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$100 MILLION ‘SLIPPAGE’ FinSec Admits Breach of Financial Regulations

$100 MILLION ‘SLIPPAGE’ FinSec Admits Breach of Financial Regulations
November 23
13:43 2019

$100 MILLION ‘SLIPPAGE’ FinSec Admits Breach of Financial Regulations

On Thursday, 21 November 2019 –
The case of John Briceño, Julius Espat and the PUP against Prime Minister Dean Barrow, Financial Secretary Joe Waight and the Attorney General over the spending and accountability of the Petrocaribe funds took centre stage before Chief Justice Kenneth Benjamin this week and while the government’s position has been that this is another case of much ado about nothing, Waight had a lot of questions to answer on the witness stand.

The PUP’s main points of contention are that the Finance and Audit Reform Act stipulates that any additional spending (outside of the Budget approved) from the public purse must receive approval from the House of Representatives before it is spent; and that there is full accountability of how the monies are spent.

In one glaring admission during questioning by PUP attorney, Senior Counsel Eamon Courtenay, Waight admitted that there was one instance when it “slipped” the Finance team at the Ministry, which did not make out a supplementary budget for $100 Million that was spent years ago and highlighted in the 2012/2013 Auditor-General’s Report.

“Once we caught up that, in fact, that year had not been addressed, we put a team together. The head of the team got sick…been out for some time; and we will finish it before the end of the year,” Waight assured. He hastened to clarify that “there is no mention that there is any misappropriation or impropriety with the use of the money.”

When he faced the media on Thursday, Waight explained that by his use of the word “slippage” it did not mean there was not due process – “indeed we have been late in submitting, but these Supplementary Appropriation Bills have been passed; money has been spent, so to then ask for a declaration go further to say that it’s void really meets no practical purpose,” in response to what the PUP is asking for.

In Court on Wednesday, Espat said that while he has made repeated requests for the details of how the monies were spent, adequate accountability has been hard to come by. He made reference to the occasion when his attempt to get those details at a House Sitting ended up with him being removed from the Sitting.

Waight, who bore the brunt of the hard line questioning, told the Court on Wednesday that for every shipment of fuel that came from Venezuela, a portion of between 40 and 60 percent was paid to the fuel company for the fuel and the government used the remainder as a concessionary loan. He said that for every shipment that arrived in Belize, that portion that was not paid to the supplier was deposited in the Central Bank’s Consolidated Revenue Fund. A huge portion of the monies were used to finance projects or to meet “urgent or unforeseen expenditures,” he explained. He said that he would be the one who would prepare the loan motions to borrow from the account.

There was disparity in Court between Waight’s perspective and the PUP, over whether the monies were public funds. Courtenay argued that because the monies were deposited in the Consolidated Revenue Fund and used from there, the monies should have been audited and any expenditure of those funds should have been approved by the National Assembly before it was spent and put before the Public Accounts Committee.

“It has to do with whether or not a government can take $1.3 Billion, spend it on how it wishes without any accountability to Parliament. The Financial Secretary was very clear in his answers. He said that the money that was spent, was spent because there was an urgent and unforeseen need. …I think anybody will know that you cannot spend $1.3 Billion as urgent and unforeseen,” Courtenay argued.

Under the Finance and Audit Reform Act, there is a certain limit which ought not to be exceeded, but Waight explained under oath that the infrequency with which the House met did not allow for this to happen. Hence he said that Special Warrants – which are similar documents used for the regular budgets – were utilized by the Ministry of Finance for the monies to be used. He added that the limits were exceeded on a regular basis.

Waight explained that the Finance Ministry’s staff is so small that late supplementaries are have been an ongoing occurrence by both governments. He agreed that there has been a breach in adhering to the law in preparing supplementary budgets in a timely fashion to be presented before the House. He said that the current Government is still doing supplementaries that it inherited from the previous one.

Belize has not been paying Venezuela because of the sanctions imposed by the US on that South American country; hence our liability remains live and the interests continue to accrue on the loan.

Representing the Government’s side in Court is Queen’s Counsel, Justin Simon.

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