– as PPP highlights breaches of Fiscal Accountability Act
Last Thursday, Government pushed financial paper No. 2 through the National Assembly, seeking more than $2.5B in supplemental funding. In that process, however, it breached the Fiscal Management and Accountability Act (FMAA).
Former Minister within the Ministry of Finance, Juan Edghill, speaking at a press conference on Saturday, disclosed that the FMAA had been breached, and referred specifically to the $89.8 million sought for the State Assets Recovery Agency (SARA) under the Ministry of Legal Affairs.
“I asked the Minister of Legal Affairs on what authority are appropriations being made, when no appropriation had been made in the original budget of 2017,” Edghill related. “He couldn’t answer! The Minister of Finance tried to offer some arguments, even asking me if I’m suggesting something illegal was done.”
Edghill continued: “I want to read from the Fiscal Management and Accountability Act (FMAA), (specifically the part dealing with) authority to vary annual appropriations. The law says that when you vary the budget (submit an appropriations bill), new appropriations shall not be created.
Section 22 (1) of the FMAA states: “The Minister may reallocate spending authority among annual appropriations during the fiscal year to which the appropriations relate, subject to the following restrictions”
Minister of Finance, Winston Jordan
A perusal of the Act shows that appropriations can only be varied across programmes within the related budget agency. It also states that an appropriation for any programme cannot be varied by more than 10 per cent of the total sum. And subsection ‘D’ adds that “new appropriations shall not be created.”
SARA was known as the State Assets Recovery Unit (SARU) before passage of the State Assets Recovery Bill 2017 in April. SARU had previously received allocations from budget 2017, and questions are being raised over the need to seek more money.
According to Legal Affairs Minister Basil Williams, the unit fell under his ministerial responsibility and, as such, the Ministry would be making the purchase of the two pick-ups and furniture and other accessories to be turned over to SARA.
Questioned on the allocations that had been made to SARU, the Legal Affairs Minister was unable to provide any answers since, according to him, the Unit fell under his remit only from May, 2017.
“Do you know what this means, ladies and gentlemen and tax payers?” Edghill asked. “This is double-dipping. SARU has already received appropriations for the entire year under the Ministry of the Presidency. You now have SARA, the same thing as SARU, now under the Ministry of Legal Affairs,” he explained.
“They are appropriating $89 million for current expenditure for an entity that has already had money appropriated towards it. They broke the law by creating a new appropriation rather than transferring the money. So that money will remain in the Ministry of the Presidency, and God knows where it will go,” Edghill detailed.
A total of $89.9 million was voted as current expenditure, to cater for salaries, rental, utilities and other such recurring expenditure. These sums of money were represented as Line Item 52-521: Subsidy and Contribution to Local Organisations from the Legal Affairs Ministry, under Current Estimates.
Under Capital Estimates, $13 million were approved for the purchase of two pick-up vehicles for the unit, because the agency “does not currently have any vehicles”.
Another $13.4 million were approved for the purchase of furnishing and other equipment for the property being rented to house the agency.
By the end of the session related to the Legal Affairs Ministry and SARA, in excess of $115 million had been approved by the coalition Government to operationalise SARA, despite the protestations of the Opposition.
