The government has agreed to have an independent review of the discretionary powers of the government agencies and to reduce any abuse of such powers revealed by the evaluation.
The government undertaking is in response to the findings of the World Bank Country Financial Account-ability Assessment (CFAA), which found that political leaders exercised considerable discretion in running their agencies. The report also highlighted a perception that it was difficult to do business in Guyana as it related to the paying of taxes, clearing of goods through customs, buying public land, obtaining and renewing licences and public procurement.
“In these areas, the systems and processes in place are not perceived to be functioning transparently and the government is seen not to be predictable or equitable in following its own rules,” the CFAA.
The report said the exercise of discretion by political leaders was because of the absence of integrated systems, respect for operating rules, a functioning public oversight mechanism and a recognised medium for enforcement.
Dr Roger Luncheon, Head of the Presidential Secretariat, in response to these findings by the World Bank staff as part preparation of the Poverty Reduction Support Credit (PRSC) (granted), committed to remedial action in four major areas to impact on public sector financial management.
The CFAA undercores that for there to be any substantive improvement in public sector financial management, the government has to make a commitment to curtail the discretionary powers of public officials; improve oversight of public financial management; have full disclosure of public officials’ personal assets; and effect independence of the Auditor General’s office.
Luncheon made such a commitment in May of 2002 and a substantive reform programme has to be developed in the coming months in each of the four areas.
In a letter to Orsalia Kalantzopoulous, Country Director of the World Bank, Luncheon committed to have an independent review of the discretionary power which existed in the Inland Revenue Department, the Customs and Trade Administration, the National Frequency Management Unit, the Guyana Geology and Mines Commission, the Guyana Energy Agency and the Privatisation Unit.
Luncheon acknowledged that in the case of Customs and the IRD, it was necessary to have transparent processes to decide on waivers and remissions and to adjudicate disputes. In the other agencies, he said, it was necessary that governance and policy oversight systems be made to work. He said having Boards of Directors meet regularly to review and endorse operating decisions and review audit reports would curtail any abuse of the use of discretion.
“In advance of the second phase of the PRSC and on the basis of the independent evaluation, the government will adopt a programme to reduce any abuse of discretionary powers,” Luncheon said.
To achieve this, the government has asked the Bank to finance the comprehensive review of the system and processes in use of the listed agencies.
On the need to improve oversight of public financial management, Luncheon said the government agreed to empower the Parliamentary Sectoral Committee on Economic Services (PSCES) to oversee the public sector’s financial management practices.
In this context, he said that the government would sustain the efforts of the committee’s secretariat to develop the capacity needed to conduct the technical and analytical functions in support of PSCES’s oversight responsibility.
He said the principal objective of PSCES’s oversight function would be to have a consultative medium for discussing and resolving budgetary, accountability and governance issues related to financial management. The secretariat would also assist the committee with the administration of the oversight function and implementation of the processes related to that function.
Luncheon highlighted the general principles to be followed in establishing the oversight function which include establishing transparent and equitable rules and regulations to govern PSCES’s procedures; ensuring the participation of the private sector and civil society in PSCES proceedings; ensuring public disclosure of all proceedings; ensuring that funding for the oversight function is adequate to enable a high standard of professional activity and provide funding for the effective operation of PSCES.
The World Bank is to provide a Technical Assistance Credit to support the four areas of reform and Luncheon has sought to have the Bank commit to technical assistance to enable the Economic Services Committee and its secretariat to perform the public oversight function effectively, including the establishment of rules and regulations governing its operations.
On the issue of disclosure of public officers’ personal assets, Luncheon said that the government was committed to strengthening the Integrity Commission which had been hamstrung by a small staff and extremely modest budget and lacked the capacity to analyse the disclosure statements currently filed.
“The government is committed to strengthening its system of public disclosure, monitoring and enforcement of non-filers and false-filers. The government agrees to the principle that the personal assets of public officials should be disclosed publicly and will seek to arrive at a consensus with the political opposition and other parties to make that happen,” Luncheon told Kalantzopoulous.
He said the government would supplement the Integrity Commission’s capacity by having the Office of the Auditor General provide technical, analytical and enforcement support. He said prior to the second PRSC, the government would define the rules and procedures it would follow to analyse, verify and disseminate the findings of the disclosure process.
The disclosure policy, Luncheon said, would seek to cover all incumbents in and nominees for high office and their immediate family; institute once a year filing disclosing all cash and non-cash assets and liabilities; tax returns should be filed with disclosure forms; filings should be made available to the public after arriving at consensus with the political opposition and other parties; the Integrity Commission should continue to publish at least once a year the officials subject to this disclosure who have complied, and the filings should be required for a period after an official leaves public service.
Luncheon asked the Bank for a provision in the technical assistance credit to fund the development of technical capacity within the Commission, its staff and the Office of the Auditor General.
As to the Auditor General Office independence, Luncheon had set a deadline of December 2002 to operationalise the new audit law; new manual of procedures and new organisational establishment as well as the reorganisation plan for that office.
Amendments to the constitution had secured the independence of the auditor general’s office with it reporting to the Public Accounts Committee of Parliament and not the government. However, there was need to put in place new rules and regulations for its operation.
Luncheon said Inter-American Development Bank financed consultants last year drafted the new law and manual of procedures setting out the new OAG’s establishment. He said the government had agreed for that department to be corporatised, following the Revenue Authority model and its salary scale adjusted using the Revenue Authority scale.