Govt’s misuse of Contingency Fund “executive lawlessness” – PPP

Auditor General Report findings

The Government’s misuse of the Contingency Fund, as highlighted by Auditor General Deodat Sharma in his 2016 report, is being described by the political Opposition as “executive lawlessness.”

During a press conference on Saturday, People’s Progressive Party parliamentarian Juan Edghill took the Government to task for dipping into the Contingency Fund. These withdrawals were for what the Auditor General had described as “routine expenses.” According to the law, the Fund should only be accessed for emergency purposes.
Speaking to reporters at the Opposition Leader’s office on Church Street, Georgetown, Edghill pointed out that the Contingency Fund is a subset of the Consolidated Fund.
“About two per cent of the Consolidated Fund is in the Contingency Fund. So more than (what) should have been used was used, so that’s one breach. The second breach (is that) to get access to the Contingency Fund is only based upon certain criteria, according to the fiscal management and accountability act.”
He added that the Government broke the law when they tapped into the Contingency Fund for monies for “normal expenditure which should have been drawn from the Consolidated Fund. It’s what is called executive lawlessness. They accused us of doing those things when we were in Government and promised the people of Guyana that they would never do it.”

Zeroing in on withdrawals from the Contingency Fund for the D’Urban Park Project, Edghill was highly critical of the fact that payments for works on the edifice even featured on the statement of receipts. He noted that the structure was used for entertainment and national celebrations and as such, could not be classified as emergency expense.
The 2016 Auditor General Report had red flagged the fact that the Consolidated Fund of Guyana is in an overdraft status. As at the ending of last year, the Fund reflected an overdraft of $67.5 billion and the cash book, $86 billion. In 2015, the Fund was overdrawn by $42.6 billion.
According to the Auditor General, the difference of $18.5 billion between the bank and the cash book was due to a deposit of $6.7 billion not being debited to the cash book. There was also some $22.7 billion in un-presented cheques. It was also revealed that deposits totalling $5.3 billion were not credited to the bank account, while debit advances of $1.6 billion were not credited to the cash book.
In its response, the Finance Ministry affirmed that the Fiscal Management and Accountability Act 2003 makes provisions for the account to be overdrawn in order to make up for cash shortfalls while implementing the budget.
“The Ministry of Finance also ensured that no further expenditures were being affected against the appropriation allotments after December 31, 2016, by activating the controls within IFMAS (Integrated Financial Management System).”
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.”

Contingency Fund
The report had also found that Government made withdrawals that totalled over $900 million from the Contingency Fund. The monies were used for expenses related to the Army, the D’Urban Park Project, and the Sussex Street drug bond. The Sussex Street bond had come in for much public scrutiny after it was discovered that is was owned by a A Partnership for National Unity/Alliance For Change party affiliate.
In his statement on the issue, the Auditor General had expressed disappointment that for the period under review, nine advances were granted from the Contingency Fund for routine expenditure.