Chief Sec complains about state of THA finances

The Tobago House of Assembly (THA) has limited funds left to fund its expenses until the end of the financial quarter.

This was the assessment of the finances of the THA by its Chief Secretary and Secretary of Finance, Trade and the Economy Farley Augustine on Wednesday.

Augustine was speaking to the media at his first virtual post-Executive Council briefing.

He said the assembly received it disbursement from central government for the first quarter of fiscal 2022 (October - December) in the sum of $558,750,000, but the last subvention was received only a few days ago.

“We are almost through it all – in terms of spending it all.”

He said he would be impressing upon Minister of Finance Colm Imbert that he and the ministry need to “follow the law” regarding the issuance of money to the THA.

“When you look at the law, the law requires that these funds be disbursed quarterly. At the moment, the funds are disbursed irregularly and they are disbursed, most often, on a monthly basis. That’s a difficult way to do business.”

He said the result of that is that the THA has had, over time, to use an overdraft facility with the bank in order to meet any shortfall while awaiting disbursements.

“It also means that we cannot plan sufficiently if it is we cannot regulate how and when we receive those disbursements.

“That overdraft facility is costing us quite a tidy sum and, of course, that adds to our recurrent expenditure. On top of which, the overdraft facility is not catered for in the budgetary allocation from the Minister of Finance, so we have been trying the use this facility prudently. However, the reality is that we cannot, we cannot, we cannot do good business with getting our funds in an irregular manner.”

Augustine said Tobago was expected to receive $300 million in bond financing from the Finance Ministry, however only $163 million was received in May.

“Guess what, in less than six months every single cent of the $163 million was spent – all of it.

“I have since requested a list of all the projects that this money was spent on and all the people who benefitted from this $163 million. But all was spent, and we don’t have forthcoming, just yet, a priority list upon which this $163 million was spent.”

He said in order to get the rest of the bond financing, the assembly will have to go back and appeal to the Minister of Finance “and appeal to him to allow us to borrow the rest of the bond financing.

“Additionally, we have to negotiate some more with the bank to get the additional sums. We also have to look at debt management because it’s not free money. It’s money that we have to pay for and pay at an interest and so, naturally, our recurrent expenditure is increasing.

“We have used out all of the $163 million. It is difficult to pinpoint the kind of priorities this $163 million was spent on, but in less than six months we used up all of the $163 million bond financing simply because we were in an election year.”

He said former chief secretary Ancil Dennis, in July, promised that that he would govern Tobago with restraint owing to the unprecedented circumstances after the six-six result in the January 25 THA election.

“Then he said that he had instructed his executive council to be conservative until fresh elections are called and a clear mandate is given.”

But Augustine said, he was still looking for prudent restraint.

“We were promised prudent restraint in how we spend. We were promised that given that we were drawn at six-six in the last THA elections, and we had no house, no public accounts committee, no way of scrutinising the expenditure of the THA that there would be prudent restraint. The complete opposite happened.”

In terms of unspent balances, he sad that figure now stands at $50,506,501.

“That is not a lot. In fact, I have on my desk now a request from (the Division of) Health for over $100 million. And when I look at what is happening at the hospital with my administrator this morning and I said ‘We have to fix this, we have to find a way to remedy what’s happening with our parallel healthcare system,’ she said we have to find the money. $50.5 million cannot begin to treat with matters like that.”

Regarding CEPEP and URP, he said there is not even enough to pay salaries.

“You may remember that the budgetary allocation for URP came in at $18 million from the national budget that was read in October. That is woefully insufficient to pay all of our CEPEP and URP workers, and so this $50.5 million has to be reserved for paying their salaries – and guess what, that is not enough to pay their salaries for the rest of the fiscal year 2022.

“And guess what – we have already received all of the $18 million budgeted for URP for fiscal 2022. Why am I saying this? Is so that you understand where we are at financially.”

He, however, gave some assurance to workers.

“Yes, I am guaranteeing you today – if you are in CEPEP or URP – I am guaranteeing you that we will find the money and we will pay you and we will keep you on the payroll. I believe strongly that those who are most vulnerable must be protected the most. So you would enjoy a level of protection from us.”

Augustine said unspent balances usually provide a buffer for development spending, but the assembly does not have that luxury.

Speaking about the THA’s contingency fund, he said when money is disbursed from central government, it goes through the fund account before being allocated to divisions. That fund now stands at $392,543.88.

“That is almost zero.

“Now, in the past, what had happened is that we had a healthy contingency fund balance that we would always bring forward from year to year, from fiscal year to fiscal year, quarter to quarter.

“We cannot even afford an emergency in Tobago. That’s the reality. And, to be honest, I feel as though people were deliberately, fiscally irresponsible simply because people felt that they needed to spend what needed to be spent to get an advantage in an election.”

He said he has asked his team to identify five of the most important projects to focus on.

Contacted for comment, Dennis said: “We got more than we did last year, then how could there be a financial crisis in the THA? That is all I would say for now. At some point we would respond.”