Saying government’s justification for spending $4.6 billion from the Consolidated Fund without parliamentary approval doesn’t hold water, financial analyst Christopher Ram is warning that the opposition parties could end up legalising the administration’s unlawful actions.
“The opposition in the National Assembly may consider that they face a dilemma. Can they now not approve those items of expenditure with which they had already said they had no difficulty? Or do they try to legalise by their approval actions that are in violation of the Constitution and decisions of the National Assembly?” Ram wrote, in a letter published in the June 22 Sunday Stabroek.
The government’s Financial Paper No 1 of 2014 – Statement of Excess on the Current and Capital Estimates totaling $4,553,991 for the period ended 2014-06-16, was laid in the National Assembly last Thursday by Finance Minister Dr Ashni Singh. The document details government’s expenditure of amounts cut from budget 2014, and the National Assembly will decide, at its next sitting, whether it approves the expenditure or not.
Of the total amount, $66.4 million went to the Government Information Agency (GINA), $32.6 to the National Communi-cation Network (NCN) and $306 million to the controversial Amerindian Develop-ment Fund (ADF).
Additionally, $225 million went towards the Student Loan Fund, while over $1 billion went towards the continuation of work on the Cheddi Jagan International Airport (CJIA) Modernisa-tion Project.
Singh said the decision to spend the amounts was based on a ruling by Acting Chief Justice Ian Chang to the effect that the National Assembly has no authority to cut the budget. He also said government’s decision is informed by provisions in the Constitution and the Fiscal Management and Accountability (FMA) Act.
However, Ram, a chartered accountant and attorney, contends that “no amount of legal linguistics can support any interpretation of any provision of the Constitution or the FMA Act that allows the expenditure incurred by the Minister of Finance for which he now seeks parliamentary approval.” He notes that the minister sought to use Article 219 of the Constitution, and sections 24 and 41 of the FMA Act to argue that the extra expenditure was warranted.
Article 219 of the Constitution allows Parliament allow the Finance Minister to withdraw money from the Consolidated Fund to meet expenditure for up to four months of the year or until the budget is passed, Ram pointed out. He notes, however, that Section 36 of the FMA Act limits such pre-budget spending to normal services.
Ram further argued that even if Singh chose to invoke Article 219 (2), which makes provision for statements of excess to be the subject of a supplementary Appropriation Bill, Article 219 (3) “suggests that ‘excess’ applies only to cases where the amount expended exceeds the amount appropriated by an Appropriation Act, or possibly where there is likely to be an insufficiency.
In the situation of Bill No 12, 2014 there was no appropriation but rather an express non-appropriation and this provision could hardly therefore be used as a justification of the expenditure under another guise.”
Meanwhile, Section 24 (1) of the FMA Act says, “any variation of an appropriation, other than those variations referred to in section 22, shall be authorised by a Supplementary Appropriation Act prior to the incurring of any expenditure thereunder.” Ram argues that government cannot use this provision to justify its actions, “since there has been no appropriation for the programmes on which the minister expended public monies for which he now seeks approval. It can be argued that this section does not help him.”
In trashing Singh’s reliance on Section 41 of the FMA to justify the expenditure, Ram points out that the section deals “specifically with the Contingencies Fund.” He notes that each attachment to Financial Paper No 1 is headed “Statement of Excess,” which is an entirely different concept.
“In my view, the most relevant Article of the Constitution and the section of the FMA Act were overlooked or ignored by the government and its Attorney General, whether by accident, which I doubt, or by design,” Ram offered.
Ram also cites Article 217 of the constitution, which outlines the conditions under which money can be taken from the Consolidated Fund, and Section 16 of the FMA Act, which states that money should not be spent except where the conditions laid out on Article 217 are satisfied.
Ram, however, says that despite government’s “abuse of the Consolidated Fund” some of that which was spent was so done on areas the opposition parties – APNU and AFC – have said they have no problem approving if government came back with requests for supplementary amounts.” While noting the conundrum the situation creates for the opposition—to approve the spending as well as government’s violations of the constitution and the National Assembly’s decision—Ram also observes that a vote against the bill would create an unprecedented situation. “If that happens we have a serious constitutional financial issue where $4.6 billion from the Consolidated Fund has been spent without approval.”
Ram also highlights possible scaremongering by government. He notes that for several months various members of government have been speculating on the implications of the budget cuts. As it relates to the Student Loan Fund, in particular, government officials have been telling members of the public that students may not be able to access loans to attend the University of Guyana (UG) this year because the opposition parties cut it from the budget.
Government did this, he says, knowing that it was spending or planning to spend the cut amounts. “We now know that the tears and lamentation were those of the crocodile and that while pretending to cry wolf and wipe tears, the government was systematically and fragrantly violating unanimous decisions of the National Assembly not to approve expenditure under particular programmes,” he says.
