Budget forum raises concerns about ‘leftover’ $33B, opposition plans cuts

As the debate on the budget draws to a close and the consideration of the estimates of expenditure to follow, the opposition parties are being urged to use their one-seat majority to ensure that funds held in various accounts are accounted for and brought into the Consolidated Fund before supporting the budget. However, because the parliamentary agenda for the coming days is already set, it is unlikely that this can be done before a vote on the budget.

Anand Goolsarran

Finance Minister, Dr. Ashni Singh’s 2012 Budget was scrutinized as former Auditor-General Anand Goolsarran and Chartered Accountant and attorney Christopher Ram explained how the national budget is prepared and examined the estimates of expenditure and methods used to split allocations over various agencies and ministries. The AFC-sponsored symposium was held at the Pegasus Hotel and was attended by over four dozen persons including parliamentarians from the AFC and APNU as well as members of civil society.

”I think a resolution should be passed, a motion should be passed in the National Assembly that the surpluses for all these entities be brought into the Budget for 2012,” Ram said to cheers as he spoke on a “parallel budget” utilized by government from funds garnered by entities such as government holding company NICIL. Goolsarran said that there is a need to look at “all the money that are floating all over the place and demand that the money be placed into the consolidated fund.” As a pre-condition to passing the budget, move every cent that belongs to the state into the Consolidated Fund, he suggested. “Somebody has to do a clean-up exercise to find where all the monies that belong to the state are, put the money into the Consolidated Fund,” he stressed.

APNU’s Chairman, Dr. Rupert Roopnaraine said that they are working on a remedy and have laid motions in the National Assembly that seek to bring funds from various agencies including NICIL into the Consolidated Fund. It would be important to get the motions approved before the consideration of the estimates of expenditure, he said but added that the question is whether there is sufficient space and time to have the motions fast-tracked.

The hours

Christopher Ram

But AFC Chairman, Khemraj Ramjattan said that he doubts that this would be possible. “The hours have been fixed now for us to go straight into budget debates and estimates and I rather think that we might not have arguments on that. We have a certain timeline to finish the debate and the estimates,” he told Stabroek News. But he said that they would be seeking a commitment from the government that this would be done.

“When we come to vote on the budget, at the estimates, if we don’t get (that) happening or commitment that that will happen we could very well block the budget,” he said. He said that they were on a collision course “because we are not getting the information that we need from the government and so we might very well block it partially or depending on the commitments that government can give us, we may very well support it.”

He said that government would have to ensure that all the monies go into the Consolidated Fund. “They can say well alright, we’re gonna put it down (for) two weeks time. We can wait until the two weeks and then we see and then we start dealing with it. But if they don’t want NICIL monies to go into the Consolidated Fund, if they don’t want lottery money, we will have to take some serious decisions as to whether we block it partially…” he said.

“We’ll probably have to make some cuts in the things they would like to see happen and we’ll have to indicate to them that look, those cuts can remain permanent unless you do a couple of things. Because in any event their conduct is unconstitutional when they are doing all these things of taking monies away and putting it into a separate parallel budget stream for them called NICIL. That is illegal,” he said.

In his presentation, Goolsarran questioned whether there is a document to show how the government performed in 2011. “They are looking at the Budget in isolation without looking at the results of the previous year,” he said. There are indicators but “you need audited financial statements available to parliamentarians before they could really consider the budget,” he stressed while adding that the report of the Public Accounts Committee is also needed.

Goolsarran pointed to several practices and noted that the budget at the end of the year might not be the same as the original budget because during the course of the year circumstances might warrant an amendment to the budget in the form of a supplementary budget. He also noted that there have been abuses. “The previous government was guilty, the present government is guilty of using the Contingencies Fund in foreseen expenditure…it’s an abuse of the use of the Contingencies Fund to meet routine expenditure,” he said.

He also pointed out that all appropriations lapse on the 31st of December but the practice here is that the books are opened even after this date and are then backdated to the 31st of December. “That’s wrong. 31st of December is the 31st of December. We should not keep the books open until March, and then take the page from January to March, all the expenditure and backdate to 31st of December,” he said. “That’s wrong, you’re manipulating, you’re distorting the accounts. You do that year in, year out, you’re not getting the true picture.”

$33 billion
Goolsarran, who stressed that he is not a member of any political party, also spoke about $33 billion that was supposed to be transferred from a special account held at the Bank of Guyana containing “leftover money” from the various projects. He had examined statements which did not reflect the transaction, he said. “Maybe there is an explanation, I don’t know but looking at the financial statements, it is actually not in the Consolidated Fund,” he said. “I’m not saying, maybe there’s an explanation, I’m not sure if there’s a mistake somewhere,” he added.

Meanwhile, Ram in his presentation said that the abuse of the Contingences Fund “is beyond an acceptable level.” He said that the Fiscal Management and Accountability Act contains certain illegalities such as making the Supreme Court a budget agency which ought not to be done under the Constitution.  The Act cries out for amendment and officials are guilty of violations of the Act, he said.

There are serious limitations in the 2012 budget, he said. “We do not have a proper idea of what the budget is,” he said while explaining that certain things are not being made clear.

There are vague descriptions and vague spending of funds, he said. Ram singled out several allocations in the budget for scrutiny including that the Guyana Elections Commission has been allocated more money this year than last year which was an election year. He also noted that more money has been allocated for the new Chinese roll on/roll off ferries compared to the previous financial paper and said that the  ferries should be “sent back.”

Ram said that based on numbers, the budget is “based on foreign, foreign labour…” He said that there is no tax equity in the budget and the National Insurance Scheme is in “big trouble.” By next year, the pension reserves would have been exhausted and certain actions would have to be taken such as raising contribution rates or raising the retirement age. “It’s going to be a serious problem,” he said.

He urged the opposition that if the government cannot explain or provide the necessary explanations, “you take out your scissors and cut.”

Around the Web