Following a lengthy debate, the National Assembly on Thursday passed an amendment to the Fiscal Management and Accountability Act (FMAA) which removes the requirement that budgets for constitutional agencies be submitted directly to the National Assembly and be reflected as lump sum subventions in the National Estimates.
While the Opposition APNU+AFC argued that the amendment subjects constitutional agencies to executive control in violation of constitutional provisions for independence, the PPP/C government maintained that it actually brings the legislation in compliance with the constitution and particularly Articles 171 and 222A.
Thursday’s amendments nullify changes that had been introduced by the former APNU+AFC Government in 2015.
Minister with Responsibility for Finance, Dr Ashni Singh, who tabled the bill, said that it was “a simple bill which seeks to enact a few amendments designed to streamline the budget process to increase its efficiency and improve the effectiveness with which parliament can consider the budgets of these entities.”
The Fiscal Management and Accountability (Amendment) Bill 2021 repeals four parts of Section 80B of the principal Act, allowing for a review and approval of all appropriations, estimates and expenditures for constitutional agencies.
This section had been added to the FMAA by the APNU+AFC government in 2015 and required that the proposed budgets of constitutional agencies be submitted to the Clerk of the National Assembly by the Agency while the Minister of Finance would also submit comments on these budgets to the Clerk.
According to the Bill, the amendment “corrects the anomaly which gave the Clerk…certain functions in respect of budget proposals and the presentation of those proposals to the…Assembly by returning those functions to the Minister with responsibility for finance.”
According to the Explanatory Memorandum, the bill also amends Section 80B (5) by clarifying that not only must the detailed budget and appropriations be reflected in the Annual Estimates together with detailed Estimates of Revenues and Expenditure of the Constitutional Agencies but that budgets, appropriations, estimates and expenditures shall be reviewed and approved as part of the process of the determination of the national budget.
Previously, the budgets of these agencies were considered and approved as a lump sum prior to the debate on the National Budget.
Singh argued that “this two-stage process resulted in a fragmented and inefficient process for consideration of the National Budget and denied the Parliament an opportunity to view and consider the budget in a comprehensive manner.”
Thursday’s bill comprised seven clauses.
Clause 2 introduces a definition of a constitutional agency which shall be an “agency listed in the Third Schedule to the Constitution.”
Clause 4 amends Section 80A to provide that the format for the annual report shall be determined by the official in charge of the Agency in consultation with the concerned Minister and the Minister with responsibility for Finance.
Previously the Head of the Agency was only required to consult with the Minister of Finance on the format of their annual budget.
The final clause, Clause 7 amends the Schedule of the Act by inserting a number of agencies as budget agencies. These are the Chambers of the Director of Public Prosecutions, the Judicial Service Commission, Public Service Commission, Public Service Appellate Tribunal, Public Procurement Commission, Office of the Ombudsman, Guyana Elections Commission, Parliament Office, Supreme Court of Judicature, the Ethnic Relations Commission, the Human Rights Commission, the Women and Gender Equality Commission, the Indigenous People’s Commission, the Rights of the Child Commission and the Office of the Auditor General.
Collided
Singh told the House that the 2015 amendments rather than enforcing Article 222A actually collided with the provision and Article 171.
Article 222A prescribes that the expenditure of constitutional agencies shall be financed as a direct charge on the Consolidated Fund, determined as a lump sum by way of an annual subvention approved by the National Assembly after a review and approval of the entity’s annual budget as a part of the process of the determination of the national budget.
The finance minister stressed that since the framers indicated that the entity’s budget must be approved as “part of the process of the determination of the national budget,” it would be nonsensical to “carve” the appropriations out of that national budget.
Article 171(1) directs that unless recommended by a Minister the National Assembly shall not approve a bill or motion which imposes any charge upon the Consolidated Fund.
“The function of managing public finance, of achieving fiscal outcomes, rests with the Minister of Finance and government,” he stressed, while noting that the 2015 amendment violated that cardinal principle.
Singh repeatedly indicated that if the executive were to be held accountable for fiscal outcomes, it must have the authority to ensure achievement of those outcomes,
“If we want to exclude the executive from the consideration of a part of the budget then we need to exclude that part of the budget from any ceiling applicable to fiscal outcomes,” he contended while stressing that proper fiscal management requires unity and comprehensiveness which means the budget and its macroeconomic impact must be considered as a whole since it originates from a process which prioritizes competing calls on the public treasury.
Shadow Minister of Legal Affairs, Roysdale Forde disagreed with Singh’s rationale, telling the House that the bill clearly conflicts with the constitutional provisions which guarantee autonomy to Constitutional Agencies.
Speaking specifically about the Judicature, Forde reminded that Article 122A provides that all courts and all persons presiding over the courts shall exercise their functions independently of the control and direction of any other person or authority; and shall be free and independent from political, executive and any other form of direction and control.
“The bill seeks to turn back time…to revert to the days of executive control and abuse of constitutional agencies,” he maintained. A similar argument was raised by his APNU+AFC colleague Juretha Fernandes, who told the House that there is no justification for the bill other than the will of the governing party.
“This is not accountability. This is control,” she said, while specifically referencing the new requirement that both the subject minister and minister of finance shall have input into the budget of each agency.
Forde sought to differentiate between charges on the Consolidated Fund as provided for in Articles 222A and 171, arguing that 171 applies to those charges for which an appropriation bill is presented.
No appropriation bill, he said, had been brought for these agencies over the last three years.
This argument was attacked by Attorney General Anil Nandlall, who told the House that it was a sign of Forde’s inexperience with legislative procedure.
“He totally misunderstand how a lump sum operates. Totally misunderstands how an appropriation act operates. Mr Forde says that lump sum cannot be withdrawn with an Appropriation Act…Mr Speaker you can only get money from the Consolidated Fund by legislation. The legislation is called an Appropriation Act…it can only come from the treasury through an appropriation act approved by this House,” he asserted.
Nandlall stressed that the Minister of Finance must maintain the power to approve the charges on the Consolidated Fund.
