Former Auditor General Anand Goolsarran says that monies cannot be transferred from the Guyana Geology and Mines Commission (GGMC) to the housing authority as the government has been seeking to do for the last two months.
In his accountability column in yesterday’s Stabroek News, Goolsarran also raised questions about the credibility of the government on this matter as three different reasons have been given so far as to why the movement of $3 billion to the Central Housing and Planning Authority (CH&PA) was needed.
In January this year, the GGMC and the CH&PA drew up a loan agreement for the $3 billion to the latter but once this was exposed in Stabroek News and other media it sparked condemnations and opinions that the transaction was improper.
Cabinet then changed tack and decided that the $3 billion would be transferred directly from the GGMC to the CH&PA. However, legal advice solicited by the GGMC from Cameron and Shepherd found that the GGMC could not be instructed to transfer the sum and that the inscribed intention for the use of the funds – housing – was not catered for at all in the declared functions of the GGMC.
The GGMC is now said to be seeking further legal advice on the matter.
Goolsarran argued that if the GGMC is in possession of funds surplus to its requirement it has to transfer the amount to the Consolidated Fund, as it did during the period 2006 to 2011.
It is then for the National Assembly to decide through the budget process whether to approve of funds for the CH&PA, Goolsarran said. He said that with the dissolution of Parliament and elections due on 11 May 2015, it is unlikely that the 2015 Appropriation Act will be in place until the second half of the year and the government doesn’t seemed to be prepared to wait for this.
He listed the various violations that would occur were the government to proceed with trying to access the funds from the GGMC.
“Article 216 of the Constitution provides for all revenues or other moneys raised or received by Guyana to be paid into the Consolidated Fund, including those of authorities created by specific Acts of Parliament, otherwise known as statutory bodies. However, these entities are permitted to retain such revenues only for the purpose of defraying expenses relating to their operations. GGMC is a statutory body, created in 1979 by Chapter 65:09 of the Laws of Guyana. It is therefore obliged to pay all surplus funds over to the Consolidated Fund. Any decision or instruction to the contrary would violate Article 216.
“Section 6(3) of the GGMC Act provides for `Where there is a deficiency in the funds of the Commission, such deficiency shall be met out of moneys provided by Parliament’. Section 20 also refers to the maintenance of a reserve fund and for the Minister to approve of periodic transfers to this fund from surpluses made from time to time. If, however, the balance of the reserve is insufficient to meet a loss incurred in any one year, the amount of the deficiency is charged to the Consolidated Fund. When the GGMC returns to financial health, the deficiency has to be repaid. On a matter of principle, therefore, if losses of the GGMC have to be made good from the resources of the Consolidated Fund, it follows that any accumulated surplus will have to find its way to that Fund. Nowhere else!
“In terms of public expenditure, Article 217(3) specifically states that `No moneys shall be withdrawn from any public fund other than the Consolidated Fund unless the issue of those moneys has been authorised by or under an Act of Parliament’. The financial resources of the GGMC constitute a public fund, and neither the GGMC Act nor any other Act permits the transfer of funds to any other entity. Again, any decision or instruction to the contrary would violate Article 217(3).
“Finally, the above constitutional requirements are reinforced in a more detailed way in the relevant sections of the Fiscal Management and Accountability Act,” Goolsarran asserted.
He also questioned the credibility of the government over the varied reasons given for the use of the $3 billion. Goolsarran pointed out that the aborted loan agreement stated that the $3 billion “is pivotal to the realization of the Government of Guyana’s strategic target of allocating 30,000 lots under the Adequate and Affordable Housing Programme in order to maintain momentum in the provision of service land in several areas on the East and West Demerara.”
Once the loan was abandoned, the Cabinet document for the direct transfer, which was seen by Stabroek News, stated that the $3 billion was to support the development of housing infrastructure projects in mining communities and other areas where miners settle.
Goolsarran said the matter was made murkier last Tuesday when former president Bharrat Jagdeo said at a PPP/C press conference that the $3 billion was really needed for the Guyana Sugar Corporation and would be payment for lands that the CH&PA would purchase from the embattled sugar company.
Accusing the opposition of starving the sugar industry, Jagdeo said at the press conference “There is no Parliament now and we know that GuySuCo needs help…the account now earns less than 2% so they (GGMC) are getting a commitment investing this money that will bring greater return to GGMC, we then help GuySuCo to get over their difficult period”.
Goolsarran stated that it was unclear in what capacity the former president made the disclosure and what his locus standi was on the matter. He added that the former president’s disclosure about the use of the $3 billion “contradicts the statement by the Cabinet that the transfer relates to the development of housing infrastructure projects in mining communities. If what the former president said is true, then the Cabinet is engaging in an act of deception as it relates to the use of public resources. So far, three different explanations have been provided as to the reason for seeking to access funds from the GGMC.”
