Former Auditor General Anand Goolsarran says that the Guyana Geology and Mines Commission (GGMC) has been running a parallel treasury by virtue of its spending of $8.3 billion over the last three years for various government projects without parliamentary oversight.
The disclosure of the expenditure came as the GGMC defended a controversial $3 billion loan agreement with the Central Housing and Planning Authority. That loan has been deemed to be in contravention of the GGMC Act by Goolsarran and others including commentator Christopher Ram. It is unclear if the loan is proceeding.
In his accountability column in yesterday’s Stabroek News, Goolsarran noted that in its attempt to defend the loan, the GGMC had disclosed that there were 32 other instances in the last three years where monies totalling $8.388 billion were either transferred to or applied in support of other agencies. Goolsarran noted that the expenditure pertained to the period during which Parliament was controlled by the combined opposition, and that in order to avoid parliamentary scrutiny for any proposed expenditure, funds from the GGMC were used.
“GGMC therefore assumed the role of another parallel Treasury, and is therefore complicit in the Administration’s deliberate attempt to undermine the role of the Legislature to decide on budgetary allocations. It is relevant to note also that the only payments made prior to 2011 were to the Consolidated Fund where amounts totalling … $4.8 billion were transferred during the period 2006 – 2011.”
Goolsarran charged that the circumvention of parliamentary approval to enable expenditure on government programmes and activities prevents the related expenditure from being captured in the public accounts.
“This will result in not only a significant under-reporting of expenditure but also the absence of an audit being performed on such expenditure. There is therefore an issue of the proper accountability of the funds transferred to other State agencies,” Goolsarran added. He said that it is also unclear whether certain expenditures were incurred by the GGMC per se and whether they were reflected in the accounts of GGMC.
Transfers to the Consolidated Fund would be the way for the GGMC to go, Goolsarran said, since it would then have recourse to the Fund in the event of a deficiency, as provided for by Sections 6(3) and 20(2) of the Act. He said that it follows that any accumulated surplus after retaining a reasonable amount as reserves should be transferred to the Consolidated Fund.
One of the transfers from the GGMC was for $1.352 billion to the Ministry of Public Works. “…surely the Permanent Secretary ought to have been aware that only funds approved by the Legislature should be used to incur expenditure, as provided for under Article 217(3) of the Constitution.
That sub-article states that `No moneys shall be withdrawn from any public fund other than the Consolidated Fund unless the issue of those moneys has been authorized by or under an Act of Parliament.’” Goolsarran said that similar observations can be made in respect of the Permanent Secretaries of the Office of the President (under which the Environment Protection Agency falls); and Office of the Prime Minister in relation to transfers made to improve electricity supply in the hinterland areas.
“GGMC has acted improperly and in violation of Article 217(3) of the Constitution by transferring funds to other State agencies to meet expenditure, or to incur expenditure on behalf of other State agencies. This action undermines the authority of Parliament to approve of expenditure on government programmes and activities, especially during a period when the Administration’s budgets were being carefully scrutinized by the Opposition-controlled Legislature,” Goolsarran declared.
He said that the GGMC’s action also calls into question the extent to which its board is allowed to function without interference from the political directorate.
“Or, were they handpicked loyalists following slavishly the orders of their masters?” he queried.
He said that GGMC needs to revert to what it did in the pre-2011 period and transfer excess monies to the Consolidated Fund to enable the Legislature to decide on budgetary allocations for government departments and agencies. He warned that accounting officers also need to be careful in ensuring that Article 217(3) of the Constitution is upheld. Failure to do so, he said, can result in their being held personally liable.
The figure transferred by the GGMC over the three-year period is greater than the $4.5 billion that the High Court recently ruled that Finance Minister Dr Ashni Singh had illicitly expended last year.