Govt uses almost $3B from the Contingency Fund

– 9M used to complete Durban Park

Finance Minister Winston Jordan on Thursday presented to the National Assembly, a breakdown of almost $3 billion, which the Administration has begun spending in addition to the 2016 National Budget.

The expenditure has since revealed that in excess of $406 million was used for the completion of the Durban Park Development Project to facilitate the hosting of Guyana’s 50th anniversary celebrations. This is in addition to the $73 million that had already been allocated in the National Budget for the Durban Park project, under the Public Infrastructure Ministry.

Financial Paper 1/2006, which was presented to the House Minister Jordan and represents advances already made from the Contingency Fund, details the monies that would have been used by the Ministries of Agriculture and Public Health, and the Guyana Defence Force (GDF).

The Contingency Fund was established as a sub-fund to the Consolidated Fund, commonly referred to as the Treasury. Under the FMA, “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.”

According to the breakdown provided by the Finance Minister, $234 million was spent by the Agriculture Ministry as part of its subsidies and contributions to local organisations. The details provided by Minister Jordan revealed that $193 million went to the National Drainage and Irrigation Authority (NDIA) due to the increase in expenditure resulting from the unexpected and prolonged dry season as a result of the El Niño phenomenon.

The Public Health Ministry also utilised an additional $63.5 million to pay rental for the storage of pharmaceuticals between March and June of this year, in addition to payments for rental to the Linden Holding Company, “as per Cabinet decision for the month of July 2016” in addition to the payment of a security deposit.

The GDF, according to the Financial paper presented by Minister Jordan, was the recipient of substantial sums of money, in addition to what was voted for in the 2016 Budget. The document revealed that $20 million was used by the GDF “as provision to offset expenses for the procurement of maps and writing materials which aided in the development of Orders and other related documents in support of the 46th Republic anniversary celebrations, 50th Independence anniversary celebrations and intensifying operation DRAGNET.”

The GDF also benefited from an additional $54 million, and according to the Finance Minister’s breakdown, this money was utilised for “operational readiness of ranks for parades that ensured the success of operation DRAGNET over the 46th Republic Day and 50th independence anniversary celebrations. The Finance Minister also submitted a second financial paper totalling just over $2 billion to be spent by a number of Government budget agencies including the recently established Telecommunications Ministry.

According to the Financial document presented to the House, that Ministry was only Gazzetted in January of this year and was in the process of formulating an annual work plan at the time of Budget 2016.

As such, that Ministry has been allocated almost half a billion dollars to offset its operational expenses for 2016.

According to the financial document, the Telecommunications Ministry, under the aegis of substantive Minister Cathy Hughes, will receive monies to be used for the rental and maintenance of buildings under its control, including the LTE sites which forms part of the infrastructure for government’s E-Governance Project.

The University of Guyana (UG) is also slated to benefit from in excess of $100 million as a subvention/grant from the Education Ministry.

According to the accompanying explanation in the financial documents, the money is in part for the re-accreditation of the School of Medicine. Another $89 million is also said to be used for the “expansion of student and staff research and development which is mandatory for all universities and colleges globally.”

It was pointed out that the University of Guyana is obliged to fund all aspects of the costs associated with the site visit of the School of Medicine for the re-accreditation.

Another of the provisions being requested by the Finance Minister is the sum of $501 million. That money, according to the Finance Minister’s Financial Paper, a “provision to meet payment in accordance with the settlement agreement in regards to the Hags Bosch landfill site.”

It was explained in the financial document that Government had made a settlement agreement with the operator of Haags Bosh landfill site totalling $1.8 billion.

Payments to that operator – BK International – will be made in three tranches, according to the financial document laid out by Minister Jordan.

The supplementary request for the payment to BK is said to facilitate 68 per cent of the payments in 2016 with the remaining amount to come out of the 2017 Budget.

The document also outlined that $194 million has been identified for the acquisition of two engines for the aging MV Kimbia. Other allocations in Financial Paper 2/2016 also targets the rehabilitation and equipping of the National Data Management Authority building to facilitate the establishment of the Centre of Excellence for Information Technology and provisions for the Civil Defence Commission for the establishment of the national Emergency Monitoring System.

The Special Organised Crime Unit (SOCU) also benefits from a $20 milliom allocation as part of additional resources to pay for salaries and related operational expenses of the Unit, since SOCU is now shifted to the Public Security Ministry from the Ministry of the Presidency.

Minister Jordan, following his presentation to the House, indicated that Government is looking to have the provisions scrutinised and voted on Monday, when the House meets for its final session before proceeding on its annual recess.

While in Opposition, the A Partnership for National Unity/Alliance For Change (APNU/AFC) coalition had consistently criticised the then People’s Progressive Party/Civic (PPP/C) Administration for its resort to the Contingency Fund, as being reflective of bad budgetary planning in addition to an abuse of the Fund.

During 2014, the then PPP/C Administration under the hand of Finance Minister, Dr Ashni Singh, had resorted to extra-budgetary measures to the tune of $4.5 billion; monies the then APNU/AFC had labelled ‘illegal spending.’