Introduction
My blog of April 20, 2014 was captioned Doubts about Government respecting the budget non-approvals. That e-column followed the passage of the Appropriation Act 2014 introduced by the Minister of Finance and passed on April 16, 2014. In that column, I noted that the passage of the Appropriation Bill had given way to skepticism, suspicion and speculation and I expressed three possible responses by the Government: returning to the courts; bringing the first Supplementary Appropriation Bill for 2014 to restore the noncontroversial items which were victims of collateral damage, or thirdly that the Minister of Finance would “simply release the funds that [had] been removed by the Opposition and accepted by the Government in the amended Appropriation Act.”
It is now known that the government, through the Minister of Finance, chose to spend public moneys on items in programmes that had been specifically rejected by the National Assembly. Last Thursday, by way of Bill No 12 of 2014 the Minister presented to the National Assembly for rubberstamping $610,404,711 for current expenditure and $3,943,357,280 for expenditure under the capital programme, a total of $4,553,761,991.
In today’s e-column I seek to explore whether the Minister of Finance has acted properly, legally and constitutionally and the potential consequences of his action which one presumes he pursued on the advice of the Attorney General Mr. Anil Nandlall. According to the Bill presented by the Minister which comes up for debate and approval/non-approval next Thursday, the expenditure is authorized under Article 219 of the Constitution and sections 24 and 41 of the Fiscal Management and Accountability Act. I have serious doubts about that. But let us look at each of them.
The Constitution and the Fiscal Management and Accountability Act
Article 219 gives Parliament the power to make provision for authorising the Minister of Finance to withdraw moneys from the Consolidated Fund to meet expenditure for up to four months of the year, or until the Budget is passed. Parliament makes financial provisions regarding the receipt and payment of public moneys only in the FMA Act, or specific Acts, referred to in the preceding paragraph. That provision is contained in section 36 of the FMA Act and limits such pre-budget spending to normal services of Government. My interpretation is that the section would exclude most capital expenditure and payments to entities to NCN.
The Minister also claims reliance on section 24 of the FMA Act the marginal note to which is described as “Supplementary appropriation Acts.” Here again, there appears to be certain difficulties since sub-section (1) of the section refers to “Any variation of an appropriation….” Since there has been no appropriation for the programmes on which the Minister expended public monies for which he now seeks approval it can be argued that this section does not help him. He may therefore have to invoke article 219 (2) which provides for statements of excess to be the subject of a supplementary Appropriation Bill.
Article 218 (3) of the Constitution, which is referred to in article 219, suggests that “excess” applies only in relation to cases where the amount expended exceeds the amount appropriated by an Appropriation Act, or possibly, where there is likely to be an insufficiency. Again, loose language by the drafters may have led to the belief that article 218 (3) (b) allows for moneys to be expended for purposes for which no amount was appropriated by an appropriation Act. Such an interpretation would make a mockery not only of the entire constitutional framework for spending public moneys, including the necessity for a Contingencies Fund – but also make article 218 (3) (a) entirely unnecessary. What Bill 12 of 2014 does is to reveal that the Government had for nearly two months been quietly spending money in violation of an express non-approval of the National Assembly while it searched the Constitution for what it opportunistically considered loopholes to disregard the concept of separation of powers and to have its own way.
Reliance on section 41 of the FMA Act seems even more tenuous since that section deals specifically with the Contingencies Fund. Each of the fifty (50) attachments to the Financial Paper #1 of 2014 is headed Statement of Excess – 2014, a different concept from Contingencies. In any case, any explanation that the narrative in the Bill is generically worded can hardly be used to make a case for approval for $4.6 billion of public expenditure.
Accident or design
In my view the most relevant Article of the Constitution and the section of the FMA Act were overlooked or ignored by the government and its Attorney General, whether by accident which I doubt, or by design. Article 217 is clear: monies can only be withdrawn from the Consolidated Fund where:
(1) The expenditure is charged upon the Fund by the Constitution or by an Act of Parliament;
(2) The issue of the money has been authorized by an Appropriation Act;
(3) The issue of the money has been authorized under Article 219 of the Constitution.
