Finance Ministry defends use of Contingencies Fund

The Ministry of Finance is defending the use of the Contingencies Fund to restore $4.6 billion of the $37.4 billion slashed from the originally proposed $220 billion 2014 budget.

In a statement last evening the ministry said that Finance Minister Dr Ashni Singh’s authority to tap into the Fund is derived from Section 41 (1)-(7) of the Fiscal Management and Accountability (FMA) Act 2003.

Section 41 (2) of the legislation states that “the Minister shall have sole authority for the release of moneys from the Contingencies Fund, which authority shall not be delegated.”

Section 41 (3) reads: “The Minister, 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 by the issuance of a drawing right.”

At least one analyst, Christopher Ram has challenged the contention that this legislative provision upholds the minister’s actions as just.

In a letter published in the June 22nd edition of the Sunday Stabroek, Ram said that reliance on this provision is “tenuous” since it deals with the Contingencies Fund, while each of the fifty attachments on Financial Paper 1 of 2014 presented to the National Assembly last Thursday by the Finance Minister is headed “Statement of Excess 2014.”

Ram believes that the amounts in question are therefore a different concept and do not qualify under Section 41 of the FMA Act. He further contended that Sections 36 and 24 of the Act, as well as Article 219 of the constitution, do not avail the minister any cover for his actions.

In the statement the Finance Ministry iterated that the minister is aware that he must defend the expenditure when the National Assembly next meets on July 17th and that he intends to do so. The release also points to past uses of the Fund and decisions taken to support the expenditure.

The ministry noted that since the start of the 10th Parliament the minister has laid six Financial Papers detailing the minister’s use of the Fund. They hold a collective value of about $9.358 billion. The ministry said that the combined opposition in the National Assembly has approved 92.6 percent ($8.7 billion) of this amount. This, the ministry argues, indicates their agreement with the use of the Fund, in most cases. The statement was silent on the status of the unapproved 7.4% of the requests.

Singh has come in for serious criticism by A Partnership for National Unity (APNU) and the Alliance for Change for his most recent use of the Fund. APNU finance point man Carl Greenidge has said the coalition will pursue measures against him for his actions.

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