APNU+AFC’s changes to Fiscal Management and Accountability Act unconstitutional – High Court

Justice Nareshwar Harnanan, on Monday, declared that the amendments made by the People’s Progressive Party/Civic (PPP/C) Government to the Fiscal Management and Accountability Act (FMAA) in 2021 are not unconstitutional as was being argued by Opposition Members of Parliament Ganesh Mahipaul and Coretta McDonald, along with others.

The parliamentarians had contended that by the 2021 Amendments to the FMAA, the constitutional agencies were once again regulated to mere budget agencies subject to the whims and fancies of the Executive. They had argued that the amendments allow the Finance Minister and members of the National Assembly to limit the size of allocations as well as limit the items of the budgets and consequently affected the work of the agencies.

The Fiscal Management and Accountability (Amendment) Act of 2021 repealed Section 80B (1) to (4) of the Fiscal Management and Accountability Act, Chap. 73:02, which was amended by the Fiscal Management and Accountability (Amendment) Act of 2015, which was enacted under the previous A Partnership for National Unity/Alliance For Change (APNU/AFC) coalition Government.

The Judge said that the amendments made to the Act in 2015, though well-intended, removed a function of the Executive and placed it within the realm of the legislature by requiring constitutional agencies to submit their budget proposals to the Clerk of the National Assembly or the Auditor General through the Chair of the Public Accounts Committee (PAC) who were both charged with submitting it to the National Assembly.

Considering that the language of Article 218 (1) of the Constitution is “clear and unambiguous” and establishes that the preparation and presentation of the national budget is an executive responsibility under the doctrine of the separation of powers and the current statute, Justice Harnanan noted that the amendments made to the Act under the APNU/AFC permitted constitutional agencies to “intrude upon the functional responsibilities of the Executive”.

For this reason, the High Court Judge underscored that he was of the view that amendments made under the previous regime would have been violative of Article 218, as they abrogated the doctrine of separation of powers. According to him, the 2021 amendments in seeking to ameliorate the transgression into the realm of the Executive deleted subsection 1 to 4 of Section 80B.

The Judge said that the conduit now by which constitutional agencies’ budget proposals ought to make their way to the National Assembly as part of the process for the determination of the national budget must be through the Finance Minister, and the expenditure of the agencies are only disbursable thereafter pursuant to Article 222A.

To this end, the Judge found that Section 1 to 6 of the Fiscal Management and Accountability (Amendment) Act of 2021 were not in violation of Articles 122A, 212 (G), and 222A of the Constitution “to the extent, however, that there is a requirement for any approvals by sector ministers before transmission to the [Minister of Finance] in order to become part of the process for determination of Guyana’s national budget, any such approval will be violative of Articles 122A, 212 (G), and 222A of the Constitution and it is so declared.”

He noted that the 2021 amendments went further in an attempt “which this court can only describe” as prescribing the manner in which withdrawals can be made from the Consolidated Fund, by inserting the constitutional agencies into the schedule of the FMAA, making them budget agencies and subject to the overall control exercisable by the Executive of its own entities or agencies.

“The court views this with some concern,” Justice Harnanan said, adding that “this court cannot comment on the intent of this particular amendment, but the effects certainly subjugate the constitutional entities to the Executive controls, statutory and otherwise.” According to him, Article 222A removes the Finance Ministry and the Executive from all decisions regarding the spending by constitutional agencies of an approved budget. He noted that the entities are assured financial autonomy with respect to their spending.

The Judge was of the view that “by declaring such spending to be by way of direct charge from the Consolidated Fund, the amendment removes the necessity for compliance with the ordinary legislative scheme and other requirements with respect to Government spending, and it is so declared.”

He added, “therefore, to the extent that section 7 of the Fiscal Management and Accountability (Amendment) Act of 2021 inserts the constitutional agencies into the schedule of its principal Act, this would be violative of Article 218 and 222A which assures the independence of those entities by providing their expenditure to be (1) financed by a direct charge from the Consolidated Fund; (ii) excluded from becoming a portion of estimates for an Appropriation Act; (iii) their expenditure be managed in such manner as they deem fit for the discharge of their functions.”

Additionally, to the extent that the 2021 Budget was prepared, approved, and disbursed to the constitutional agencies pursuant to the mechanisms set out under the Fiscal Management and Accountability (Amendment) Act of 2021, the Judge ruled that the budgetary process of these agencies would have conflicted with Article 222A of the Constitution, and as such, made a declaration in this regard.

The Judge was keen to point out that in considering the factual matrix of the case, there was no evidence of an intrusion by the Executive into the realm of the constitutional agencies, in so far as any act or edict was deliberately designed or implemented by the Executive to intrude into the independence of the agencies.

He was of the view that there existed a lacuna between the Executive’s statutory and constitutional mandate to prepare and lay the budget before the National Assembly, and the process of determining the expenditure of the constitutional agencies, which are financed as a direct charge on the Consolidated Fund which has to be approved by the National Assembly through the budget process.

“The solution could not be to impose on the Clerk of the National Assembly and the Chair of the Public Accounts Committee an executive responsibility as happened in 2015 nor could it be the solution to assign the constitutional agencies to the schedule of the [FMAA] to become budget agencies which will have the consequential effect of subjecting them to executive control and impacting on their constitutionally-guaranteed independence…”

Finally, the Court made no coercive orders. No orders were made as to costs in light of the significant public interest nature of the matter.
The constitutional agencies are the Judicial Service Commission, the Public Service Commission, the Teaching Service Commission, the Public Service Appellate Tribunal, the Public Procurement Commission, the Guyana Elections Commission, the Office of the Ombudsman, the Ethnic Relations Commission, the Women and Gender Equality Commission, the Indigenous Peoples Commission, the Rights of the Child Commission, the Chambers of the Director of Public Prosecutions, the Office of the Auditor General, the Supreme Court of Judicature, and Parliament Office.

Attorney General Anil Nandlall, SC, a named respondent in the action, appeared in person. Senior Counsel Roysdale Forde appeared for Mahipaul and McDonald.