Abuse of Contingency Fund alarming – economist

– calls for stiff penalties against accounting officers

Since coming to power, officials of the coalition Government have been caught red-handed abusing the nation’s Contingency Fund. According to one observer, the situation is an alarming one that requires urgent action against the accounting officers.
According to economist Ramon Gaskin, the Contingency Fund is usually for national emergencies, such as the floods which hit Region Eight (Potaro-Siparuni) recently and necessitated emergency supplies to be provided.
He said the fact that the Auditor General keeps flagging these officers for fiscal mis-management is an alarming situation. According to Gaskin, the reported misuse of the Fund and inaction against accounting officers was bordering on the ridiculous.
“The Contingency Fund is being abused and they are using it in a manner that it is not supposed to be used. And that is why the Auditor General keeps reporting about it. But the people keep doing it; they keep using the Contingency Fund.
“So that’s one of the problems they have there. It’s not to be used for those purposes. It’s for unforeseen emergencies, like the flooding we had in Region Eight.”
Gaskin called for stiffer action to be taken against accounting officers and permanent secretaries responsible for the violations of the Contingency Fund, noting that it would send a strong message to other personnel to remember their ethics and professionalism.
“I think the persons who are responsible for continuous abuse of the Fund should be removed from those positions… the permanent secretaries, the chief accounting officers should be removed. The Government has to dismiss those people; they cannot just remain in their jobs because they are breaching the rules.”
“But nobody gets dismissed for that, but people get dismissed all the time for other things. The accounting officers have to be dismissed for breaching all the rules, it’s as simple as that. That would be my suggestion.”

Abuse
The A Partnership for National Unity/Alliance For Change while in Opposition, had complained bitterly about similar acts by the then People’s Progressive Party/Civic Administration.
But the 2015 Auditor General report had exposed instances of the Fund being abused under the present Government. Auditor General Deodat Sharma in his 2015 Report had cited the Office of Prime Minister Moses Nagamootoo for misuse of the Contingency Fund and diverting monies drawn down from the Contingency Fund for purposes it was not intended for.
Sharma in his report stated that Nagamootoo’s office in December 2015, requested an advance of $11 million from the Contingency Fund and stated the reason for the advance was for the Government Information Agency (GINA) to offset a part of its debt to the Guyana National Newspapers Limited (GNNL), publisher of the Guyana Chronicle newspaper.
Not only was the money used for the debt, but a portion of that sum was also used for another purpose, which constitutes a breach of the financial regulations.
This is based on the fact that the payment of GINA’s debt to GNNL does not constitute an emergency but rather a routine expenditure and therefore, the Contingency Fund should not have been used. This expense should have been budgeted for in the annual budget.
According to Sharma’s report, an examination of the requisite payment vouchers and other supporting documents revealed GINA paid GNNL the sum of $9.450 million, whilst the remaining $1.550 million was used to pay employees of GINA non-taxable bonus for 2015.
The Contingency Fund was established as a sub-fund to the Consolidated Fund, commonly referred to as the Treasury. The use of the Contingency Fund for the routine expenditure is a breach of the financial principles.
Under the Financial Management and Accountability Act 2003, Section 41 (3), “The Minister, when satisfied that an urgent, unavoidable and unforeseen need for expenditure has arisen – (a) for which no moneys have been appropriated or for which the sum appropriated is insufficient; (b) for which moneys cannot be reallocated as provided for under this Act; or (c) which cannot be deferred without injury to the public interest, may approve a Contingencies Fund advance as an expenditure out of the Consolidated Fund.”
On Wednesday, Opposition Leader Bharrat Jagdeo had called for charges to be laid against the Director of GINA, Beverly Alert, for the alleged misappropriation of public monies in relation to the very case red flagged by the Auditor General.
After being brought before the Public Accounts Committee (PAC) recently, Alert had called for auditors to again take a look at the entity’s finances. This was reportedly because the data she was furnished with contained glaring inaccuracies which she was unable to explain to the parliamentary committee.