Govt. barred from spending IDB loan until ruling made

Georgetown: Head of the Presidential Secretariat (HPS) and Cabinet Secretary, Dr Roger Luncheon has stated that the litigation proceeding filed by the Opposition party to block Government from spending the US$32.16 million loan that was recently granted by the Inter-American Development Bank (IDB) is unnecessary.

Speaking at last week’s post Cabinet briefing, Dr Luncheon outlined that even in the absence of a sitting Parliament, public expenditure management remains a controversial matter. He noted that this recent litigation by the Opposition following the policy-based loan for the environmental sector that was recently signed by the IDB Board of Directors and the Government of Guyana is wholly unnecessary.
The HPS explained that Cabinet is of the view that the litigation is aimed at conveying to the public, and at this time the electorate, more negativities about Government’s spending. He pointed out that Government is quite well aware that the proceeds from any policy-based loans are deposited in the Consolidated Fund and remain there until such time when there is an Appropriation Act in place for it to be disbursed.
“In essence, the move to litigation was, in Cabinet’s view, a smoke screen; just another opportunity to harp, to continue bringing to the public’s attention this issue of Minister, Dr Ashni Singh’s spending and issues surrounding public expenditure management and this litigation Cabinet contends is totally unnecessary,” he stated.
The Cabinet Secretary continued highlighting that in the absence of the Appropriation Act, all funds in the Consolidated Fund are unavailable with the exception of the 1/12 rule, which makes provisions for the expenditure to fund Government’s business in such a situation. He said that matters like vaccination and payment of salaries cannot be withheld as such the Constitution allows for such provisions. This is calculated by taking 1/12 of the aggregated Capital and Current Expenditures of a specific budget agency from the previous year.
Dr Luncheon went on to scrutinise the court challenge stating that it was an unnecessary foray into the court because the policy-based loan proceeds went straight into the Consolidated Fund and there is ample evidence to show that no withdrawals were made from the Consolidated Fund as no Appropriation Act was in place. He pointed out that the litigation is therefore challenging an event that did not take place (the withdrawal) and also a challenging an event that did take place (the deposition of the fund in the Consolidated Fund).
The HPS further stated that Cabinet believes the litigation was not intended for a court hearing but intended for the electorate public, and to keep before it, the spectre of Dr Singh and his “alleged unconstitutional spending of public funds”.
In February, two sets of loan agreements were signed, targeting Police and prison initiatives along with the environmental management sectors. Some US$15 million will be plugged into the Citizen Security Strengthening Project and the other US$17.16 million is to support the policy reforms in the sector.
The legal proceedings were filed by A Partnership for National Unity (APNU) shadow Finance Minister Carl Greenidge. On Wednesday last, the matter was called up again before Chief Justice Ian Chang, who handed down a temporary order barring Government from spending any of the US$32.16 million.
Greenidge is arguing in the legal proceedings that without Parliament in session, Government cannot legally spend any of the monies without the approval of the National Assembly.