Minister of Finance Camillo Gonsalves has defended his government’s spending of some EC$123 million via special warrants since 2014.
Special warrants are used to finance expenditures that are unforeseen, foreseen and not provided for or not sufficiently provided for and required for the public good in circumstances such that the expenditure cannot, in the opinion of the minister, be postponed without injury to the public good.
Gonsalves told Parliament on Thursday that in each case, the special warrant was used responsibly.
“The estimates collectively show a pattern of expenditure that is understandable and responsible in every respect,” he told lawmakers, referring to the bills through which the warrant went on to receive parliamentary approval.
The finance minister gave an insight into the use of the special warrants, some of which predated his arrival in that portfolio in November 2017.
For instance, the Ministry of Legal Affairs used a special warrant to raise EC$850,000 to meet payments associated with court orders.
This type of payment to attorneys or litigants constituted a significant part of the special warrants issued, as government cannot anticipate litigation or judgement, Gonsalves said.
He said that in some instances, special warrants were used to compensate persons who were injured on or by government property, adding that this was a significant number in terms of the number of warrants and the sum.
About 28 such special warrants were issued including for someone to whom the government gave EC$5,000 in compensation after a sign fell on them. Another person was compensated after falling into a drain and injuring a leg.
Litigation money totalled EC$3.5 million in special warrants, Gonsalves said.
In some instances, the government used special warrants to make payments related to arrowroot farmers.
The largest category of the special warrants, however, the minister said, was bringing to account and journalising expenditure.
While it is a lot of numbers, when one looks at them, a story is told about the special warrants issues and the money that is spent, Gonsalves told Parliament.
In 2014, the government issued an EC$1.3 million special warrant for emergency recovery from Hurricane Tomas, which impacted St. Vincent and the Grenadines in October 2010.
An EC$1.32 million special warrant was also issued that year in relation to that same cyclone.
That year, the government also issued an EC$1.75 million special warrant for addition to the amount appropriated in the budget, for the purchase of pharmaceuticals and medical supplies.
EC$6.4 million was also spent via special warrant for the writing off of delinquent student loans at the Bank of St. Vincent and the Grenadines.
The Minister of Finance signs as guarantor of those loans, so that if the recipient does not repay the amount, the government does.
The government also issued special warrants as acts of solidarity with other countries in the region affected by natural disasters.
This includes EC$167,000 in two special warrants for Dominica in 2015 and EC$136,000 for Ecuador, when it was struck by an earthquake in 2016.
Gonsalves noted that Ecuador built multiple bridges for SVG in the aftermath of the 2013 Christmas storm
Tortola got EC$136,000 in 2017 and Dominica got the same amount, while Trinidad got EC$108,000 when they had some flooding.
In all, the special warrants related to disasters amounted to EC$4.1 million, the finance minister said.
Special warrants were also widely used to bring funds to account, with 31 such special warrants, totalling EC$31.8 million, being issued.
In the health sector, special warrants were used for vector control consequent upon the outbreak of chikungunya and zika.
In 2014, the Vector Control Unit, received an additional EC$52,000, EC$538,000 in 2017 and EC$791,000 in 2018.
Special warrants were also used for the purchase of medication from OECS Pharmaceutical Procurement Service.
In 2017, an EC$2.5 million special warrant was issued to buy additional drugs and medical supplies and in 2018, the figure was EC$3.68.
In 2018, EC$157,000 was used to buy Heberprot-P medication developed in Cuba for diabetic ulcer.
In 2014, the government used an EC$152,000 special warrant to pay for lab tests done on its behalf at private laboratories and EC$ 297,000 was spent on the Modern Medical Complex
“These health care exigencies required about 13 million worth of special warrants over the life of these estimates,” Gonsalves said.
“But all of them, when you look at them, are important and urgent for the public good and the minister of health made a convincing presentation to the ministry of finance and to the cabinet to convince us that these expenditures were necessary at the time.”
The arrowroot industry has, quite frequently, required special warrants to ensure that farmers are paid for their work and crops through the Arrowroot Association.
Special warrants in the agricultural sector amounted to EC$ 2.2 million.
EC$1.4 was used to repair or replace equipment, including cars, and an EC$300,000 loan to the owner of a fast ferry that services the Grenadines when its engine needed to be replaced.
In 2014 and 2015, there was a great deal of settlement of arrears at VINLEC, Gonsalves said.
“And I don’t have the whole history; I am just going on what was in the account there. Clearly, VINLEC was owed a lot of money in 2014 and 2015 by the state and it seems that at the time, people, certain professionals were allocating the utilities money to other purposes within the ministry, transferring things from one vote to another or just not paying the bill at all. And they mounted.”
In 2014, there were six payments to VINLEC and a few to LIME and in 2015, one was for Bethel High School for EC$162,000.
“I don’t know what happened there for that school’s electricity bill to get that high.”
Paying VINLEC and LIME resulted in EC$2.7 million in special warrants.
The government spent EC$15 million for road repairs and a special warrant was issued when the government gave a 2.5% salary increase in 2015.
“The list, when scrutinised, shows that the expenditures in these special warrants were required, were necessary, were urgent within the contemplation of not only the Constitution but the Finance Administration act and when you look at them together, you can say, with some justification that they are late. No argument there, but you can’t say that the expenditures are unreasonable…” Gonsalves told lawmakers.
CORRECTION: An earlier version of this story quoted as EC$115 million the total value of the special warrants issued between 2014 and 2018. The correct figure is $123,053,677.
According to the summary that Minister of Finance Camillo Gonsalves presented to lawmakers, in 2014, the amount was EC$19,061,041; in 2015, it was EC$16,827,908, in 2016, the amount was EC$22,703,177, in 2017, the total was EC$24,994,071; and in 2018, it was EC$23,954,094, for a total of EC$115,954,572.
However, Leader of the Opposition Godwin Friday told iWitness News that part of the supplementary estimates package excluded $7,099,105, which was the amount of the second supplementary estimates for 2014.
The opposition leader noted that this takes the total to EC$123,053,677.
“Because the maximum was $25 million to be spent by special warrants in a year, when the government exceeded the limit, it divided the total amount and present two supplementary estimates with each being under the $25m limit! Attempt to confuse others and conceal the breach!?” Friday said.