to the Contingencies Fund to restore other aspects of the budget affected by the cuts, not only undermines the Assembly’s authority to approve of all public expenditure, but it also places the Minister of Finance in an extremely difficult position to justify that the criteria for authorizing advances from the Fund have been met.
I also commented on Article 218 requiring Parliamentary approval of all revenues and expenditures of the country, and I stated that any expenditure from such revenues without such approval is a violation of the said article. In addition, with at least 70 per cent of public expenditure relating to the acquisition of goods, and services and the execution of works, there is an urgent need to appoint members of the Public Procurement Commission to oversee all government procurement and the functioning of the various tender boards and their respective evaluation committees. It is no secret that there is huge public dissatisfaction in the way contracts are awarded and in the quality of works executed.
Today, we continue our discussion on Guyana’s budget process.
Reflections on last week’s article
I received a number of positive feedbacks on last week’s article, especially as regards the quote from the great Indian epic, the Mahabharata, which is the story of the conflict between materialism and philosophy. I had wanted to include from the same story another quote that has been resonating in me for some time:
If a brave man kills his opponent by treachery, he will never be able to face his soul. The soul is not the battlefield from which he can run away.
It has wider application for all forms of wrongdoing. The soul is our conscience, and like our shadows, it will follow us wherever we go. We must endeavour to ensure that our thoughts, words and actions are such that we can walk with our heads high, look at each other in the eye, and never watch over our shoulders to see who is looking at us.
My younger daughter reminded me that my readers come from different religious backgrounds and that I should refer in my writings to other religious texts. However, it is to my eternal regret that I have little knowledge of such texts. Nevertheless, I believe that all religions teach us the same things: in the words of Buddha, do good and be good, and this will take you to freedom and to whatever truth there is.
A professional colleague indicated to me that he had a concern about the statement I had made that, like the Finance Director of a company, the Minister of Finance has to “go back to the drawing board and rework the budget” to the satisfaction of the National Assembly, if the latter is not satisfied with it. What happens if the Minister chooses not to do so? The Finance Director is likely to have his/her services terminated promptly. However, the Assembly can only pass a vote of no confidence in the Minister. But what happens to the budget? The Assembly will have no alternative than to vote for the necessary amendments whether they result in an increase or decrease in the budget.
I do not consider that the Assembly’s only option is to reject the budget in its entirety since this course of action is not in the national interest. Besides, regardless of how one tries to interpret the Constitution, one needs to reflect on the principle involved.
I do not believe that the framers of the Constitution meant that the Assembly must either approve or disapprove of the budget. This is why there is a debate when the budget is presented. Otherwise, the whole exercise is meaningless and a waste of taxpayers’ money.
At the end of the debate, if there is merit in the Opposition’s arguments for amending the budget, the Government side should acknowledge this and proceed to advise the Minister to make the necessary amendments. In this way, the House will be unanimous in its support for the amended budget. The Government side should not take a hard-line position and say, “This is our budget, and nobody must tamper with it unless we agree”, for such an approach will be counter-productive. This apart, it is a fallacy to suggest that it is the Government’s budget. Rather, it is the budget of the State, for which the combined Opposition, with its majority in the National Assembly, arguably should have a greater say.
The Opposition, on the other hand, should not seek to abuse the powers vested in it by objecting to expenditures that are clearly in the national interest. I was taken aback by a statement a key Opposition member had reportedly made that the Opposition would not be inclined to approve allocations under the Ministry of Home Affairs while Minister Rohee is at the helm. Whatever difficulties the Opposition has with the Minister, the solution is not to deny allocations to his Ministry, especially those relating to current expenditure, bearing in mind also that the Ministry includes the Police, Prison and Fire services.
I do not subscribe to the combined Opposition being described as “a one-seat majority” in the same way that the Government should not be labeled “a minority by one seat”. In any democracy, a winner is a winner even by the slimmest majority, and the same applies to the loser. From now on, we must exercise maximum restraint in terms of these descriptions if we are to heal the wounds in the aftermath of the 2011 elections. The electorate has spoken in a way that is unprecedented in the history of our country, and we must respect this and use our best endeavours to find compromises. Life is about making compromises.
Second, Parliament makes laws, and the Executive i.e. the Government executes them. The Appropriation Act, which flows from the approved budget, is a law. The Executive cannot seek to twist the arm of the Legislature to pass a budget with which the latter by majority has difficulties. Mature economies are unlikely to allow for the outright rejection of a budget even in the midst of stubborn resistance to amendments, regardless of how justifiable they may be. At the very last minute, a compromise is reached, as we have seen recently in the case of the Government of the United States and the Province of Ontario in Canada. In its 66 years of existence, the General Assembly of the United Nations, comprising 192 Member States, has always reached an agreement on the UN’s biennial budget even if the session is extended beyond midnight of the 31 December of the close of the biennium.
Timetable for approving the budget
Good financial management practice will dictate that the budget for a particular year should be approved before the year commences to avoid the risk of incurring certain expenditures, only to realize subsequently that Parliament did not approve of them. While the Constitution allows for the outer limit of 90 days of the commencement of the fiscal year for the presentation of the budget, the FMA Act anticipates that the Minister will finalise and present the budget to the Assembly before the commencement of the fiscal year to which it refers.
One hopes that the 2014 budget will be presented in time for the Assembly’s approval by the close of the 2013 fiscal year. In addition, it is desirable for the Assembly to be in receipt of the latest audited public accounts along with the related report of the Public Accounts Committee (PAC). This will assist the Assembly during the consideration of the budget and in the debate that follows. As it now stands, we are in 2013, and the PAC is still deliberating on the 2010 public accounts.
Need for expert body to examine the public accounts and the budget
Once I was in discussion with the Speaker, and I suggested to him that, in addition to the PAC, we should have an expert body to examine the public accounts and the related report of the Auditor General as well as the Country’s budget prior to its approval by the National Assembly. In the UN, that body is the Advisory Committee on Administrative and Budgetary Questions (ACABQ). It comprises 16 members who are experts in the field of public finance and administration, and they function in their individual and professional capacities, and not as representatives of their respective countries.
Once the auditors finalise their report, the ACABQ immediately begins its examination of it. Both the auditors and administration officials testify separately at the hearings, at the end of which the ACABQ prepares and submits its own report to the General Assembly (GA). The Fifth Committee of the GA (equivalent of the PAC) then meets and examines the ACABQ report along with the auditors’ report after which a GA resolution is passed, usually endorsing the recommendations of the ACABQ and the auditors. The resolution becomes binding on the part of the Administration for years to come.
All of this happens before the next budget cycle begins. Armed with the previous biennium’s audited accounts, the auditors’ report, the ACABQ’s report and the GA resolution, the GA is in a better position to examine the budgetary proposals of the Administration but not without a thorough review by the ACABQ and reporting to the GA.
In Guyana, the PAC is a political body whose members may not have the desired level of technical and professional competence in financial management and budgetary matters. This, coupled with the fact that the PAC takes considerable time to produce its reports, would suggest that the time is ripe to implement a model similar to that of the UN.