Section 16 of the FMA Act states that “There shall be no expenditure of public monies except in accordance with article 217 of the Constitution”. Of course, the very Act provides for a Contingencies Fund advance as expenditure out of the Consolidated Fund.
Crocodile tears
Whatever criticisms may be levelled at the drafters of the Constitution including failure to make clear whether “approves” excludes “approves with amendments” and what “excess” unambiguously means, no amount of legal linguistics can support any interpretation of any provision of the Constitution or the FMA Act that allows the expenditure incurred by the Minister of Finance for which he now seeks parliamentary approval. It would take some convincing to make constitutional anything that is unconstitutional and I cannot see on constitutional and legal technical grounds how the National Assembly can give their approval to the Bill. If they do, the Minister can then argue that none of the expenditure was unconstitutional, illegal or improper since the National Assembly subsequently approved them.
Over the past several months, various spokespersons of the government have been lamenting the consequences of the budget cuts particularly the subvention to the student loan revolving fund at the University of Guyana, payments for GINA, NCN and CJIA and the payment of activists under the so-called Amerindian Youth Entrepreneurship and Apprenticeship Programme. We now know that the tears and lamentation were those of the crocodile and that while pretending to cry wolf and wipe tears, the government was systematically and flagrantly violating the Appropriations Act 2014 which they themselves introduced in the National Assembly and supported following the non-approval of the six programmes referred to the opening paragraph of this e-article.
It would seem to me that at the root of this violation and deception are Dr. Roger Luncheon, who has resumed responsibility for the Cabinet’s press conferences and the Attorney General Mr. Anil Nandlall, the principal legal adviser to the Government of Guyana. Acting on their direction and guidance the Government has used its executive authority to usurp the powers and functions of the Constitution and the National Assembly, a mockery of democracy.
Abuse of the Consolidated Fund
Over the years we heard a lot about persistent abuses of the Contingencies Fund. That has now been extended to the Consolidated Fund but on this occasion Bill 12 of 2014 raises real constitutional, legal and administrative challenges. What if the National Assembly does not approve the Bill when it resumes next week? There is an un-replenished amount of $29 million to the Contingencies Fund for the Specialty Hospital which no one seems able to address.
Bill 12 of 2014 is for a vastly different amount – $4.6 billion. Under normal circumstances parliamentary support could have been assured since significant elements of that sum were justifiable. I recall the AFC pleading for some of those items to be brought back to the National Assembly for prior approval of the expenditure. What the AFC did not know was that the Government, presumably after consulting with its constitutionally designated legal adviser, had already been spending the money so there was no need or urgency to bring back any of the items, at least not until now.
Conclusion
The opposition in the National Assembly may consider that they face a dilemma. Can they now not approve those items of expenditure with which they had already said they had no difficulties? Or do they take the position that they cannot approve transactions that are in violation of the Constitution and decisions of the National Assembly and that can create a precedent that may come back to haunt them? This is not simply a difference of opinion or interpretation: it is a major unprecedented abuse by the Executive of the Consolidated Fund which comes under the control of the Legislature.
It is apposite to point out that the Bill and its attachments gave no indication as to how the Government intends to deal with expenditure for the rest of the year. The details seem to refer to expenditure for January to June 2014 which suggests that the Government intends to engage in the same unconstitutional and illegal conduct for the second half of 2014. Parliamentary support for Bill 12 of 2014 would only embolden the Government to repeat the illegalities for the period July – December 2014.
That alone might sway a vote against Bill 12 of 2014. If that happens we have a serious constitutional financial issue where $4.6 billion from the Consolidated Fund has been spent without approval. To treat it merely as unauthorised expenditure would trivialise a development with no precedent in the country.