Complaint and Brief Re: Illegal spending by ASHNI SINGH and others

 
FORMAL COMPLAINT: The following complaint is made, that is, that:
Minister of Finance, Dr. Ashni Singh, of the Ministry of Finance at Main Street, Georgetown together with other officials at the said Ministry of Finance and elsewhere in other Ministries and Government Agencies, namely the Office of the President, Ministry of Amerindian Affairs, Ministry of Public Works, and Ministry of Health have misused, misapplied, and improperly disposed of public monies to the extent of $4.533B during the period ending June 16^th, 2014 for financial year 2014, by knowingly permitting contraventions of the Fiscal Management and Accountability Act 2003 contrary to Sections 48 and 85 thereof.
This formal complaint, couched in simple terms for a layman’s understanding, is but an accusation made against Minister Ashni Singh and other Government officials that they spent the sum of $4.533B illegally when, not having been given legislative authorisation for spending this sum they proceeded to spend this sum. Exactly this kind of misconduct is made an offence under the Fiscal Management and Accountability Act 2003 by a conjoint application of sections 48 and 85 thereof.
A BRIEF OF THE FACTS AND LAW:
The Law

1. The Supreme Law of Guyana is      the Constitution.  Under Title 8 “Finance”, provisions are made in      articles 216 to 221 which govern the appropriation of revenues or public      monies for purposes of spending. These provisions are but a distillation      of the Parliamentary practices of England’s House of Commons concerning      financial matters, which Guyana inherited at Independence in 1966 and      which are in use up to today in our Guyanese equivalent, the National      Assembly of Guyana.

1. An important, most paramount      principle concerning spending of public monies is that adumbrated in      article 217 of the Constitution. It says:
2. No moneys shall be withdrawn      from the Consolidated Fund except…

1. to meet expenditure that is      charged upon the Fund by this Constitution or by any Act of Parliament; or
2. where the issue of those moneys      has been authorised by an Appropriation Act; or
3. where the issue of those moneys      has been authorised under article 219.

Where any moneys are charged by this Constitution or any Act or Parliament upon the Consolidated Fund or any other public fund, they shall be paid out of that fund by the Government of Guyana to the person or authority to whom payment is due.
No moneys shall be withdrawn from any public fund other than the Consolidated Fund unless the issue of those moneys has been authorised by or under an Act of Parliament.
Parliament may prescribe the manner in which withdrawals may be made from the Consolidated Fund or any other public fund.”
On any reading and interpretation of this article 217, the Executive arm of the State, or what is popularly called the Government, has no inherent power to appropriate money out of the Consolidated Fund nor to draw down money from the Consolidated Fund except under the Constitution or an Appropriation Act passed by Parliament. The purpose and intent of the article 217 is that ultimate control of public money resides in Parliament or the Legislative arm of the State which in Guyana means the National Assembly and the President.
 

1. Indeed the initiative for      proposed appropriations for purposes of spending belongs to the Executive      arm of the State in accordance with article 218 of the Constitution. So      only the Minister of Finance or some designated Minister can bring an      Annual Estimate or a Supplementary Estimate and the accompanying Appropriation      Bills for approval by the Assembly. In other words, the Minister will      request and the Assembly will grant as requested or grant as amended. This      allocation of functions and responsibilities by these two separate arms of      the State is in accordance and in consonance with the arrangements      existing in all countries which derive their constitutional traditions      from England. And it is precisely because the National Assembly is made up      of duly elected members that it has a say on appropriations and spending      of public monies. Control of the public purse is a fundamental      characteristic and value of Parliamentary Government established under the      Guyana Constitution.

1. Since Constitutional provisions      are by their nature general and invariably attempt at capturing principles      and precepts, there is need for accompanying legislation to give more      specific and direct instructions to ensure that the letter and spirit of      the Constitution are met. One such piece of legislation in this regard      which sought to ensure compliance with the Constitution on matters      financial is the Fiscal Management and Accountability Act 2003      (hereinafter referred to as the FMA Act 2003).

1. The long title of this FMA Act      2003 encapsulates succinctly what it is - “An Act to provide for the regulation of the      preparation and execution of the annual budget; the receipt, control, and      disbursement of public monies; the accounting for public moneys; and such      other matters connected with or incidental to the transparent and      efficient management of the finances of Guyana.”

