May 02, 2015 News
Finance Minister misdirected management of consolidated fund – Greenidge responds
Minister of Finance, Dr Ashni Singh, may have been misdirected as it regards the nature and operations of the Consolidated Fund consequentially breaching the Constitution and the Fiscal Management and Accountability Act.
This view was expressed in an affidavit filed by Attorney-at-Law Roysdale Forde, who is representing former Finance Minister, Carl Greenidge, in the court action, which seeks to block Government from making any disbursement from the recently acquired US$32.16M Inter-American Development Bank Loan.
Given concerns over misuse of the sums, Greenidge, filed the action a few weeks ago in a bid to prevent the government from spending the monies.
Greenidge had requested that the proceeds from the loan agreement be paid into the Consolidated Fund and an order be granted blocking the government from making any withdrawal until the hearing and determination of the case. The temporary order was subsequently granted by Chief Justice Ian Chang.
But, Attorney General, Anil Nandlall, who is also named as a defendant in the case, had argued essentially that disbursements once paid into the Consolidated Fund, form part of a general indistinguishable pool of resources.
Nandlall had said that given Government ‘s view on the matter, any one month of funds are withdrawn and spent from the Consolidated Fund to meet the operations of Government, without any identification being made of the original source of those funds.
However, Greenidge’s attorney challenged this notion when the matter came up for hearing before the court, last Wednesday.
In an affidavit in response, the attorney noted while the Constitution speaks of a single Fund, that
Fund is made up of subparts including the Contingencies Fund, Extra-Budgetary Fund, drawn monies, money in several bank accounts and money in a Deposit Account.
The court document outlined that while Section 61 of the Fiscal Management and Accountability Act requires that the proceeds of the Loans be deposited into the Consolidated Fund, Section 3.02, applies to special conditions prior to all the disbursements of the Loan Agreement, between the Government of Guyana and the I.D.B.
According to the document, under the aforementioned circumstances, the disbursement of financing will be subject to conditions stipulated in Articles 4:01 and 4:03 of the general conditions for compliance by the borrower.
One such condition is that, the borrower maintains open the special bank account which the bank shall only initiate the disbursement of the resources after the borrower has complied, with its satisfaction.
The written response further outlined that Section 5.01, Records, Inspections and Reports of the SPECIAL CONDITIONS, stipulates that “resources of the Financing will be deposited in the special account or accounts exclusively designated for the Program.
“The Borrower agrees to maintain separate accounting records, and an adequate internal control system, in accordance with Article 6.01 of the General Conditions…The Borrower or the Executing Agency, as the case may be, shall maintain appropriate systems of internal accounting and administrative controls.
The accounting system shall be organized so as to provide the necessary documentation to permit the verification of transactions and facilitate the timely preparation of financial statements and reports.”
Given the fundamental misunderstanding of the provisions of the Loan Agreement, the document stated the applicant fears that the public purse would be irreparably harmed if the Conservatory Order and the Order sought in the Endorsement of Claim are not granted.
Owing to the submissions, the defendants have asked for time to respond. The matter will continue before the Chief Justice on May 8.
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