The 2018 Memorandum of Understanding (MoU) between the Ministry of Education and the GTU to activate a 2011 revolving fund for teachers’ housing has been declared not “legally enforceable” by the Office of the Solicitor General.
The information was contained in the March 11th, 2022 Treasury Memorandum (TM) issued by the Ministry of Finance and circulated in the National Assembly on Wednesday last. The Treasury Memorandum was in response to the report of the Public Accounts Committee of Parliament on the Public Accounts of Guyana for the year 2015.
The PAC’s report was adopted in the National Assembly on December 13, 2021, and the TM contains the government’s comments as well as actions it has taken or intends to undertake in response to the findings in the report.
The PAC’s report was prepared following the examination of the 2015 Auditor General’s report.
In the 2015 Auditor General’s report, the question was raised about the fund along with a recommendation that the Minis-try of Education engage the Finance Secretary with regard to its position.
“In 2011, approval was given for the establishment of a Housing Revolving Fund. Three cheques valued at $200M were drawn on 5 January 2012 and deposited into a special bank account No. 0162600406002 held at the Bank of Guyana. On 30 April 2015, an agreement was signed for a joint account to be set up between the Ministry and Guyana Teachers’ Union (GTU). At the time of reporting in September 2016, the Ministry had not established the joint account and no disbursements were made from the special bank account,” the 2015 report had said.
Following the release of the report, then Finance Secretary Dr Hector Butts told the Public Accounts Committee that no disbursement had been made from the Fund because there was no suitable agency to manage it. He had further stated that the Student Loan Agency was looking at managing the fund, however, this never came to fruition.
In the March 11, 2022 Treasury Memorandum, the Ministry of Finance said “…the current status of the Revolving Fund for Teachers, the HoBA (Head of Budget Agency) stated that a Memorandum of Understanding (MOU) was executed between the Ministry of Education and the Guyana Teachers’ Union on 24th October 2018. The MOU fundamentally sets out the framework for providing certain benefits for teachers, inclusive of a revolving fund to provide loans for teachers.
“The HoBA further stated that the Ministry of Education wrote the Office of the Solicitor General, which responded on 30th October 2021 advising that the MOU is not a legally enforceable document and is composed mostly of optimistic aspirations between the parties affixing their signature to its terms. While recognising that the intention was a noble one, the quintessential fact is that the Ministry and the Union do not have the legal and regulatory framework or administrative capacity to administer such a Fund, which is more than $200,000,000.00 (two hundred million) dollars.”
The TM added that the Solicitor General opined that the Fund would either have to be administered by a Financial Institution, a Credit Union, or through the creation of a Trust. The Solicitor General also advised that the services of a Financial Institution be retained but cautioned that this is likely to come at a prohibitive cost and that the better choice will be an MOU with the Public Service Credit Union.
Nevertheless, the Minis-try of Finance said it “…takes cognisance of the recommendations proffered and will consult the Office of the Solicitor General to bring closure to this matter which has been in an indeterminate state for several years.”
The 2006-2010 wage package agreement signed between the government and the GTU included the setting up of a $200 million revolving fund to build houses for teachers. Under the 2006-2010 package, $40 million was to be placed in the housing fund annually for the life of the agreement putting the total allocation at $200 million.
The package also included a 5% per annum across-the-board increase for all categories of teachers; one per cent of the wage bill as a performance based increment per annum for eligible teachers; increased remuneration for teachers who improved their qualifications; an annual clothing allowance of $6,000 per teacher; one-off duty-free concessions for vehicles for 100 head teachers per year; and 25 government-sponsored scholarships per year for teachers at the University of Guyana.
In September 2021, the Education Ministry floated a similar fund for teachers during the launch of the Teachers’ and Welfare Support Programme. Education Minister Priya Manickchand had said that the envisioned fund would be separate from the existing, but dormant, fund.
The Housing Revolving Fund was approved in 2011 under a PPP/C government and the 2018 MoU under the APNU+AFC government.
The Treasury Memorandum also addressed other issues raised in the 2015 AG report. The government committed to greater levels of accountability and compliance with the relevant financial and procurement laws.