1. Clearly this FMA Act 2003      specifically provides for the law and practice governing appropriations      and spending of public moneys. Its provisions have the object of      preventing and counteracting misappropriation by unauthorised, fraudulent      and other means. It provides for a number of offences which may be      committed by persons who fail to act in accordance with its provisions.      Criminal sanctions are stipulated.

1. Section 16 of the FMA Act 2003      is a core provision which wholly endorses article 217 of the Constitution.      It provides thus: “There      shall be no expenditure of public monies except in accordance with article      217 of the Constitution.” Its marginal note is most      instructive -“No      expenditure without appropriation.”

1. There is thus this almost      absolute rule which governs Guyana’s public finances. It is that there      must be no spending without appropriation, or in other words, no spending      without legislative authorisation. For every item of spending, there must      have been some Parliamentary approved appropriation or authorisation. This      rule is very strict in the sphere of public finances in all      Westminster-type democracies.  But it is subject to a      constitutionally provided exception namely, that there can be spending      without prior appropriation if there is an emergency situation, say for      example the 2005 Great Flood.  However, once moneys are so drawn out      of the Contingency Fund, which is a sub-fund of the Consolidated Fund, the      Executive through the Minister of Finance must come to the National      Assembly at the next following sitting and report how much he spent, to      whom it was paid, and its purpose. A Supplementary Appropriation Act      covering these advances which were paid out will have to be approved by      the National Assembly. So here there is a post facto legislative authorisation      which must legitimise and regularise such spending. This happens when the      situation is urgent, unavoidable and unforeseen.  But this kind of      urgent, unavoidable and unforeseen circumstance must only see such      expenditure totaling no more than 2% of the previous year’s Annual Budget.      This very limited quantum of prior expenditure without prior appropriation      emphasises the paramount principle of “appropriation before expenditure.”      This contingency exception is provided for in article 220 of the      Constitution and Section 41 of the FMA Act 2003.

1. To make it all the more      emphatic and unequivocal, the existence of this rule of “appropriation      before expenditure”, is the reason why sections 48 and 85 were provided      for in the FMA Act 2003.

 
Section 48: “A Minister or official shall not in any manner misuse, misapply, or improperly dispose of public monies.”
 
Section 85: “An official who knowingly permits any other person to contravene any provision of this Act is guilty of an indictable offence and liable on conviction to a fine of $2,000,000.00 and imprisonment for 3 years.”
 

1. Criminal liability can befall      the Minister of Finance or any of his underlings at the Ministry of      Finance by a conjoint operation of sections 48 and 85 of the FMA Act 2003      if there was any spending of public moneys without appropriation first      had; or, spending not legislatively authorised post facto in the exceptional case      of the “urgent, unavoidable and unforeseen” category of a contingency      spending. This was exactly what the framers of the FMA Act 2003 wanted to      criminalise. This was the context that informed the text of Sections 46      and 85.

 
The Annual Appropriation Act 2014 and Financial Paper No. 1 of 2014.
 

1.  In the deliberation      during the course of the Committee of Supply stage in the National      Assembly, in the Annual Estimates of 2014, there were  proposals for      appropriations from the Consolidated Fund, among a huge number of others,      for the following:

• Current Estimates for Office of      the President- Administration Services - $1.335 B,

Capitol Estimates for Office of the President- Administration Services - $3.846 B

• Ministry of Finance- Policy and      Administration Capital Estimates - $22.284 B
• Ministry of Amerindian Affairs-      Amerindian Development Capital estimates - $1.14B
• Ministry of Public Works-      Transport—Capital Estimates - $6.785 B
• Ministry of Health-       Regional – (Specialty Hospital)---$1.352 B

1. These specific programmes made      up of a number of line items were voted down, meaning that they were not      legislatively authorised. So no expenditures could have been forthcoming      from the Consolidated Fund to provide public monies for them. They totaled      a sum of approximately $37B for the period ending December 31^st,      2014.  

1. Notwithstanding there being no      appropriation for these programmes, which meant a total prohibition of      spending thereon in accordance with the Constitution (article 217) and the      FMA Act 2003 (section 16), the Minister of Finance went ahead and spent      monies on these programmes which as I said were by a majority vote in the      National Assembly not voted for. The Appropriation Act of 2014 [attached      and highlighted] will reflect that there was no appropriation for these      programmes. The Appropriation Bill of 2014, however, [attached and      highlighted] reflect these sums proposed. Hence, there ought not to be any      spending of monies towards these items under these heads and sub-heads.      Such spending would mean a total disrespect and disregard of the      Constitution and the FMA Act 2003; and, a frontal violation of section 46      and section 85 of the latter.

