The coalition Government will have a stern test ahead of them when the consideration of the 2015 Auditor General’s (AG) report has been completed and they will have to submit, in writing, a commitment to either adopt or reject the AG’s many findings and recommendations.
It will be the first time that the coalition Government will have to account for financial anarchy found by the Auditor General to have occurred since it took office in 2015 and documented in his report.
These fiscal infractions include abuse of Guyana’s Contingency Fund and widespread overpayment of contractors. The Public Accounts Committee (PAC), before whom the 2015 AG report currently rests, has been the scene of turmoil for the past few months with several accounting officers having to be cautioned and evicted from the Parliament’s chambers for being untruthful with the Committee.
According to PAC member Juan Edghill, there is an expectation when an accounting officer comes before the Committee that, at a minimum, the officer will be forthright, factual and honest with the PAC.
“We would expect that whatever undertaking they make that they will fulfil it. For example, if they promise to submit documents they would submit those documents and that their undertaking would not be hindered by any obstruction from political boss or operatives, because they are the accounting officer and they will answer to the PAC.”
According to Edghill, at the end of this process the PAC will present a report to the National Assembly. That report will document the parliamentary sub-committee’s findings and recommendations.
“After that is completed, the Government would have to provide a Treasury memorandum, which will form the official Government response to the Auditor General’s findings and PAC’s recommendations.”
“Once the Treasury memorandum is submitted,” Edghill explained. “That is the Government’s commitment to what they will do based on the PAC’s recommendation.”
The last Treasury memorandum to be issued was one in 2013, pursuant to the PAC’s report on the AG’s findings of the year 2009. It therefore means that the PAC will have its work cut out before getting to the coalition’s government’s spending.
Worrying signs
Already, the Government has adopted a defensive stance to the Auditor General’s report, with Finance Minister Winston Jordan being heavily critical of some of the findings. In fact, Jordan went so far to state that the AG’s interpretation on what counts as emergency spending “doesn’t count under the law.”
But the 2015 Auditor General report had exposed instances of the Contingency Fund being abused under the present Government. One example cited by the report had been the Office of Prime Minister Moses Nagamootoo.
Sharma in his report stated that Nagamootoo’s office in December 2015, requested an advance of G$11 million from the Contingency Fund and stated the reason for the advance was for the Government Information Agency (GINA) to offset a part of its debt to the Guyana National Newspapers Limited (GNNL), publisher of the Guyana Chronicle newspaper.
Not only was the money used for the debt, but a portion of that sum was also used for another purpose, which constitutes a breach of the financial regulations.
This is based on the fact that the payment of GINA’s debt to GNNL does not constitute an emergency but rather a routine expenditure and therefore, the Contingency Fund should not have been used. This expense should have been budgeted for in the annual budget.
According to Sharma’s report, an examination of the requisite payment vouchers and other supporting documents revealed GINA paid GNNL the sum of G$9.450 million, whilst the remaining G$1.550 million was used to pay employees of GINA non-taxable bonus for 2015.
The Contingency Fund was established as a sub-fund to the Consolidated Fund, commonly referred to as the Treasury. The use of the Contingency Fund for the routine expenditure is a breach of the financial principles.
Under the Financial Management and Accountability Act 2003, Section 41 (3), “The Minister, when satisfied that an urgent, unavoidable and unforeseen need for expenditure has arisen – (a) for which no moneys have been appropriated or for which the sum appropriated is insufficient; (b) for which moneys cannot be reallocated as provided for under this Act; or (c) which cannot be deferred without injury to the public interest, may approve a Contingencies Fund advance as an expenditure out of the Consolidated Fund.”
Besides other instances of abuse of the Contingency Fund, there have been cases of over payment to contractors.
