Dear Editor,
The Natural Resources Fund (NRF) is essentially an Extra Budgetary Fund, established pursuant to Section 39 (1) of the Fiscal Management and Accountabi-lity Act 2003. In accordance with the FMA Act, public moneys can be held in three places separately, namely: (1) the Consolidated Fund, (2) Deposit Funds, and (3) Extra Budgetary Funds.
The FMA Act is the primary authority that governs the Consolidated Fund (CF). To this end, Part I (1) of the FMA Act states that… “the regulation of the preparation and execution of the annual budget; the receipt, control, and disbursement of public moneys; and such other matters connected with or incidental to the transparent and efficient management of the finances of Guyana”. Part IV of the FMA Act Section 37 establishes the definition for the classification of public moneys. Accordingly, Section 37 (1) states that: “All public moneys shall be classified as either”- 1) Received moneys; 2) Moneys in the Consolidated Fund, including any moneys in the Contingencies Fund; 3) Moneys in an Extra-Budgetary Fund; 4) Drawn moneys; or 5) Moneys in a Deposit Fund.
Section 37 (2) of the FMA Act establishes that…” All public moneys shall be deemed to be received moneys from the time they become public moneys until the time that they are credited to the Consolidated Fund, an Extra Budgetary Fund, or a Deposit Fund”. Section 39 (1) establishes that “An Extra-Budgetary Fund may be created by an Act, which legislation shall set out – a) The officials who will undertake the financial management of the Extra Budgetary Fund, including the responsibilities and accountabilities of the officials charged with the managing of the Extra Budgetary Fund; b) The Banking arrangements that pertain to the Extra Budgetary Fund; c) The source or sources of public moneys to be credited to the Extra Budgetary Fund; d) The accounting rules and auditing requirements applicable to the Extra Budgetary Fund; and d) The financial reporting requirements applicable to the Extra Budgetary Fund, including the reporting of financial performance both during and at the end of each fiscal year.
Section 37 (4) of the FMA Act establishes that…” Subject to any other law, resources of an Extra Budgetary Fund may be administered either through its own accounts in selected banks pre-approved by the Minister or through the payment and banking services of the Consolidated Fund but shall be accounted for separate and apart from any other resources.”
The NRF Act (2021) Section 15 (1) establishes that “Petroleum revenues shall be directly paid into a bank account denominated in United States Dollars and held by the Bank as part of the Fund”. Section 15 (2) goes onto define what petroleum revenue shall include, such as royalties, profit oil, petroleum income tax, additional profits, any signature bonus etc. Further, Sections 16, 17 and 18 establishes the withdrawal rules of the Fund, whereby its states that all withdrawals from the Fund shall be deposited into the Consolidated Fund (Section 16 (2)). As is evidently illustrated herein, the Natural Resources Fund is essentially an Extra Budgetary Fund created by way of an Act in this case, the Natural Resources Fund Act 2021. More significantly, the Fund (NRF) is administered, managed, and governed in accordance with two substantive pieces of legislation―namely, the NRF Act and the FMA Act.
Sincerely,
Joel Bhagwandin