Consolidated Fund overdraft doubled since 2015

When it came to power in 2015, the coalition Government reached a Consolidated Fund that had an overdraft of less than $50 billion. Three years later, that number has more than doubled, with the Auditor General Deodat Sharma, red flagging the state of the fund in the office’s 2017 report.
According to the AG report, the Consolidated Fund had an overdraft of $89.9 billion as of December 31, 2017. In addition, the cash book had an overdraft of $109 billion and a difference of $19 billion.
This, the report states, is because of a deposit of over $2 billion and debit advances of $1.6 billion that were not debited to the cash book; deposits of $5.3 billion not credited to the bank account and unpresented cheques of $23.5 billion.
The AG noted that at the end of 2016, the overdraft state of the Consolidated Fund was $67.5 billion. Thus, 2017’s figures are a 33 per cent increase of $22.3 billion. And when one considers 2015’s figures, the overdraft has increased by $47.2 billion over the course of a few years.

In its response to the AG’s findings, the Finance Ministry noted that Section 60 of the Financial Management and Accountability (FMA) Act 2003 allows for the Finance Minister to overdraw the Consolidated Fund.
Quoting Section 60 (1) of the FMA Act, the Ministry noted that “The Minister may approve the use of advances in the form of an overdraft on an official bank account to meet cash shortfalls during the execution of the annual budget.”
Conspicuously, however, the Ministry stops short of reading the next paragraph, which states “The Minister shall repay in full all advances in the form of an overdraft on an official bank account on or before the end of the fiscal year during which that overdraft was drawn.”
In addition, the Ministry explained that the fluctuation in payments sometimes forces the Government to use the overdraft of the Consolidated Fund. It noted that use of overdraft by accounting officers in Ministries, departments and regions is prohibited.
Article 216 of the Constitution of Guyana states, “All revenues or other (sums of) money raised or received by Guyana (not being revenues or other sums of money payable by or under an Act of Parliament into some other fund established for any specific purpose; or that may, by or under such an Act, be retained by the authority that received them for the purpose of defraying the expenses of that authority) shall be paid into and from one Consolidated Fund.”
Article 217 stipulates that money cannot be withdrawn from the Consolidated Fund except: “(a) to meet expenditure that is charged upon the fund by this Constitution or by any Act of Parliament; or (b) where the issue of those (sums of) money has been authorised by an Appropriation Act; or (c) where the issue of those (sums of) money has been authorised under Article 219.”
Despite this regime of stipulations, however, Government has been red flagged by the Auditor General’s office time and time again for not using the Consolidated Fund in the rightful manner.
Auditor General Deodat Sharma had declared in his 2015 Audit Report that Government had kept more than $500 million, rather than deposit same into the Consolidated Fund. That report had spoken of the millions of dollars used on the D’Urban Park construction, Mashramani celebrations, and $51.5 million being spent on ‘music’.
Financial experts have called on tougher laws to be implemented when it comes to using the Consolidated Fund, given its important purpose and history of abuse.