1. But such spending, though      expressly prohibited by the National Assembly on these programmes and line      items, is exactly what the Minister of Finance proceeded with.      Notwithstanding no appropriation for these heads, as they are called, the      Minster spent monies on them for the period ending June 16^th,      2014 totaling an amount of $4.533B as is confessed to by Minister Ashini      Singh, (without any circumstances of oppression  as to make it an      involuntary confession), in the Financial Paper No. 1 of 2014 hereto attached.      He obviously did so by authorising drawing rights through other senior      officials of his Ministry. 

1. This being so I make formal      complaint and report that the Minster and other officials in his Ministry      have committed a violation of the provisions of the FMA Act 2003. He has      spent monies without having obtained legislative authorisation therefor.      He and these other officials in the relevant Ministries have expended      $4.533B up to June 16^th, 2014 without any appropriation      therefor. This constitutes a misusing, a misapplication, or an improper      disposal of public monies totaling $4.533B for a period up to 16^th      June, 2014. Such a violation contravenes section 46 and Section 85 by      virtue of knowingly permitting other persons to contravene the provisions      of the said Act. From every indication this criminal violation will      continue up to 31^st December 2014.

 
The Suspect Minister’s anticipated Defence
 

1. It is to be noticed that the      Finance Minster has pointed out that he does not need to get legislative      authorisation first, or any appropriation before he spends public monies      on these programmes. He asserts that he can spend without appropriation      because he has article 218 3 (b) which comes to his aid in permitting him      to do so. This however flies in the face of the explicit, unequivocal      language of article 217 and section 16 of the FMA Act 2003.

1. This article he hangs his hat      on so opportunistically and erroneously provides thus:

Article 218 (3) (b): “If in respect of any financial year it is found that any monies have been expended for any purpose in excess of the amount appropriated for that purpose by the Appropriation Act or for a purpose for which no amount has been appropriated by that Act, a supplementary estimate or, as the case may be, a statement of excess showing the sums required or spent shall be laid before the Assembly by the Minister responsible for finance or any other Minister designated by the President.”

1. As it relates to a Statement of      Excess, this article 218 (3) (b) he feels has given him a blank cheque to      spend without prior appropriation. It does not! It is merely a provision      as it relates to a Statement of Excess which is prescriptive of what must      be done to bring to the attention of the National Assembly of what was      mis-spent in any financial year for purposes of signing off the accounts      for that year!

1. This article does not and must      never be read to give a carte      blanche to the Minister of Finance to legitimise or legalise      his mis-spending in contravention of the Constitution and the FMA Act      2003. It is only for the purpose of bringing transparency to the National      Assembly as to the financial excesses of the Executive arm of the State      and its excessive spending over a period of that financial year. So that      in the case of a Statement of Excess the elected officials will be made      aware of how much more was spent and by which Agencies or Departments, as      against what was appropriated in the Annual Appropriation Act. And in the      case of the Statement of Excess, after having seen what the nature of these      extra or excess spendings are, the Assembly may proceed to legislatively      validate  them, hence signing off on them as a State must do having      discovered mis-spendings. This certainly does not mean that the Minister      and his officials who would have created and caused these unauthorised      spendings to the tune here in excess of $4.533B are to be let off the      criminal hook! This is so even if the National Assembly supports the      Statement of Excess with the consequence as provided in article 219 (2),      that it will be authority for the issue of the sums in question from the      Consolidated Fund after the relevant Supplementary Appropriation Bill. And      so much worse if it is not supported!

1. This Finance Minister, from all      appearances, has completely misapprehended the concept of Statement of      Excess. And by logical extension, through this misapprehension, he feels      he can use this as a device to bypass the non-approvals and disapprovals      of Programmes and line items voted on by the National Assembly at the      Annual Estimates in April, 2014. This is arrogance. But it is also      criminal. He unfortunately feels that by bringing a Statement of Excess he      will immunize himself from criminality. Not so at all!

