Financial lawlessness on the increase

Not only that. The various acts referred to above are all part of the commitment of the Government of Guyana to the international donor community – the IMF, the World Bank, the IDB, the EU, Canada, the US and others – for good governance including transparency in accounting, in exchange for financial support. The Minister of Finance is the member of the Cabinet designated by law for ensuring that the constitutional and statutory requirements are complied with and is empowered by the act to take punitive action against those who breach its provisions. Having played a major role in the passage of the accountability legislation, the donors are assumed to be familiar with the main provisions of the legislation and must therefore be aware of the major infractions of the legislation by the very Minister bound to ensure compliance.

Spend, baby spend

The national budget continues to grow at a considerable rate helped by VAT producing immoral windfalls to the government. With a penchant for huge numbers and throwing money after problems, for President Jagdeo the policy has been ‘spend, baby spend.’ Like the World Cup money and the flood funds, accountability and audit will come later, if at all. No one would have identified Dr Ashni Singh, Minister of Finance with the ‘spend, baby spend’ attitude, or given his background as a professionally qualified accountant and former Deputy Auditor General, have expected that he would treat accountability and the audit of the books of the state with such disdain. It is neither excusable nor understandable.

Yet Dr Ashni Singh has breached several of the statutory duties and professional obligations imposed on him in defiance of public opinion and the rule of law, and confident of no warning letter from the President, his political boss. Dr Singh’s apparent contempt for good governance and accountability makes many hesitate to support the LCDS which places the centre of the LCDS in the Office of the President, the very office that now unconstitutionally (mis)appropriates the Lotto Funds, using it for all sorts of improper purposes at the fancy of the President.


Article 217 of the Constitution of Guyana – the country’s supreme law – requires that “all revenues or other moneys raised or received by Guyana (not being revenues or other moneys that are payable, by or under an Act of Parliament, into some other fund established for any specific purpose or that may, by or under such an Act, be retained by the authority that received them for the purpose of defraying the expenses of that authority) shall be paid into and form one Consolidated Fund.”  I do not believe that the term “for any specific purpose” can be interpreted so widely as to allow an Act of Parliament to defeat the main constitutional objective to ensure that moneys coming in to the state go only into the Consolidated Fund and any spending done out of that Fund is on the basis of appropriations by the National Assembly.

In defiance of the constitution the 24% of gross takings collected by the government from the Guyana Lottery Company are made available to the President who seems to exercise total control of how it is spent with only any unspent balance being put into the Consolidated Fund. I have heard this practice defended under the second parenthetical exception to Article 217 and that the money should go to the Government Lotteries Control Committee under the Government Lotteries Act Cap. 80:07. That argument in my view falls at the first hurdle since that act deals only with lotteries “organised and conducted by the Govern-ment Lotteries Control Committee.” The Lotto Funds as they are infamously referred to, represent the government’s share of the gross takings from a private lottery run under a contract between the Canadian operator and the government. It is a tax/levy and should rightly go straight into the Consolidated Fund. The President’s misuse of these funds is a clear breach of the constitution which he has taken an oath to uphold, while the failure by the Minister of Finance to bring these moneys into the Consolidated Fund constitutes a dereliction of his duty and obligation and contrary to section 48 of the FMAA which makes it unlawful for any minister or official to misuse, misapply, or improperly dispose of public moneys.

The mid-year report

The Fiscal Management and Accountability Act 2003 imposes on the Minister a mandatory duty to present to the National Assembly, no later than August 30 of the half year, a report on the year-to-date execution of the annual budget and the prospects for the remainder of the year. This column has been at pains to point out that not only is the Minister in breach of this statutory duty with regard to timing, but even when he belatedly submits the report, it is frequently misdated to minimise the delay and omits key information prescribed by the act. The act requires the report to include “an update on the current macroeconomic and fiscal situation, a revised economic outlook for the remainder of the fiscal year, and a statement of the projected impact that these trends are likely to have on the annual budget for the current fiscal year.”

This is a practical proposition and the report should comment on emerging issues such as the alleged $300 million fraud at the GRA, the President’s $2 billion housing fund for the vulnerable, the gains from the LCDS and any unbudgeted expenditure incurred in the first half of the year. This kind of information is not only for the business community and the citizenry but also the kind of information any Finance Minister as the country’s Chief Finance Officer needs for his short-term planning.

Unintended consequences

The delay by the Minister causes the Bank of Guyana (BoG) to delay the publication of its own half-year report until the Minister releases his. I understand the BoG’s report has been ready for some time and while the Bank is an independent statutory body, it comes within the ministerial control of the Finance Minister, a choice between losing its reputation for independence and offending the Minister.

