Spending by government tests the limits of the Constitution

Even as Chief Justice (ag.) Ian Chang considers one major case alleging unauthorised public expenditure of over $4.6 billion between January and early June 2014 involving one article of the Constitution, another case is probably in the making over spending of further billions in violation of another article of the Constitution.

In the current action Leader of the Opposition Mr. David Granger seeks an order to halt unauthorised spending by the government and also for spending on programmes disapproved by the National Assembly to be stopped. The question has been raised why the action was not brought immediately when it became known in June last year that the Minister of Finance had authorised the spending of moneys expressly disapproved by the National Assembly. It is obvious that several billions more would have been spent since June 14 in similar circumstances.

The Attorney General Anil Nandlall, in defending the unauthorised spending by the Government has sought refuge in procedural points, and according to a press report claims that “the court cannot issue an order to stop all government spending not approved by the National Assembly as requested by APNU leader David Granger as there is no allegation that anyone’s fundamental rights have been breached.”

One man court
The action is being contested in the one-man Constitutional/Administrative Law Division of the High Court headed by Mr. Chang whose long period of acting as Chief Justice would itself make for a good test case of yet another article of the Constitution. Mr. Chang’s decision in the 2012 Budget cuts case has raised eyebrows among many sections of the public, not least for his strict, textual approach to judicial interpretation of the Constitution. Aggravating the situation is the fact that an appeal against that decision has been languishing in the Court of Appeal for more than one year casting a cloud of uncertainty and ambiguity over the whole administration of public financial management.

If there was a competent, independent and professionally qualified Auditor General the lack of urgency and questions about our courts would still not be acceptable. But to have the top level of the country’s judicial system displaying such tardiness in a matter of considerable constitutional, financial and economic significance makes one wonder whether our higher courts appreciate their role and responsibility for the mess in which we find ourselves. And to top it all the country is now operating with a suspended National Assembly which means that there is absolutely no parliamentary oversight of public spending which at the best of times is characterised by improper accounting, constitutional violations and corrupt practices.

Hopefully, the case dealing with 2014 spending will be settled soon, if only to lay down markers for future conduct and for its relevance to spending in the four months January to April 2015.

2015 spending
In Guyana the financial year is the calendar year but for some unexplained reason the Constitution allows the Minister of Finance up to the end of March to present the budget for the current year and allows another month for debate and approval in whatever form. To facilitate expenditure for these four months article 219 (1) of the Constitution grants the Parliament the power to make provision for the Minister of Finance to authorise the withdrawal of moneys from the Consolidated Fund to “meet expenditure necessary to carry on the services of the government of Guyana” (emphasis added) until the expiration of four months from the beginning of that financial year or the coming into operation of the Act, which ever is the earlier.

Parliament in 2003 passed the Fiscal Management and Accountability Act (FMAA) which sets out in some more details the authority for expenditure during the four-month period. That Act gives the Minister the power to issue month-to-month drawing rights “sufficient to fund the ongoing delivery of normal services of Government (emphasis added) in accordance with Article 219(1) of the Constitution.”

The amount however is restricted for each month in respect of each budget agency “to one-twelfth of the amount that was expended by that budget agency in the immediately preceding fiscal year…” A further restriction imposed by the FMAA is that the Minister cannot issue a drawing right in relation to a subject matter or for a purpose for which there was no appropriation in the immediately preceding fiscal year.

Ramotar’s indifference
In other words, there are several, serious restrictions on spending by the Minister during the next four months – regardless whether or not the National Assembly is re-convened, which is unlikely, or whether it is dissolved, which is more likely. President Ramotar’s indifference to serious matters makes him unpredictable but what is certain is that the prorogation proclamation of November 10, 2014 expires on February 10, 2015, i.e. six months since the end of the preceding session of the Parliament on August 10, 2014.

If the Constitution and the FMAA were to be respected and applied, the government can legitimately spend on salaries and wages, repairs and maintenance, pensions and utilities and other recurrent expenditure on existing programmes and projects but not to commence any new projects, incur and new capital expenditure, grant any subsidies or make any payments not related to the ongoing delivery of normal services of Government.

There are several developments that suggest that this is not an abstract question but a real, practical one. Offering evidence of a complete disregard for the Constitution and the FMAA, Cabinet Secretary Dr. Roger Luncheon announced that Cabinet has approved contracts valued at some $876 million even as President Ramotar was in India agreeing to significant borrowings from that country for expenditure in Guyana.

Connecting 2014 and 2015
There is considerable relevance between the current case and 2015. If the court’s decision is that the Minister of Finance exceeded his spending authority then it is reasonable to assume that such spending cannot be taken into account in calculating the one-twelfth of the preceding year expenditure. It would be stretching it indeed for any court in one breath to rule a spending as unauthorised and improper in one period and yet valid for the purpose of qualifying expenditure for another. Cynics might say that stranger things have happened but let us wait and see how the current case goes before allowing our cynicism to take hold.

The instinct of the PPP/C particularly since Bharrat Jagdeo became President has been to spend and spend and damn the Constitution. With the cavalier and opportunistic Nandlall as Attorney General and his strange notions of constitutionality that instinct has become a practice. With a poodle for Auditor General, no Public Accounts Committee and no National Assembly the temptation increases. With elections looming and electoral defeat more than a possibility that temptation will become irresistible.

Mr. Granger who brought the action now being argued in the court no doubt recognises the dangers of unrestrained public spending at this time. Unauthorised spending in 2014 carries over into 2015. The parliamentary opposition with its array of lawyers now freed of parliamentary duties ought to treat this matter as much as of national importance as of their electoral self-interest. Time is of the essence and urgent action is necessary.

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