I am alarmed that the NICIL accounts have not been audited and reported on since 2003
I have been on public record in my view that all public revenues should be placed in the Consolidated Fund and that no public expenditure should be incurred without parliamentary approval. This is a fundamental principle relating to public finance since it ensures transparency and proper accountability for public funds. Any lesser arrangement is not considered proper accountability for taxpayers’ funds and can result in all kinds of allegations of impropriety in the use of such funds, notwithstanding the very best of intentions.
I am heartened by two recent letters appearing in the newspapers in support of my view: one from Christopher Ram entitled “Contrary to what Luncheon claims NICIL is a government company” appearing in the Stabroek News; and the other from Nigel Hinds entitled “NICIL vs. Constitution of Guyana” appearing in the Kaieteur News. I am, however, alarmed to learn that some $50 billion is sitting in the NICIL accounts; that the accounts of NICIL have not been audited and reported on since 2003; and of the arguments put forward by the Minister of Finance, the Head of the Presidential Secretariat and Mr. Brassington seeking to justify the existing arrangement.
As I understand it, the bulk of the funds collected by NICIL relates to proceeds from the sale of state assets. Are these proceeds not public revenues which should find their as speedily as possible into the Consoildated Fund, as required by Article 216 of the Constitution? I do not have any information as to how much NICIL has collected over the years and what expenditures were incurred to date and would have been happy to review the audited accounts going back to the date when NICIL was established. I am nevertheless of the view that any expenditure by NICIL, other than to defray certain expenses, such as those relating to the sale of the related state assets, would be a violation of Article 217 (3) of the Constitution. That article reads as follows: “No moneys shall be withdrawn from any public fund other than the Consolidated Fund unless the issue of those moneys has been authorised by or under an Act of Parliament.” I have no recollection that Parliament has authorised any expenditure from the NICIL accounts neither am I aware that NICIL, as a state-owned company incorporated under the Companies Act of 1991, has the authority to intercept funds that truly belong to the Consolidated Fund and to use such funds for purposes extraneous to the defraying of certain expenses referred to above.
The Constitution is the supreme law of the land, and if there is any inconsistency between any law and the Constitution, the latter prevails, except in situations where the Constitution permits this. For example, Article 216 permits ”revenues or other moneys that are payable, by or under an Act of Parliament, into some other fund established for any specific purpose or that may, by or under such an Act” to be retained by the authority that received them for the purpose of defraying expenses of that authority. In addition, the Fiscal Management and Accountability Act 2003 makes provision for the creation of extra-budgetary funds but any such fund has to be created by an Act of Parliament. I am unaware that Parliament has sanctioned the establishment of any fund (extra-budgetary or otherwise) under the operations of NICIL.
The same can be said of the Lotto funds of which I am also on public record disagreeing with the unsolicited opinion of the then Attorney General to the Acting Auditor General. I can only interpret the former’s action as one designed to prevent the Auditor General from further reporting on the retention of the Lotto funds and its unauthorised use. Since the Auditor General has not requested such an opinion, he may choose to disregard it. Alternatively, he can seek an independent opinion, and should that opinion support the views of the Attorney General, it would be appropriate for the Auditor General to seek a judicial review of the matter. I should mention that the Attorney General is part of the Executive, and in the event of any disagreement by the Audit Office with the Executive, the Attorney General is likely to be placed in a difficult position to pronounce in favour of the Audit Office. Arguably, any attempt by the Attorney General to pronounce on any disagreement with the Executive could be interpreted as a conflict of interest.
The issue of other state-owned entities retaining revenues that are considered public funds should also be addressed. If such entities are collecting agencies on behalf of the State, then the moneys collected net of related expenses should be paid over promptly to the Consolidated Fund. An example is the Guyana Revenue Authority which pays over gross to the Consolidated Fund its takings for each day but has a separate budget to meet its expenses. In the case of the Geology and Mines Commission and the Guyana Forestry Commission, these entities do retain moneys collected by virtue of their respective Acts of Parilament that creted them. However, mechanisms should be put in place for periodic transfers to the Consolidated Fund of the accumulated surpluses or part thereof. After all, they are state-owned entities, and to the extent that they record accumulated losses, there is recourse to the Consolidated Fund to bail them out. It follows therefore that accumulated surpluses should find their way to the Consolidated Fund.