Press attention to accountability has never been more important in Guyana with a historically large revenue stream entering government coffers and a regularly stated intent to use those resources for a development agenda that cuts across all regions and races…There is also a larger principle at stake that strong democracies require free information flow in the public marketplace of opinions and ideas. As inconvenient as criticism can be to government officials and other leaders, it is an essential part of the democratic cacophony.
Ambassadors of ABCE countries
World Press Freedom Day was observed last Tuesday. On this occasion, Transparency International (TI) reminded us that governments, especially authoritative ones, are using public funds with little to no accountability to purchase spyware that targets journalists critical of them. This was in reference to the Pegasus surveillance software that identified 100 journalists as possible targets. According to TI, 24 journalists have been killed so far this year while countless others are facing harassment, imprisonment and restrictions; and in the last five years there has been a decline in press freedom in respect of 85 percent of the world’s population in their respective countries.
At home, the Guyana Press Association (GPA) has called on the Government not to use spyware to monitor the activities of journalists. In response, the President gave the assurance that there is no intention of doing so and asserted that such practice has no place in democratic societies. One recalls the early 2000s when a convicted drug trafficker acquired spy equipment reportedly with the approval of the then Government, to track persons allegedly associated with criminal activities as well as other persons.
In our article of 26 July 2021 titled “The Pegasus spyware scandal”, we reported that an Israeli company developed a spy software that is capable of extracting personal data from one’s computer or mobile phone, including recording live audio and video, without the knowledge and consent of the person. The company maintained that its technology is intended for use only against criminals and terrorists. However, there is evidence that the spyware has been used by some governments to target journalists, activists and political opponents. (See article at https://www.stabroeknews.com/2021/07/26/features/accountability-watch/the-pegasus-spyware-scandal/.)
In response to a call from the GPA for the resumption of post-Cabinet press briefings, the President gave a commitment that these will be done. Normally, it is the Cabinet Secretary who provides the media with such briefings. However, it is unclear whether an appointment has been made to this position. By Article 117 of the Constitution, there shall be a Secretary to the Cabinet whose office shall be a public office, meaning that the position is a public service one which should not be held by a political appointee, as has been the practice since 1992. The present Clerk of the National Assembly once held the position of Deputy Secretary to the Cabinet.
This undesirable practice extends to Permanent Secretaries and Regional Executive Officers (REOs) in what should be a politically neutral public service. Suffice it to state that governments come and governments go, but it is the Permanent Secretary and the REO along with their staff who provide the institutional memory for continuity and aid in the transition from one government to another. In 2015, the Commission of Inquiry into the functioning of the public service recommended that the practice of having political appointees as Permanent Secretaries and REOs be discontinued, but to date no action was taken to remedy the situation. The Commission had also recommended a unified public service with uniformity of pay and grades as well as minimising the extent to which contracted employees are engaged. According to the 2022 Estimates, contracted employees account for 16.1 percent of the wages and salaries of the public service and enjoy enhanced emoluments and other conditions of service. This percentage does not include the emoluments of persons engaged on a contractual basis on the Government’s capital expenditure programme.
The Cabinet Secretary is required, among others, to convey decisions of the Cabinet ‘to the appropriate person or authority’. My recollection is that copies of Cabinet decisions were always sent to the Auditor General. In 1992, when the Government changed, there were allegations that Cabinet papers were being destroyed. I therefore felt it duty-bound to provide the new Administration with copies that the Audit Office had in its possession to enable a smooth transition, especially as regards the award of major contracts and loan agreements entered into. This I did, and the then Head of the Presidential Secretariat personally came to the Audit Office to collect the documents.
In last week’s article, we began a discussion of certain financial breaches and other irregularities in government over the years which should be thoroughly investigated and appropriate sanctioned imposed against those found culpable. So far, we dealt with breaches of the Fiscal Management and Accountability (FMA) Act, especially as regards overpayments to contractors for works undertaken as well as to suppliers for the procurement of goods and services. This is in addition to the acceleration of expenditure in the last quarter of the year and the drawing of cheques close to year-end in order to exhaust budgetary allocations although full value was not received as at this date. In some cases, no value was received. The FMA Act requires all unspent balances to be surrendered to the Consolidated Fund, and all incomplete works are to be re-budgeted for in the following year. They cannot be rolled over to the next fiscal year. However, there is little or no evidence of any action taken over the years to bring an end to these widespread breaches of the law.
Breaches in the FMA Act in 2019
So far, we have dealt with certain breaches in the FMA Act up to 2018. We now come to the year 2019. This was the year when the then Administration exhausted all efforts to challenge the Speaker of the National Assembly’s ruling on the vote of no confidence in the Government. It was also the year when the Assembly did not convene, except on four occasions during the period 1 January to 23 May 2019. Although an approved budget for the year was in place, there were restrictions in spending, in keeping with the caretaker status of the Government. It therefore meant that at the end of 2019 there would have been significant unspent balances, especially in relation to the Government’s capital expenditure programme. Instead of refunding these balances to the Consolidated Fund, a Cabinet sub-committee “noted” the proposed award of 57 contracts on 30 December 2019. Except for construction of the Yarrowkabra Secondary School, the amounts involved in these contracts were not disclosed and could run into billions of dollars.
