Gov’t misuse of Contingencies Fund for routine expenditure ‘disappointing’

-Audit office

Auditor General Deodat Sharma has once again raised concerns about the government’s use of money from the Contingencies Fund to meet routine expenditure.

The 2016 Auditor General’s Report, which was laid in the National Assembly on Thursday, noted that nine advances, totaling $696.302 million, were granted from the Contingencies Fund to meet routine expenditure.

The report called the situation “disappointing” and reminded that previous reports highlighted instances where the criteria were not fully met for the granting of some advances.

Last year, Sharma reported that of the $799.898 million drawn from the fund, $604.034 million was to meet “routine expenditure.”

The criteria by which the Minister of Finance may approve a Contingencies Fund Advance as an expenditure out of the Consolidated Fund is stated at Section 41(3) of the Fiscal Management and Accountability Act. According to the Act, the Minister must be satisfied that “an urgent, unavoidable and unforeseen need for the expenditure has arisen for which no moneys have been appropriated or for which the sum appropriated is insufficient; for which money cannot be reallocated as provided for under the Act and which cannot be deferred without injury to the public interest.”

The sums drawn on the fund, which the Auditor General considered routine expenditure, were used to facilitate payment on the D’Urban Park Development Project, facilitate outstanding payments for works on the D’Urban Park Development Project, offset expenses incurred by the Guyana Defence Force (GDF) during the 46th Republic and 50th Independence Anniversary Celebrations, the laundering of uniforms for the GDF and maintenance of Drainage and Irrigation in Region 6.

However, the Finance Ministry’s response, as recorded in the report, suggests that it has a different interpretation of the Act.

“The Ministry of Finance continues to ensure that there is full compliance with the requirements of Section 41 of the FMA Act, 2003 as it relates to the granting of advances from the Contingencies Fund,” it stated.

Last year, Minister of Finance Winston Jordan took umbrage at the Auditor General’s description of the $604.034 million in advance as “routine expenditure.”

He declared at a press conference that the Auditor General’s opinions about the suitability of spending “doesn’t count under the law.”

He defended the spending, while stating that the Auditor General should have asked the circumstances surrounding the expenditure. “The law gives the minister the sole right to determine exigencies and soon thereafter bring it to Parliament. He does not have to consult the Auditor General. He consults the Cabinet. It is the Minister of Finance who determines and you can’t come six months after and tell me that the motor car I bought, for example, was not an emergency. You don’t know the circumstances and I’m the only one you can ask to explain,” he maintained.

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