The Fiscal Management and Accountability Act1986 27 Jun, 2012
Minister within the Ministry of Finance [Bishop Edghill]: I speak to the motion that is before this House which is in the name of the Hon. Member Mr. Carl Greenidge. Having read and studied the motion, and listened to him in the presentation, I wish to make a number of observations.
Firstly, I would want to state that the position of the People’s Progressive Party/ Civic (PPP/C) administration, and what we have submitted to and we are committed to, is to ensure public accountability of all public money. I wish to refer to the first clause in Mr. Greenidge’s motion which suggests that all public money is equated to and equal to what is in the Consolidated Fund. I wish to state that the Consolidated Fund is just a subset of public money. It is not the sum total of public money. In the Fiscal Management and Accountability Act, section 37, it describes:
“All public money shall be classified as either -
a. received moneys;
b. moneys in the Consolidated Fund, including any moneys in the Contingencies Fund;
c. moneys in an Extra–budgetary Fund;
d. drawn moneys; or
e. moneys in a Deposit Fund”.
This Act envisages that there will be public money that is not in the Consolidated Fund. This motion, which Mr. Greenidge is bringing to the House, is basically seeking to amend this Act and I am advised, Sir, that a motion cannot amend an Act. [Mr. Nandlall: It violates the Act.] It violates the Act.
Mr. Speaker: Who advised you, is it the Attorney General? You are right about a motion not being …
Bishop Edghill: Yes, Sir, I have been properly advised.
Mr. Speaker: Okay.
Bishop Edghill: I promise never to mislead this House…
Mr. Speaker: Knowingly.
Bishop Edghill: Knowingly. Sir, I would like to state that the Government is aware that we have a responsibility to account for all public money; we intend to do that, and we have been doing that. What we are having here is a re-creating of a new environment where we are seeking to take a subset of all public money, which is the Consolidated Fund, and created a facility that says that it should become a sum total of all public money which this Act does not allow. There is nothing illegal about having public money outside of the Consolidated Fund. I would like to establish that, Mr. Speaker.
There is adequate mechanism in place for the supervision and management of public money. I have listened to Mr. Greenidge … [Mrs. Backer: It is the Hon. Member.] The Hon. Member. I have listened to Hon. Member Mr. Greenidge. Sir, I have been advised that in this House we should treat all Members as honourable and their motives must be considered as honourable. I am assuming that the motive of Mr. Greenidge, the Hon. Member, in bringing this motion, is that there is some concern on his part as it relates to the manner in which public money is being accounted for, in his opinion.
Mr. Greenidge: Sorry, Mr. Speaker, can I?
Mr. Speaker: Mr. Greenidge, I think he is imputing good motive on your part. He said your motives are good and he presumes them to be good. We are in a debate and you are going to hear things that would make you uncomfortable, but I am not going to be allowing a Point of Order for everything that makes a Member uncomfortable. Proceed.
Mr. Greenidge: Sorry, Mr. Speaker, may I? I have no difficulty with what you have said as regards the question of honourable. That is not, in fact, what I am rising to. I am just wanting to confirm that the motion is here not because I believe something…
Mr. Speaker: Mr. Greenidge, you have a right to reply.
Mr. Greenidge: There has been even a consultancy paper…
Mr. Speaker: We are in a debate and you are going to have Members having their opinions, as you were allowed yours earlier. Go ahead Bishop.
Bishop Edghill: We are dealing here with an issue of seeking to create a mechanism that is contrary to what the law allows. A lot of these agencies, which are now being called extra– budgetary agencies, may I submit to this honourable House that this is no innovation of Guyana, of having extra–budgetary agencies. Just last weekend many of us participated in a two-day workshop and we discovered in those discussions that some of the more modern democracies, and we had the experiences of Canada, where there are crown corporations which are the equivalent to our extra – budgetary agencies - public corporation, crown corporations, corporations - whose funding does not make a call on the Consolidated Fund and their accounts are handled separate and apart from that entity. We learned that over the last two days, as provided for by the law. It was clear; the facilitators made that very clear. I am making the point that there is no magical innovation, which for some motive or reason, that is hidden that there are extra – budgetary agencies. Having done my research, I would have realised that this parliament, not necessarily the Tenth Parliament, but right in this House, laws were passed to enact and to govern many of these agencies. Many of these agencies, which are set up by way of Acts of the Parliament, whether it was the Seventh, the Sixth or the Fifth Parliament, or whatever the case might have been, provided that these entities, which are now called extra – budgetary agencies, exist. They exist within a particular framework. They operate within a particular way. They have their own governance structures and this House would see audited reports. They are expected to provide annual reports and audited reports which are laid in this House. These funds do not just exist in thin air where they are not subject to public scrutiny, and they are audited by the Auditor General. The law makes provision that every one of them be audited by the Auditor General. The Auditor General is directly responsible for auditing these funds.
