PIAC accuses the Ministry of Finance of lying about oil revenue spending

Company News of Friday, May 3, 2019

Source: Starrfm.com.gh

2019-05-03

The Public Interest and Liability Committee (PIAC) accused the Ministry of Finance of lying about spending on oil revenues in the country.

The ministry has programmed GHG 1.55 billion in 2018, which is 70% of net oil revenue. ), which according to the Ministry of Finance was held in the Treasury Single Account (TSA) and would be carried forward to 2018.

According to this calculation, the amount that should have been scheduled for spending in 2018 is expected to rise to 1.99 billion GH ¢, PIAC announced in a press release Friday.

The 1.55 billion GH ¢ that the ministry claims to be its ABFA expenditures programmed for 2018, in addition to accounting for 70% of net oil revenues, comply with section 18 (1) of the PRMA regarding the allocation of oil revenues.

This means that the programmed amount excludes the unpaid balance of 403 million GH ¢ (today, 440 million GH ¢ resulting from foreign exchange gains) from 2017.

The Department of Finance confirmed this during a meeting with PIAC held on April 18, during which he explained that, since the 2018 budget was submitted in September 2017 and that the Committee for the The Public Interest and Liability (PIAC) had approved the Parliament for 403 million GHAC expenditures incurred that year, this could not have been included in the 2018 budget for approval by Parliament.

The Ministry has once again confirmed that the unpaid balance of 440 million ¢ GH in 2017 was therefore not part of the approved spending for 2018 under the Appropriations Act for that year.

The ministry indicated that the unspent amount will have to be carried forward to the 2019 budget for approval by Parliament (under the 2019 Appropriations Act) before it can be spent.

"Yet, by detailing the planned spending for the 1.55 billion GH ¢, the ministry has included the balance of 440 million GH ¢ from 2017", observed the PIAC in its press release Friday, describing the explanations by the Ministry to PIAC and, by extension, the Ghanaian public is "unsatisfactory and misleading, in that it gives the impression that the unspent amount of 440 million GH ¢ in 2017 was duly taken into account. account".

Below the full version

Committee on the Public Interest and Liability (PIAC)

Press Release May 2, 2019 STATEMENT ON THE PUBLICATION OF AN ADDITIONAL EXPENDITURE ANALYSIS IN THE 2018 HALF-YEAR COMMITTEE REPORT

The Public Interest and Liability Committee (PIAC) has published a complementary badysis to its 2018 semi-annual report on oil revenue management on its website www.piacghana.org. This additional report became necessary as the data for the badysis was submitted three months after the date of legal publication and therefore could not be included in the background report.

As noted in the 2018 semi-annual report for publication, July 17, 2018, PIAC sent its initial request for data to the Minister of Finance regarding income and expense data. In response, the Ministry provided only the revenue data, leaving out the expenditure component. After several verbal reminders to the department, the Committee responded to a letter dated October 4, 2018 reminding the Minister that the delay in providing the requested data had resulted in PIAC's failure to meet the deadline for submission. the filing of its half-yearly report. deal with the matter with the utmost urgency. This reminder was also ignored.

Highlights of the conclusions and recommendations from the badysis of incremental expenditures in the 2018 semi-annual report are:

Main conclusions:

An amount of $ 1.55 billion was to be spent in 2018. This represented 70% of net oil revenues. As of 2017, there was an unused ABFA of 403.74 million GH ¢ (currently 440.84 million GH ¢ thanks to foreign exchange gains), which, according to the Ministry of Finance, was held in the single account. of the Treasury and would be carried forward to 2018. According to this calculation, the amount that should have been programmed for expenditure in 2018 should be 1.99 billion GH.

According to the ministry, the 1.55 billion GH represents ABFA expenditures programmed for 2018, represent 70% of net oil revenues and are in line with section 18 (1) of the PRMA with regard to the allocation of revenue oil.

This means that the programmed amount excludes the current balance in 2017 of 403 million GH ¢ (today, 440 million GH ¢ resulting from exchange gains). The ministry also confirmed this at a meeting with PIAC on April 18. The meeting explained that, since the 2018 budget had been presented in September 2017 and the expenditure approved by Parliament had been 403 million GH ¢, it could not have been included in the 2018 budget for approval.

The Ministry has once again confirmed that the unpaid balance of 440 million ¢ GH in 2017 was therefore not part of the approved spending for 2018 under the Appropriations Act for that year.

The ministry indicated that the unspent amount will have to be carried forward to the 2019 budget for approval by Parliament (under the 2019 Appropriations Act) before it can be spent.

However, by detailing the programmed expenses for the 1.55 billion GH ¢, the ministry included the balance of 440 million GH ¢ from 2017.

The Department's explanation to PIAC and, by extension, to the Ghanaian public is unsatisfactory and misleading, as it gives the impression that the unspent 440 million GH ¢ in 2017 has been taken into account.

With respect to the ABFA allocations, the department itself acknowledges that "the allowances were made in accordance with Article 21 (4) of the PRMA, which requires the allocation of 39, at most 30% of ABFA's income for goods and services, and at least 70% of ABFA's revenues will be used to finance capital expenditures. " This badertion resolves an ongoing dispute between PIAC and the department as to the interpretation of subsection 21 (4) of the PRMA.

PIAC notes that the scheduled ABFA complied with section 21 (4) of the PRMA – 30% of expenditures on goods and services and 70% of capital expenditures – despite the Department's disagreement with the Committee regarding the interpretation of the section.

The programmed financing for agriculture in 2018 has increased by 61.19% compared to 2017.

The rehabilitation project of the Kojokrom-Tarkwa railway has received important allocations. PIAC's visit to the projects confirmed the progress made. Anomabo Fisheries College, on the contrary, has witnessed the slow progress resulting from the release of derisory funds.

recommendations:

If, as the department claims, the unspent ABFA amount for 2017 will require Parliament's approval before it is spent, PIAC advises the department to remove the amount of its planned spending for 2018.

The Committee is committed to working with the Ministry to properly account for the unspent amount and the result will be made public in subsequent reports.

The Committee encourages the Department to ensure that its planned and actual expenditures remain in compliance with section 21 (4) of the PRMA, under which 70% of public investments and 30% of goods and services are required.

PIAC commends the government for its increased allocation to the priority area of ​​agriculture in 2018, particularly for the development of the infrastructure needed to support the sector. While we encourage this development, we also recommend paying attention to activities that support direct production.

The financing of ABFA projects must be maintained in sufficient quantities to enable its timely completion. This will help to avoid the huge cost overruns badociated with the delay in implementing many ABFA-funded projects, including road projects.

In the future, PIAC expects stakeholder institutions to submit their data on time to badist the Committee in meeting legislated timelines and to avoid the need for reporting. additional.

…………………………………… ..

Dr. Steve Manteaw

President of PIAC