$170B spent by APNU/AFC in capital funds cannot be fully accounted for – AG

…monies spent without accountability to Parliament

Two months after the new Government took office, Attorney General Anil Nandlall revealed that it was still unable to effectively account for how the former Government spent $170 billion in capital funds.

Attorney General Anil Nandlall

The Attorney General was at the time hosting his programme “Issues in the news” on Tuesday, after a hiatus. According to Nandlall, the new Government is still unable to fully account for how the former Government spent capital funds during 2020 – money which, according to the Fiscal Management and Accountability Act (FMA), the new Government was forced to include in the Budget as spent.

In fact, Nandlall was of the view that since there was no Parliament to approve the funds, the money should not have been spent in the first place. He recalled that when the Government was preparing its 2020 Budget in August, it had to deal with prior expenditures.

“Of course, the law requires us to deal with the expenditures that would have occurred prior to the Budget being passed. And when we totalled those expenditures, they equalled to some $170 billion.”

Former President David Granger

He added that the then A Partnership for National Unity/Alliance For Change (APNU/AFC) Government in seven months – from January to July – spent $170 billion from the Treasury, “90 per cent of which would have been spent illegally, because the Constitution says that until the next budget is passed, you can only spend one-twelfth of the previous budget, which is the 2019 one”.

Nandlall reminded that this one-twelfth provision, catered for in Section 36 of the FMA, was only applicable for Government services, such as payment of wages and salaries for public servants, including nurses, doctors, and the Disciplined Services.

According to Section 36 (1) of the Act, “If an Appropriation Act has not come into effect at the beginning of a fiscal year, the Minister shall be authorised to issue drawing rights on the Consolidated Fund sufficient to fund the ongoing delivery of normal services of Government in accordance with Article 219 (1) of the Constitution.”

Subsection two goes on to say: “Drawing rights issued pursuant to subsection (1) shall, for each month in respect of each budget agency, be subject to a drawing limit of one-twelfth of the amount that was expended by that budget agency in the immediately preceding fiscal year; provided, however, that provision for a payment obligation under a multi-year contract referred to in subsection 55 (1) may be included in a drawing right.”

Former Finance Minister Winston Jordan

The former Government’s spending of capital funds can be traced to at least one project, which is the retrofitting of the Ocean View Hotel into a COVID-19 hospital. According to Nandlall, however, the majority of the money cannot be accounted for.

“They went on a spending spree and blew out $170 billion of taxpayers’ dollars, without any oversight from Parliament. Up to now, we don’t know where that money went, because billions and billions of dollars were spent on capital expenditure, none of which were authorised… we are still in wonder about how to treat with that.

“You cannot spend money on capital expenditure without the Parliament approving it. There was no Parliament. They claimed they built this COVID hospital and when we went in, it was just a skeleton. And they claimed they spent $1.6 billion,” Nandlall said.

The People’s Progressive Party/Civic (PPP/C) Government passed a $329 billion Budget last month. Of this amount, it is understood that the $170 billion was already spent by the former Government either through rollover projects from 2019 or spending for this year.

With the Government unable to account for how most of the monies were spent, it is likely that the Audit Office of Guyana will go over the former APNU/AFC Government’s financial habits with a fine-tooth comb – and record any improprieties in its 2020 report.

Besides the COVID-19 hospital, it is known that the former APNU/AFC Government also spent $10 billion on Wärtsilä generator sets for the Guyana Power and Light (GPL) Inc, which have not even arrived in Guyana.

Junior Public Works Minister Deodat Indar had previously revealed that Government loaned $10 billion to GPL, which was already in a cash-strapped state. It was revealed last year that GPL had run up a deficit of as much as $4.2 billion.

According to the information released, GPL was paid out the $10 billion in tranches: $1.1 billion in April, $4.5 billion in May and $5 billion in June of 2020. While the generating sets are in Finland, the COVID-19 pandemic has meant that their arrival was delayed.