No fetters on constitutional agencies in spending resources –judge rules
-case brought against AG by Mahipaul, others thrown out -concern however raised over aspect of 2021 amendment to FMA Act
In accordance with Article 218 (1) of the Constitution, the Minister of Finance or with responsibility therefor is authorized to lay before the National Assembly estimates of the revenues and expenditures of Guyana for the ensuing financial year for approval.
Against this background, High Court Judge Nareshwar Harnanan has declared that there are no fetters placed on the constitutional agencies spending their resources, other than to conform with the statutory procedures for accountability.
In a ruling delivered yesterday, Justice Harnanan noted that the entities listed in third schedule are authorized by Article 222(a)(b) of the Constitution to manage their respective subventions in such manner as they deem fit to carry out their respective mandates.
He then went on to note that Amendments to the Fiscal Management and Accountability (Amendment) Act 2021 FMAA do not violate the Constitution, nor the independence of the Constitutional bodies.
It had been the contention of APNU+AFC Member of Parliament (MP) Ganesh Mahipaul that the agencies were not being allowed to function independently, impartially and free of the exercise of any control by the Executive or any other entity.
He had said that there were infringements of the doctrine of the Separation of Powers (SoP).
Mahipaul had brought an action against the Attorney General, Minister with responsibility for Finance, Dr. Ashni Singh, the Judicial Service Commission (JSC) and other constitutional agencies; seeking a declaration to that effect.
In his ruling, however, Justice Harnanan noted that the control of the “purse strings of the country” is one function of the
Executive; and that it was usual that the President would assign that responsibility to a Minister of Finance or a Minister who has responsibility for that portfolio.
Sections 7 and 8 of the FMAA he said, sets out the statutory matrix in this regard.
In relation to the SoP
doctrine, the judge said that it is undisputed that the Executive bears responsibility for the general control and direction of the State.
The judge said that when Articles 217 and 218 are considered it is clear that in relation to public financing, expenditure is divided between those which are direct charges and those for which approval is needed by way of an Appropriation Act.
On this point he said he was of the view that by providing two separate regimes with respect to public expenditures, it was clear that the drafters of the Constitution envisioned two different methods would be employed, and the expenditures of the entities in its third schedule— being a direct charge on the Consolidated Fund must not be included as an appropriation under Article 218.
The judge went on to say that the clear and unambiguous language of Article 218 (1) establishes that the preparation and presentation of the financial estimates of revenue and expenditure for that year is an Executive responsibility under the SoP doctrine.
Justice Harnanan reasoned that the conduit now by which the Constitutional Agencies’ budget proposals ought to make their way to the National Assembly as part of the process for the determination of Guyana’s National budget must be through the Minister with responsibility for Finance and the expenditures of the constitutional agencies are only disbursable thereafter further to 222(a) of the Constitution.
The judge said that to this end, this Court does not consider Sections 1 to 6 of the FMAA (Amendment) Act 2021 to be in violation of the Constitution—to the extent, however, that there is a requirement for any approvals by sector ministers before transmission to the Minister assigned with the responsibility for Finance in order to become part of the process for the determination of Guyana’s National Budget— he said that any such approvals will be in violation of the Constitution.
The judge pointed out, however, that the 2021 Amendment went further in an attempt which he said could only be described as prescribing the manner in which withdrawals may be made from the Consolidated Fund by inserting the Constitutional Agencies into the schedules of the FMAA making them budget agencies and subject to the overall control exercisable by the Executive of its own entities or agencies.
“This Court views this with some concern…,” Justice Harnanan said, while adding, “it subjugates the Constitutional entities to the Executive controls-statutory and otherwise.”
Justice Harnanan said that he was further of the view that Article 222(a) removed the Ministry of Finance and the Executive generally, from all decisions regarding the spending by the constitutional entities by an approved budget.
Against this background he said “the entities are assured financial autonomy with respect to their spending.”
He said too, that by declaring such spending to be by way of direct charge on the Consolidated Fund, the Article removes the necessity for compliance with the ordinary legislative scheme and other requirements with respect to Government spending.
Mahipaul had wanted the Court to declare that the inclusion of the constitutional agencies as budget agencies in the Schedule to and under the FMAA, was inconsistent with the independence assured to those constitutional agencies.
Last month, the Full Court affirmed a previous ruling of Justice Harnanan that Dr. Ashni Singh could have freely disbursed funds to constitutional agencies, in keeping with estimates in the Appropriation Act 2021 (Act 5 of 2021).
Mahipaul had wanted the entire FMAA to be declared void.
Mahipaul had argued among other things that the power and exercise of budgetary and fiscal control over budget agencies under the Act by government ministers in general, and the finance minister in particular—all being members of the Executive, is inconsistent with and contrary to the Constitution.
Such powers he contended reside exclusively in the Legislature/the National Assembly.
Attorney General Anil Nandlall SC had contended that the Appropriation Act was issued by virtue of the authority of Article 218, upon the approval of the National Assembly of the Estimates and Expenditures; and it therefore constitutionally compelled the minister to disburse.
Mahipaul contended that with the passage of the Fiscal Management and Accountability Amendment Bill of 2021 repealing Section 80B (1) to (4) of the FMAA which was amended by the Fiscal Management and Accountability (Amendment) Act of 2015 to now include the constitutional agencies they are once again relegated to mere budget agencies which are “subject to the whims and fancies of the Executive.”
Apart from Mahipaul the other applicants in the action were Coretta Mc Donald, General Secretary of the Guyana Teachers’ Union; Dawn Gardener, First Vice President of the Guyana Public Service Union; Michael Sommersaul, Chairman of the Public Service Commission; Clinton Conway, Member of the Police Service Commission, the Police Service Commission and Allan Munroe, Chairman of the Teaching Service Commission.