What is important is that these agencies have their own governance structures and they operate their own accounts. These governance structures, if public accountability is what we are seeking to achieve, already provide for public accountability. In many of these agencies there is a statutory body; there are workers’ representatives on their boards, private sector representatives on their boards, political parties’ representatives on their boards, both from the Government and from the Opposition. I think this is giving expression to article 13 of Constitution where people are being involved and are being encouraged to be involved. What we are talking about here is entities that exist where scrutiny exists at levels that is easier to detect any wrongdoing or anything that might raise a red flag because there are the people who are directly involved - the stakeholders are there, the workers representatives are there, the private sector is there.
I would want to also offer in my response to Mr. Greenidge’s and the presentations that he would have made, the fact, that the Auditor General audits, or we might even want to say causes to be audit, because some of the work is contracted out to private audit firms, all of these entities, under the law, are subject to these audits. The Hon. Members of this House, the representatives of the people of Guyana and the people of Guyana, as a whole, can have the information as it relates to what is happening in these agencies.
As it relates to the transfer of funds, from extra-budgetary agencies to the Consolidated Fund, extra–budgetary agencies have been transferring funds to the Consolidated Fund in keeping with the necessary laws that governs that agency and based upon decisions made by their Boards of Directors in keeping with their governance structure. As in the case of NICIL, which seems to be attracting quite a lot of attention, I have consulted with the executive director and he has advised me that in the last one year one billion dollars was transferred from it to the Consolidated Fund. There is no issue, here, as it relates to the non–transferral of funds.
If we are to follow the instructions of this motion that is before us - I do not claim to be the brightest in this House and I will never claim to be - I notice that there is some contradiction here. The mover of this motion, the Hon. Member, highlights, in the second WHEREAS clause that:
“AND WHEREAS section 39 (1) of the Financial Management and Accountability ACT 2003 permits the establishment of Extra – Budgetary Funds by legislation;”
The establishment of Extra – budgetary Fund is admitted and acknowledged, but in the final resolve clause he is seeking to bring an end to that by asking that all moneys immediately be paid into the Consolidated Fund. There is some confusion that exists here. This, I think, is creating what is called an operational nightmare. I have thought this thing through: If all of the moneys are transferred into the Consolidated Fund, I would want to ask… The Hon. Member Mr. Greenidge cited the GGMC. If the GGMC is required to make some purchases of a piece of equipment in keeping with its operations and all of its moneys are transferred into the Consolidated Fund it has to wait until there is an Appropriation Act, because the only way in which money can get out of the Consolidated Fund is by an Appropriation Act. It means that the governance structures are being collapsed and an operational nightmare is being created for all of the entities.
In this time, what we sought to get away from, when this honourable House enacted the legislation, is to give these entities more leverage, in terms of governing themselves and operating in a very professional manner and being able to deliver goods and services and to bring in revenue for the state. It will become, I should say, if this motion is carried, an operational nightmare. May I say that there will be interrupting and collapsing of existing governance structures in all of these extra–budgetary agencies, and this is what this motion is seeking to do. The Board of Directors will become useless. The decisions of the board will be subject to the approval of this honourable House, because, no matter what the board says or decides, in order for financial matters to be dealt with we will have to come to this House with an Appropriation Bill, it has to be debated to become an Appropriation Act, before these entities are financed. I am sure that the best of us sometimes overlook some of these issues and I am sure the Hon. Member, who is moving this motion, may want to consider that this motion, if carried, would, in essence, be interrupting and collapsing the governance structures of all of these agencies.
We are asking this Tenth Parliament to undo what previous parliaments would have done by passing laws, creating statutes that govern these entities, and, as I said, we are using the method of a motion to amend laws. I am not even sure that if this motion is carried if it would be legal and legitimate or there can be a facility for its implementation, especially when some of these entities exist based upon existing statutes and laws. It is really a matter that we should rethink and look at.
These extra –budgetary agencies should - I emphasise “should” – be subject to public scrutiny. The law allows for it. I would think that if there are dissatisfactions which exist, those should be raised; mechanisms should be put in place for the strengthening of that kind of scrutiny and accountability if that is the concern, but certainly this motion, as envisaged, leaves me, as a Member of this House, with real confusion in my mind. Number one, we are establishing… Yes, there can be Extra – budgetary Funds; the motion states that. The motion sought to suggest that all public money must go into the Consolidated Fund and yet these agencies have to operate. I am not sure, I am not clear, if with the passage of this motion, we close all the accounts that exist for every extra – budgetary agency and they now go into the Consolidated Fund, that we have remedied a concern that exists.
What we basically would be doing is interfering with, what I would have heard Members of both sides of this House asked for, which is, good governance. Maybe the path towards it differs on how we should get there, but I am certain that there is an agreement in this House that what is required is good governance. I would think that governance structures that exist in all of these extra- budgetary agencies, which allow for broad base participation - all the stakeholders being on board, playing meaningful roles, being audited by the Auditor General, have to bring annual reports to the National Assembly and their accounts are scrutinised -… If we need to strengthen, we will strengthen, but I seriously want to ask the Hon. Member, and the mover of this motion, to re–think the paths that he is choosing and may I also say that what we are really asking, here, is to amend the laws. We would have to amend all of those statutes that would have established those extra – budgetary agencies, we would have to be amending the Fiscal Management and Accountability Act and a motion, Sir, I am advised, cannot make such an amendment.
Thank you. [Applause]
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