[This is the fourth of five parts of a speech delivered at the Continuing Legal Education Seminar of the OECS Bar Council Meeting arranged by the Anguilla Bar Association at La Vue Hotel on 2 December 2016]
Part 4
We are considering what alterations need to be made to our constitutional system if we the people are to have confidence in our governmental arrangements. In the last few weeks, we looked at the elements of “integrity”, “transparency”, and “accountability” which are essential for good governance. We continue now with a related fourth element, the handling of public finances.
Public Finances: It is generally accepted in Anguilla that public finances need to be more thoroughly regulated, and the existing rules more stringently enforced. The deliberate ignoring of the provisions of the Financial Administration and Audit Act over the past 40 years has resulted in the Chief Auditor repeatedly criticising Anguilla’s public accounts. We have, it appears, never received a clean audit report. No member of the public has ever had the means of ensuring that the statutory rules governing the raising of revenue and the spending of public funds are strictly followed by the Administration. That will all change under the new constitutional provisions.
Fiscal Framework: The Government will now be required to formulate a Fiscal Framework setting limits to public debt relative to public revenue, limiting debt service costs, and setting levels of reserves. Every 6 months, the Minister must report to the Assembly on the state of performance of the public finances and the economy of Anguilla. Where an Appropriation Act will not return a surplus budget, the Minister must lay before the Assembly a statement explaining the reasons.
Where the Government is in breach of the Fiscal Framework, any Appropriation Act must be approved by a Secretary of State and Government must agree a Medium Term Fiscal Plan with milestones for meeting key debt ratios. These procedures, requiring the agreement of the Secretary of State, are applicable only in a British Overseas Territory (BOT). In the case of an independent country analogous terms and conditions are contained in a Borrowing Agreement with the International Monetary Fund. The conditions imposed by the IMF on the borrowing state are, typically, even more onerous than those demanded by a Secretary of State in the case of a BOT.
Waiving a Tax: No tax, rate or levy may be imposed save under the authority of an Act, and where an Act authorises a person to waive or vary a tax, that person must report to the Assembly every 6 months. Any waiver of an amount in excess of $1,000 will require the approval of the Assembly. In Anguilla, the Chief Auditor reports that taxes imposed by law are on occasion waived or varied by decision of the Executive Council, or on occasion even by the Permanent Secretary, without any report to, or approval by, the Assembly. In future, any such breach of the financial rules will be not just illegal but unconstitutional, and for the first time capable of enforcement by constitutional action.
Actuarial Assessment: All contingent liabilities of Government are to be subjected to an independent actuarial assessment every 2 years, and a report made to the Assembly and published within 2 months.
Appropriations: All Government revenues must be paid into the Consolidated Fund, unless an Act authorises otherwise. Money may be withdrawn from the Fund only to meet expenditure charged on it by a law, or where authorised by an Appropriation Act. In Anguilla, at the present time, as evidenced by the Chief Auditor’s published Reports, it is common practice for the Minister, or his Permanent Secretary without any written instruction from his Minister, to divert public funds from approved headings to projects that have not been approved by the Assembly. Such diversion will in future be not merely illegal but unconstitutional.
Supplementary Appropriations: There is obliged to be an Appropriations Bill every year. If the funds appropriated are insufficient, there shall be a supplementary estimate and a Supplementary Appropriation Bill laid by the Minister before the Assembly. This, of course, is a standard rule for management of public funds. But, it has been many years since any Supplementary Appropriation Bill has been prepared, far less submitted to the Assembly, in Anguilla. It will be provided that the Governor may refuse to assent to an Appropriation Bill, even if passed by the Assembly, if it is inconsistent with the Fiscal Framework.
Annual Report by Minister of Finance: It will now be a constitutional duty for the Minister of Finance, at least 6 weeks before the new financial year, to present to the Assembly the estimates of revenue and expenditure. He must also set out targets for revenue and expenditure, and an assessment of performance against debt sustainability limits as established in the Fiscal Framework.
Borrowing: All borrowing must be authorised by an Act, and be in accordance with the Fiscal Framework. The Minister will be required to report to the Assembly every 6 months as to the country’s total indebtedness; on the servicing of any loan; and on the utilization and performance of the loan.
Funding Institutions of Good Governance: The administration can stifle an institution protecting good governance by depriving it of public funds and resources. The Anguilla proposal for funding these institutions is designed to make this difficult, if not impossible. A constitutional duty will be laid down for Government to provide accommodation and other resources reasonably required. The PSC will be mandated to approve the temporary transfer to any such institution of members of the public service reasonably requested by the institution.
By August 31 of each year every institution protecting good governance must submit its budget for approval by the Appropriations Committee and the Assembly. The Assembly will be prohibited from adjusting this budget. It must pass or reject the budget, but may not amend it. Once passed, the institution’s budget will become an integral part of the Appropriation Act for that year. If the budget is rejected, the Appropriations Committee must reconsider it, discuss it with the institution, and recommend a revised budget to the Assembly.
Remuneration of Members of the Assembly: In Anguilla, a frequent cause of complaint has been the ad hoc manner in which members of the Assembly approve increases in their salaries, allowances and pensions. The draft new constitution will provide that the Speaker’s and other Members’ remuneration must be prescribed by an Act. Any Bill for an Act for remunerating Members of the Assembly must be recommended by the Integrity Commission, and be published for public discussion before it is enacted.
Chief Auditor’s Report: Finally, on finance, the new constitution will provide that the Chief Auditor’s Report is to be published each year. Only two of these annual audit reports have ever in the history of Anguilla been published. The Chief Auditor will audit the accounts of all government departments, of the Assembly, and of all institutions of good governance. He will submit his Reports to the Governor and to the Speaker who will lay them before the Assembly. The Speaker is then required to publish any such Report within one month of receiving it.
[To be continued]