Amid concerns about the awarding of contracts so close to year-end, a senior government official stated that the funds to be used to execute the contracts were provided for under the 2019 Estimates. He was either unaware of the requirements of the Act or was unconcerned whether or not a breach would have occurred. Please refer to our article dated 10 February 2020 under the caption “Awarding of major contracts close to year-end to exhaust budgetary allocations is a serious breach of our financial laws”, to be found at https://www.stabroeknews.com/2020/02/10/features/accountability-watch/awarding-major-contracts-close-to-year-end-to-exhaust-budgetary-allocations-is-a-serious-breach-of-our-financial-laws/.)
The Auditor General’s report for 2019, which is still to be examined by the Public Accounts Committee (PAC), highlighted the following:
Overpayments totalling $199.4 million were made on four contracts administered by the Ministry of Finance, Ministry of Public Telecommunications, Guyana Defence Force and Transport and Harbours Department. Of this amount, $145.0 million and $25.5 million were in respect of the rehabilitation of the Leguan Stelling and expansion of the Civil Defence Commission headquarters, respectively. In the case of the Ministry of Finance, $26.5 million remained unrecovered and the related bond had expired. There were also several instances where the supervising consultants for the works undertaken by the Ministry of the Finance and the Guyana Defence Force, recommended full payment although the works that had not been completed at the time;
The National Procurement and Tender Administration Board approved of the award of a contract on 31 December 2019 – the last day of the fiscal year – for the construction of a Secondary School at Yarrowkabra in the sum of $827.8 million. On the same day, the Finance Secretary approved of the contract to be a multi-year one, and a mobilisation advance of $26.0 million was paid to the contractor;
The Ministry of Public Telecommunications approved an advance payment of $17.2 million and an interim payment of $31.8 million on the same day for the renovation works to a call centre building at Linden. The contract was also signed one day after the payments were approved;
Payments totalling $67.5 million were made for capital works but charged to current expenditure in breach of the FMA Act. Of this amount, sums totalling $54.4 million relate to the Ministry of Public Infrastructure;
A total of 14,137 cheques valued at $16.0 billion were drawn on 31 December 2019, and early January 2020 for expenditure relating to the financial year 2019. The report did not, however, indicate whether full value was received at the time the cheques were drawn but in all probability would have been so in most of the cases, if not all, for reasons already mentioned.
Although not mentioned by the Auditor General, it is evident that most of the $16.0 billion worth of cheques that were drawn on 31 December 2019 were in relation to the 57 contracts that were awarded for which works were yet to be commenced or goods/services not supplied. One hopes that the officials responsible for certifying progress payments and satisfactory completion of the works as well as the supply of goods/services at the time the cheques were drawn, including the concerned heads of budget agency, would be called upon by the PAC to provide answerability for their actions. Indeed, if a full and comprehensive investigation is carried out in relation to these contracts, it could very well be that numerous cases could be found of works similar to that of the former civil engineer who certified the satisfactory completion of the renovation of a sluice at Lusignan although the works had not been completed at the time the cheque was made out in December 2018. In this case, the PAC ordered that a criminal investigation be launched into the actions of the engineer, as reported in our last week’s column.
Breaches in the FMA Act in 2020
The public accounts for 2020 reflect the financial performance of both the present and the previous Governments following the change in administration in August 2020. The Estimates for that year were also not approved until September 2020. The Government therefore functioned without a budget for eight months. In our article of 28 September 2020, we raised the issue of the legitimacy of the expenditure incurred during the four-month period from 1 May to 31 August 2020. By Article 220 of the Constitution, if an Appropriation Act has not come into effect at the beginning of the fiscal year, the Minister is authorized to make withdrawals from the Consolidated Fund to meet the cost of essential services up to four months or until the coming into effect of the Appropriation Act, whichever is earlier. (Emphasis added.)
Since the Appropriation Act 2020 came into effect in September 2020, the Minister’s authorization could only cover the period January to April 2020. There is no provision for accessing the Consolidated Fund to meet expenditure beyond this period. Therefore, withdrawals for the period 1 May to 31 August 2020 would lack constitutional and legislative authority. Although there is recourse to the Contingencies Fund, there is a limit to the amount that can be withdrawn; and arguably the criteria for withdrawal would not have been met. In fact, only six withdrawals totalling $792.3 million were made from the Contingencies Fund in 2020.
The Auditor General did not address the above matter in his 2020 report. He nevertheless highlighted the following:
Five contracts valued at $1.6 million were terminated due to unsatisfactory performance, including the construction of St. Rose’s High School, Yarrowkabra Secondary School, and the Ministry of Health Head Office. The report did not indicate whether any recoveries were made from the contractors;
Overpayments totalling $11.4 million were made on five contracts administered by Ministry of Education; and
Drugs and medical supplies valued at $1.6 billion that were paid for had not yet been received at the Ministries of Health. Of this amount, amounts totalling $1.1 billion were not covered by any bank guarantees.
To be continued –