A similar situation exists with the Bureau of Statistics. This entity has received several millions of dollars to enhance its professional competence and secure its independence. I think it was in 1991 that an act was passed to make the bureau a body corporate, independent and effective. The minister responsible for the act is the Minister of Finance who in the absence of a chairman appointed by him is automatically the chairman. There is nothing to indicate that a board was ever appointed and by default the bureau remains as a unit of the Ministry of Finance, mistakenly described on its website as a “Government of Guyana Agency.” It should not therefore come as a surprise that the bureau is far from effective in how it carries out its mandate, selectively choosing if and when to publish important statistical information, a decision apparently not unrelated to the wishes of the Minister.

Perhaps more out of frustration than from a practical consideration a source close to the Bank of Guyana has suggested that these two bodies should report direct to the National Assembly. This may very well be a suggestion that the Speaker of the National Assembly or the Public Accounts Committee may wish to take up, even if in the first instance it is done privately. What is clear is that the failure of these bodies to discharge their statutory duties does little to contradict those who argue that what Guyana has is paper accountability only.

The Office of the Auditor General

Not only is this office subject to its own act but it is also a constitutional body with serious responsibilities and functions. One of the first but fundamental points to note about the head of this office is that the constitution makes no provision for an acting Auditor General and the job description clearly requires a professionally qualified accountant. In fact the incumbent has no such qualification and it would be a travesty for him to be appointed substantively to the position. It may be convenient for the government to have him there, but surely it is dangerous for the taxpayers of the country and severely compromises the quality of its reports. By retaining him the government is aware that the real authority in the Audit Office is no less a person than the spouse of the Minister of Finance. It is hard to believe that neither of them nor anyone in the government, nor in the international donor community that keeps putting money into the Office, recognises this obvious conflict of interest or simply is not interested even in token accountability.

Even with that major weakness the Audit Office is operating at half its required manpower and this helps to explain why it keeps falling back and down on many of its public commitments. Like the Minister of Finance’s mid-year report, the Audit Office’s report on the Government accounts for 2008 is also late. By law this must be submitted to the National Assembly within nine months of the end of the accounting year. We are now in the eleventh month without any word about when this report will be available.

One of the mandates of the Office is to conduct Value-For-Money (VFM) audits and it must now be coming on to a year or more since the Office has been due to issue its report on a VFM audit conducted on the financially miniscule Palms.

Even with expensive Canadian assistance the Office has been unable to deliver. VFM audits are of less value where the expenditure is unavoidable, as it is with the Palms, the main expenditure on which comprises staffing (it is understaffed) and meals (which are as low-cost as one can get). VFMs are useful in the case of discretionary expenditure such as Cabinet Outreach and the choice of newspapers for government advertisements. With weak and compromised leadership, the Office is clearly not in a position to deliver on its mandate.


Transparency and accountability are not esoteric or theoretical concepts but are practical, part of the democratic landscape and help to ensure that money is properly accounted for and sensibly spent. Our national budget exceeds $100 billion and if we take the most conservative estimate of 10% as lost through poor financial management, the country loses $10 billion per year. Think what that can do to reduce taxation or enhance social spending. The Minister of Finance has a wonderful opportunity to redeem his reputation.


UG School of Business upbeat after first semester

After we had spoken with Visiting Professor at the University of Guyana’s School of Enterprise, Business and Innovation (SEBI), Professor Leyland Lucas, and his support staff early last week, we headed across to the new facility created to house the School.

Avocado now in ‘super fruit’ league

While most types of fruit produced in the Caribbean have traditionally been considered to be largely of niche market value, reports emanating from JAMPRO (Trade and Investment, Jamaica) the state-run agency set up to promote business opportunities in export and investment, point to a drift of some fruit onto the mainstream market.

Catfish exporters suffering as Guyana fails to meet US Food standards

Heeralall Sukdeo, owner of Sukdeo and Sons Fishing Enterprise, says that local companies have suffered significant losses since they can no longer export catfish to the United States of America and he predicts even more severe ramifications if measures are not put in place to address the ban.

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National Mining Syndicates President Cheryl Williams talks about her life in the gold industry

Cheryl Williams might easily be mistaken for a sprightly but retiring grandmother focused on simply enjoying this phase of her life though once you hear her story you quickly understand that nothing could be further from the truth.

Govt must ‘call time’ on Russian management’s abuse of BCGI workers – Lewis

General Secretary of the Guyana Trades Union Congress (GTUC) Lincoln Lewis on Tuesday told the Stabroek Business that he fails to see how the Government of Guyana could continue to neglect to pronounce on “the excesses of the Russian  management of the partially  state-owned Bauxite Company of Guyana Inc.


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