1. The question must be asked -      What is a Statement of Excess? Since our Parliamentary practice and public      financial arrangements concerning the State’s revenues and the law and      practice governing same originated out of England, it is England we have      to go to understand the text of Articles 218 (3) (b) and 219 (2). As was      said earlier it is out of an understanding of context that the text of      these articles of our Guyana Constitution will be appreciated. Our      Standing Orders, more particularly Standing Order 113 of the National      Assembly also point us to the direction of England to clarify certain      matters which we have not provided for. And generally, if not almost      exclusively, the resort is Erskine May’s Parliamentary Practice to find      clarity.

1. This is the learning which is      documented in this authoritative textbook in Chapter 27 titled “Expenditure: Supply”      but more particularly under the subhead “Excess votes” as page 702 of the      21^st edition.  

          “D. EXCESS VOTES
          The need for an excess vote arises when a department has carried expenditure upon
          a service beyond the amount granted to that service, during the financial year for
          which the grant was made.
          Procedure on excess votes
Demands for excess grants are not brought before the House of Commons until the following steps have been taken. When the exact amount of the excess expenditure for the past financial year has been ascertained on the completion of the audit of the appropriation accounts, the Comptroller and Auditor General reports to the House and this report comes before the Committee of Public Accounts. After examination, the Committee makes a report to the House, if possible in February or early March of the financial year following that in which the excess occurred, setting out the various excesses, and stating the objections (if any) to their being approved. The Treasury then presents a Statement of Excess, setting out all the instances of excess expenditure for the year in question, which is presented as a single vote for each branch of the estimates in which excess expenditure has occurred. If the Committee of Public Accounts reports that it sees no objection, the question on excess votes may be put without debate on a  day not later than 18 March, pursuant to Standing Order No. 53 (3) (see p 707). The vote is normally included in the March Consolidated Fund Bill, and receives final sanction in the next Appropriation Act.”
23. This being what a Statement of Excess is all about, it is clear that the Finance Minister is misapplying it upon the National Assembly for the purpose and in the manner which he has done in this Financial Paper No. 1 of 2014. It is clear too, from this learning that a Statement of Excess ought never to be manipulated in such a manner as to be used to do something it never can do, that is, to make spendings by the Finance Minister legal in the face of the National Assembly’s disapprovals or non-approvals of appropriations therfor. The Finance Minister cannot by his abject misconstruction of Statement of Excess as mentioned in Articles 218 (3) (b) and 219 (2) of the Constitution transmute what was intended as a correctional measure by the National Assembly for excessive spending in any financial year, to authority to spend in defiance of the National Assembly’s  no-vote on certain programmes and line items. Absolutely not!
24. There is further learning to be had from a recent publication by David McGee THE BUDGET PROCESS – A Parliamentary Imperative (2007). At pages 113 to 115, this is what is stated -
          “UNAPPROPRIATED EXPENDITURE
The approvals given by the legislature up to the end of the financial year or other period to which those approvals relate constitute the authorities for public funds to be committed to those purposes. The use of public funds or purpose not encompassed by those approvals or the expenditure of moneys in excess of the amounts approved is, subject to a government’s legal power to transfer appropriated amounts to other purposes, unlawful. Excess or unauthorised expenditure may occur deliberately or inadvertently. It may be identified by the government itself or be revealed in the normal process of auditing government activities. Significant illegalities are likely to be the subject of a report by the Auditor-General and come to the attention of the Public Accounts Committee.
Unlawful expenditure of any kind is a matter of concern. The integrity of the budget process and, even more, the rule of law depends upon there being clear legislative authority for the expenditure of public money. However, there is particular concern where unapproved expenditure is a large component of public spending, even if steps are subsequently taken to validate this. A large disjunction between budgeted expenditure and actual expenditure suggests a systemic deficiency in governance arrangements…”
……….“Any unlawful expenditure that is revealed will require the authorities to consider taking action to recover the expenditure. And it may involve initiating a prosecution or surcharging the individual concerned. Where there is evidence of corruption or extreme lawlessness, such action will be justified. If this occurs on a large scale a specific inquiry either by a legislative committee or a commission of inquiry with judicial powers may be appropriate. However, unappropriated expenditure does not only, or even mainly, occur in these ways. It arises from inefficiencies, inadequate monitoring, mistakes and poor systems. The Auditor- General will be concerned to reveal these and suggest ways of eliminating or reducing them. But this still leaves the question of the unlawful expenditure not accounted for.
