THE MINISTER HAS DONE NOTHING WRONG

December 15, 2013, By KNews, Filed Under Features / Columnists, Peeping Tom, Source

The opposition parties in the National Assembly are reportedly threatening to take action against the Minister of Finance for what they are claiming is expenditure incurred by the Minister in excess of the sums that the National Assembly had passed in the Appropriations Bill relating to Budget 2013.

It is respectfully submitted here that the opinion that the Minister of Finance has committed a wrong or wrongs is misplaced. If the opposition parties take the time to go through the Constitution to appreciate the difference between approval and authorization, to understand the concept of post-approval and to acknowledge that there are some cases where authorization under the Constitution is merely to replenish the Contingencies Fund, they will disabuse themselves of the notion that the Minister of Finance should be sanctioned.

The Minister has done nothing wrong and has acted in accordance with the powers afforded him under the Constitution of Guyana and under the Fiscal Management and Accountability Act.

The opposition parties must accept that not because there is an Appropriation Act the Minister of Finance in meeting public expenditure is absolutely constrained by the amounts detailed in that Act. The Constitution itself makes accommodation, within certain limits, for variations to the amounts in the Appropriation Act. It also authorizes the creation of a Contingencies Fund. And it is the Minister of Finance and he alone, not the National Assembly, who has the sole authority to release monies from the Contingencies Fund.

This Contingencies Fund which is a sub-fund of the Consolidated Fund may be used to meet public expenditure where the Minister is satisfied that an urgent, unavoidable and unforeseen need for expenditure has arisen. As previously explained, common law interpretations of this provision assert that it is not the purposes for which the monies are needed that should be urgent, unavoidable and unforeseen but rather it is the need for the expenditure that should be urgent, unavoidable or unforeseen.

The Minister of course is limited, in that advances from the Contingencies Fund cannot be in excess of 2% of the total Budget of the previous fiscal year. In other words there is a cap to the amount that the Minister can spend from the Contingencies Fund, over which he has sole authority.

Why then, it must be asked, is the approval of the National Assembly necessary for sums used from the Contingencies Fund? Such approval is necessary in order to replenish the Contingencies Fund and should not be construed as authorizing the advances made from the Contingencies Fund.

The Constitution and the Fiscal Management and Accountability Act also permit the Minister to move for a Supplementary Appropriation so as to authorize any releases from the Consolidated Fund to satisfy financial needs for which no appropriation exists or for which the amount appropriated is insufficient. In these instances the Minister requires the approval of the National Assembly to authorize releases from the Consolidated Fund. This is done via a Supplementary Bill.

However, Section 219 (3) (b) of the Constitution of Guyana provides for situations in which monies are expended in excess of the amounts appropriated. An example of this is where the Appropriation Bill passed by the National Assembly only votes $1 for say GINA, but this amount is insufficient to meet expenditure for that entity.

Section 219 (3) (b) allows for situations where sums may be expended from the Consolidated Fund in excess of that which is appropriated. In such cases, the Minister is required to lay before the National Assembly a statement of excess showing the sums spent above that which was originally appropriated. By virtue of this provision, it is respectfully submitted that if the Minister of Finance spends in excess of what was originally appropriated in the Budget, he has not breached the Constitution or any law and therefore cannot be held in contempt of anything.

Obviously it is the National Assembly which is required to grant its approval to all statements of excess spending. But if this approval is for whatever reason not forthcoming, then all that happens is that there is no post-expenditure approval by the National Assembly. It does not de-legitimize the spending.