Dionne Rose, Staff Reporter
HYLTON
THE MINISTRY of Finance will now have to submit to Parliament all Letters of Undertaking and Comfort Letters for public entities that are not intended to be paid directly from the Consolidated Fund.
Before Letters of Undertaking and Comfort Letters came to the attention of the public via the Public Accounts Committee (PAC), earlier this year, Solicitor-General Michael Hylton had said prior approval of the House would not be required for guarantees, undertakings and other arrangements issued for public bodies.
NEW DIRECTIVE
But during yesterday's PAC meeting at Gordon House, new Financial Secretary, Colin Bullock, told PAC members the Solicitor-General had issued a new directive overruling his prior advice to the Finance Ministry.
"In the course of my tenure, which started in May, we are now acting on the advice from the Solicitor-General and I think it is also the clear perspective of the Auditor-General that such letters really require Parliamentary approval," he said.
"So, we have been operating on that basis, but again I will seek to find out whether any such letters have been issued earlier in the financial year," said Mr. Bullock in answering questions from PAC Chairman, Audley Shaw.
Letters of Undertaking and Comfort Letters became public in March when Robert Martin, deputy financial secretary at the Finance Ministry admitted that the Ministry was breaking the Financial Administration and Audit Act (FAA) for the past 13 years by issuing without the approval of Parliament.
Subsequent to this revelation, Minister of Finance and Planning, Dr. Omar Davies in a statement said that the ministry obtained an opinion from the Attorney-General's office in July 2001, which stated, that Section 43 of the FAA are not applicable to guarantees, undertakings and other such arrangements that are not intended to be paid directly from the Consolidated Fund.
"In these cases, the Government is free to conclude and will be legally bound by such arrangements without the need for parliamentary approval," he said in a statement.
The Auditor-General had expressed concerns that, in certain instances, the language used in these documents had increasingly approached that in the Letters of Guarantee, which by law have to get the approval of Parliament.
Reacting to this new advice, concurring with his concerns, Auditor-General expressed satisfaction on this new development.
"...It was always my understanding that was required when I look at the law and, therefore, I am relieved to know that this is now coming out of the Solicitor-General's office," he said.
"In essence, the Ministry has said that it intends and has, since the matter was raised earlier this year, been complying with this requirement. To me, that is the only action that they need to take...," he said.