Most legislatures are therefore presented with legislation to validate expenditure or write off losses from the previous financial year. In a sense this forms a signing off of the public accounts relating to that year by the legislature. The expenditure submitted to the legislature for validation in this way will usually have to be the subject of a report by the Auditor-General. In addition, the Public Accounts Committee and any relevant sectoral commission may have examined the expenditure. In South Africa it has been specifically recommended that a portfolio committee in rep on a department should make recommendations as to how the unauthorised expenditure is to be dealt with (National Treasury South Africa 2005).
The process of validating unlawful expenditure should not be merely an academic exercise. Apart from the culture of non-compliance with appropriation rules that this might promote and, appear to be endorsing, approval of unappropriated expenditure should be seen to be part of a process of continuous improvement. As a condition of validating expenditure legislatures should call for assurances that steps have been taken within government to reduce the likelihood of the same thing happening again. The Public Accounts Committee’s or the Auditor-General report must be a catalyst for such improvement. The extent to which the public sector learns from this process and internalises good practice in consequence has already been discussed. But a rigorous legislative process for considering unauthorised expenditure and treating it with the seriousness that it deserves, is an essential part of a process of improving public sector performance.”
25. Hence, the Finance Minister Ashni Singh and others cannot properly use Article 218(3) (b) to come to their defence for spending unlawfully. To so interpret this article is to wrench the Constitution’s provisions from its text and context to concoct a position and jurisdiction the Constitution never catered for. This fallacious, flawed reading and applying of Article 218 (3) (b) will give the Finance Minister a carte blanche authority to spend in the face of a debated and deliberated rejection of those initially proposed appropriations and spendings for those programmes. This will constitute an overriding power in the hands of the Finance Minister over and above the National Assembly by a remarkably ridiculous interpretation of our Constitution. Our Constitution framers never gave unbridled, unlimited and total authority to the Finance Minister to spend and to commit us to spending especially on line items or programmes or Agencies we have assertively said ‘no’ to. And of which he, the Finance Ministers and officers in his Ministry know we said No!
26. So to allow this flawed interpretation of this article to effectuate such an anomaly, will terribly bastardise the National Assembly to the point of being a mouse; and, the Constitution, in accordance with such a reading and interpretation of it, to the point of being a menace. The framers could have never permitted the Parliament’s power of the purse to be denuded, degraded and denied this way. Money matters from time immemorial have always been committed to the surveillance of the House of elected representatives. In America it is Congress, in UK it is the House of Commons, in India it is the Lok Sabha. Here it is our National Assembly. Why? Because public money belongs to the People and they ought to grant approval as to how it is expended and to know the manner of its expenditure. Under our Constitution, Article 9, “Sovereignty belongs to the people, who exercise it through their representatives and the democratic organs established under this Constitution.”   The Finance Minister and the other officials must know that this Assembly is where the elected representatives of the people of Guyana reside. Further, they must know that by the political process of deliberation in this Assembly by majority vote, decisions are taken by those elected representatives on behalf of the People as to how the People’s monies are to be spent. We by majority said ‘No’ to NCN and GINA, and because of the bungling by bundling we further said no to a number of good programmes like IAST, and the First Lady’s Subvention and so on. How on earth after we vicariously exercise the sovereignty of the People by not approving spending in these programmes, the Minister of Finance dare to spend monies on these line items and programmes not approved? And to seek umbrage under an article 218 (3) (b) which does not apply!
 
27. I urge as complained herein, that the Police proceed to put the allegation to the Minister of Finance that he has contravened provisions of the FMA Act 2003 when he misused, misapplied, and improperly disposed of public monies as evidenced in Financial Paper No. 1 of 2014, and that he be read his rights. I bet he will remain silent. Thereafter, I urge that statements from senior ranking officials and officers of the Finance Ministry be taken as to the system for spendings. Every one of them will tell the Police that before there can be spending there is supposed to be an appropriation and none was obtained concerning this $4.533B.
28. The criminal law is there not only, as Gypsy sang, for the little black boy, but also for those maharajahs in positions so high.
 
 
Khemraj Ramjattan
Attorney at Law; MP; Leader of AFC
18^th July 2014