Gov’t draws scrutiny with $5.6B contingencies fund spending

The government will face scrutiny over a possible breach of the Fiscal Manage-ment and Accountability Act (FMAA) as Finance Minister Dr Ashni Singh prepares to seek parliamentary approval for $5.6 billion in supplementary budget funds to cover spending that took place towards the end of last year.

The money has been spent from the Contingencies Fund, for which the Finance Minister is solely responsible and Singh is seeking the approval of the National Assembly to replenish it by way of two financial papers. Financial Paper No 7/2011 makes a request for supplementary provisions amounting to $2.241 billion, while Financial Paper No 8/2011 is for $3.471billion. The papers appear on the Order Paper for the ceremonial opening of the Parliament on Friday, when President Donald Ramotar will make his inaugural address to the House.

But according to a well-placed source, the funds exceed by nearly $3 billion the amount allowed as the limit from the Contingencies Fund under the FMAA, which sets out detailed rules for public revenues and expenditure. Section 41 of the FMAA limits the amounts to be drawn out of the Contingen-cies Fund to 2 percent of the expenditure of the preceding fiscal year.

Ashni Singh

Observers have noted that the latest two financial papers bring the total some sought through supplementary funding for 2011 to $18 billion or approximately 12 percent of the total budgeted capital and current expenditure for 2011, if interest and debt repayment are excluded.

“Not only has the minister used the funds on expenditure that does not meet the test for drawings from the Contingen-cies Fund but he has gone above the limit by nearly $3 billion,” the source said. “The maximum amount the minister should have drawn out is 2 per cent of the 2010 approved budget of $142 billion, or $2.8 billion,” the source told this newspaper.

Christopher Ram

Writing in his Business Page column in the Sunday Stabroek of January 8, 2012, Chartered Accountant Christopher Ram said he feared that Dr Singh improperly spent money from the Contingencies Fund during the three months between the close of the last Parliament and the end of 2011.

“I foresee some real difficulties for him. I expect that he has to face as the shadow Finance Minister Mr Carl Greenidge, who knows the system as well as the law,” he said.

Ram said too that public officers are also aware that an era “of political fear from despotic ministers, and political cover” has ended and they will have to conform to the law. “It is one of the unfortunate features of the FMAA that ministers cannot be prosecuted under section 85 of the Act. Only officers can, something that is unlikely to make them comfortable,” the columnist wrote.

Carl Greenidge

He said the minister needs to bear two things in mind. “He must present to the first sitting of the 10th Parliament a report of any spending (advances) out of the Contingencies Fund since his last report. He should expect that report to be rigorously scrutinized to ensure each has met the three tests: urgent, unavoidable and unforeseen, and that any delay would have caused injury to the public interest. And second, the level of detail provided in his report of advances made out of the Fund in the past did not meet the requirements of the law,” said Ram.

Approached for a comment yesterday, former finance minister in the PNC administration Greenidge said that the PPP/C has been over the years abusing the Contingencies Fund and spending illegally outside of the budget.

He also said the PPP/C Government has been repeatedly breaching the FMAA, which it brought into being in 2003. He noted that in other Commonwealth territories, persons would have been made to face prosecution for such breaches.

Greenidge said that APNU is paying keen attention to the matter as the party prepares for the commencement of the business of the National Assembly. He said that APNU did not expect that the new government would continue along the same path, given the new dispensation and the opportunities being utilised for dialogue within the tripartite arrangement.

Further, he expressed surprise that there would be an Order Paper in circulation, since the Parliamentary Management Committee, which decides on the content of Order Papers, has not yet been constituted; neither has the APNU been informed of any such development.