Our financial laws, rules and regulations are based strictly on the cash-basis of accounting. They assist the Legislature to monitor and control public expenditure and do not permit the roll-over of expenditure from one fiscal year to the next. As a result, all budgetary allocations lapse on the last day of the year, and all unspent balances of budgetary allocations have to be returned to the Treasury. If there is a need to continue a project after the close of the year, as in the case of multi-year contracts, funds have to be re-budgeted in the following year.
In this article, we examine the provisions of the Constitution and the Fiscal Management and Accountability (FMA) Act relative to the above, but more especially in the light of media reports indicating that on 30 December 2019 a Cabinet sub-committee ‘noted’ the proposed award of 57 procurement contracts for certain projects, the majority of which are new capital expenditure works which would roll over into 2020, as can be noted from the listing below. This follows an earlier report that that on 23 December 2019 the sub-committee had noted the proposed award of 54 contracts. The amounts involved in all these contracts have not been disclosed, except for construction of the Yarrowkabra Secondary School in the sum of $827 million. However, judging from the number of contracts approved by the Cabinet close to year-end, the total amount could run into tens of billions of dollars.