Liberia: House of Reps Grants Executive’s Request to Spend US$47.5M from Unapproved Budget
Capitol Hill, Monrovia – The Plenary of the House of Representatives has passed a resolution authorizing the Executive to continue spending from the unapproved budget in order to avoid the government from shutting down.
Report by Gerald C. Koinyeneh, [email protected]
However, in order for the decison to take effect the resolution needs to be approved by the Liberian Senate.
The decision was reached by the House’s plenary through a majority vote on Tuesday, September 3, following the reading of a communication from the Minister of State for Presidential Affairs, Nathaniel F. McGill.
Mr. McGill, who currently serves as Acting Chairman of the Cabinet, in the letter addressed to House Speaker Dr. Bhofal Chambers stated that the amount of money available as temporary funding for government’s operation in the absence of an approved fiscal budget as required by the Public Financial Management Law has almost finished.
McGill: “And to avoid the shutdown of the government, the President has directed me to convey to the Honorable House of Representatives the need to pass a Resolution authorizing the Ministry of Finance and Development Planning to spend beyond the stipulated one-twelfth of last year’s budget for the month of August 2019, while awaiting approval of the draft 2019/2020 by the Legislature.”
Section 17 of the Public Financial Management (PFM) Act of 2009 states that in the case where the Legislature is unable to approve the national budget before the start of the fiscal year, the Minister of Finance is authorized to collect revenues and approve expenditures, in line with the proposed budget.
The law adds that the money should be up to one twelfth (1/12) of the previous fiscal year budget and provides that its expenditure shall be included in the subsequent financial outturn.
In the communication, Mr. McGill said he requests the Legislature’s prompt intervention because the US$47.5 million which amounts to one-twelfth of last year’s budget of US$570 million has almost been exhausted.
“The request is prompted by the fact that from the US$47,500,000 allotted under the PFM Law, US$45,633,310 has already been spent, leaving a balance of US$1,866,690 for the government operations, which is grossly inadequate for the month of August. The President urges the Honorable House of Representatives to treat this as a matter of urgency,” he appealed.
The House’s Response
Following the reading of the communication by the House’s Chief Clerk Mildred Sayon, plenary granted the Executive’s request through a majority vote in favor of a motion proffered by Rep. Clarence Massaquoi (Lofa County District #3).
Said Rep. Massaquoi: “Having substantively discuss the issue, I moved if I can obtain a second, and in the spirit of running the government, in the spirit of avoiding a shutdown of the government. And being cognizant that shutting down the government means civil servant will not be paid, shutting down the government means our kids will not go to school, shutting the government means the ministries of Public Works, Health and Gender will not run the day to day affairs of the government; and [our] being here under the sole purpose of serving the people, I move if I can be seconded, that this request sent to us by the Executive be granted and this plenary takes a decision to approve and authorize the usage of one-twelfth of the previous budget pending the passage of the current budget that we are discussing.”
The resolution will now be sent to the Liberian Senate for concurrence in order to become law.
Salary Harmonization Not Included
Meanwhile, the House of Representatives has called on the Executive to do the extra spending in line with the salary of Fiscal Year 2018/2019.
Since Rep. Massaquoi did not strictly order the Executive to stop the salary harmonization in his motion filed in favor of the resolution, Rep. Francis S. Nyumalin (Lofa County District #1) proffered an amendment to his (Massaquoi) motion calling on the Executive to follow the salary structures of fiscal year 2018/2019.
But Rep. Massaquoi stated that there was no need for such amendment because the Executive did not mention salary harmonization in the communication and that the House considers the measure as illegal and that it was unthinkable for the Executive to follow such measure.
Rep Nyumalin in his amendment stated: “Considering the fact that this exercise is intended to keep the government running, particularly the cogent part of what will be appropriated will go to salary, I will be ready to vote Mr. Movant if you will emphasize that the Minister of Finance will ensure that the one-twelfth coming out of the previous budget as by the resolution that the existing payroll should take preeminence over what has not been executed by the Legislature. In other words, the harmonized payroll that is in process should not be used within this one-twelfth.”
But Rep Massaquoi responded: “Mr. Speaker, if the amendment, as proffered by Rep. Nyumalin is that spending should capture salary and recurrence cost which was significantly in my motion, the issue of the harmonization in my opinion have not authorized by us. So, I do not expect it to be the subject of my motion. My motion was that whatever is given should cover recurrence cost.”
With these exchanges, it became clear that the House does not support salary harmonization in the extra spending. The motion was passed with 38 votes in favor, one against and four abstained.
The Plenary has then authorized its Chief Clerk to send the resolution to the Senate for concurrence.
If the Senate concurs, the government will begin the expenditure of additional US$47.5 million to pay government’s employees and purchase goods and services pending the approval of the budget.
There has been widespread condemnation of the Ministry of Finance & Development Planning’s decision to introduce the salary harmonization scheme without Legislative approval.
The measure led to the deduction of 9,000 government employees’ salaries. Minister Tweah said those affected by the salary harmonization were overpaid.
Minister Tweah has argued that the measure was necessary to promote equity and reduce the wage bill, which he said is a precondition for the government to get external budgetary support in the tune of US$60 million from its bilateral and multilateral partners including the International Monetary Fund (IMF).