Parliament can’t abdicate or alienate its power

- Petitioner, Nihal Sri Ameresekere

Excerpts from the Appropriation Bill Challenge Petition filed by Chartered Accountant & Management Consultant, Nihal Sri Ameresekere, a person in the fore- front of public interest activity, are re-produced in the public interest, for the public to be made aware of some of the contentious matters put in issue by Ameresekere in his Petition to the Supreme Court.
Articles 148 and 149 of the Constitution stipulate that: “Parliament shall have full control over public finance” and “The funds of the Republic not allocated by law to specific purposes shall form one Consolidated Fund, into which shall be paid the produce of all taxes, imposts, rates and duties and all other revenues and receipts of the Republic not allocated to specific purposes”.

Therefore funds have to be allocated for ‘specific purposes’. The Constitution mandates that withdrawals from the Consolidated Fund shall only be by the Minister of Finance, and that too, only after approval has been given by Parliament for ‘specified public services’; as per Article 150 (2) –“No such warrant shall be issued unless the sum has by resolution of Parliament or by any law being granted for specified public services for the financial year during which the withdrawal is to take place or is otherwise lawfully charged on the Consolidated Fund.”

The main contentious Clause 6 of the Appropriation Bill, which is being challenged is, “ Any money allocated to Recurrent Expenditure or Capital Expenditure under the “Development Activities” programme appearing under the Head, “Department of National Budget” specified in the First Schedule, may be transferred to any other programme under any other head in that Schedule, by Order of the Secretary to the Treasury or any other officer authorised by him. The money so transferred, shall be deemed to have been covered by a supplementary estimate submitted by the appropriate Minister.”

Inherently, it is implied that funds allocated for Recurrent or Capital Expenditure under the “Development Activities” Programme, are readily ‘available to be transferred’, thereby raising the question as to whether such funds are allocated for any, ‘specified public services’ or any ‘specific public purpose’, as mandated in Articles 150(2) and 149(1) of the Constitution, or if not, as to whether such allocations are mere ‘provisionings’ of funds, in sheer violation of the dictates of the Constitution. Impliedly, allocations for “Development Activities”

Programme, under the Head “Department of National Budget”, appear to be mere ‘provisionings’, with the ‘specified public services’ and/or ‘specific public purposes’ not being specified, as mandated by the Constitution. Such Section had been included in the Appropriation Act, only from the Financial Year 2004.

Detail Budget estimates for Financial Year 2006 for ‘Department of National Budget’ was Rs. 23.2 billion. As per Appropriation Act No. 39 of 2005 , the Budget for Financial Year 2006 for ‘Department of National Budget’ was Rs. 62.2 billion. At the Committee Stage the Budget for ‘Department of National Budget’ was increased by Rs. 39.6 billion to a total of Rs. 78 billion. However as per the Financial Statements for the Year Ended 31.12.2006, the total Expenditure incurred for ‘Department of National Budget’ had been only Rs. 4.6 billion.

Clause 5 of the Appropriation Bill reads: - “5. (1) Any moneys which by virtue of the provisions of the First Schedule to this Act, have been allocated to Recurrent Expenditure under any Programme appearing under any Head specified in that Schedule, but have not been expended or are not likely to be expended, may be transferred to the allocation of Capital Expenditure within that Programme or to the allocation of Recurrent Expenditure or Capital Expenditure under any other Programme within that Head, by Order of the Secretary to the Treasury or any other officer authorised by him - (2) No moneys allocated to Capital Expenditure under any Programme appearing under any Head specified in the First Schedule to this Act, shall be transferred out of that Programme or to any allocation of Recurrent Expenditure of that Programme.”
Clause 5 historically providing for approval for transfer of unutilised ‘Recurrent Expenditure’ is an old inherited British practice, then referred to as a ‘virement’, which means ‘the transfer of items from one financial account to another’. At that time of the British, it was under the strict enforcement of financial accountability by the Englishmen, where civil servants were severely dealt with, unlike the current era of financial chicanery !

The Constitution has provided for a Contingencies Fund for urgent and unforeseen expenditure, subject to covering approval by Parliament for replacement of such expenditure, “if the Minister in charge of the subject of Finance, is satisfied - a) that there is need for any such expenditure, and b) that no provision for such expenditure exists, may, with the consent of the President, authorize provision to be made thereof by an advance from the Contingencies Fund” vide Article 151 (1), and Article 151 (3) stipulates – “As soon as possible after every such advance, a Supplementary Estimate shall be presented to Parliament for the purpose of replacing the amount so advanced.” When the President is also the Minister of Finance, then one and the same person, would be acting in terms of Article 151 (2) of the Constitution

The former Auditor General S.C. Mayadunne, present Director of the Office of the Committee on Public Accounts and Committee on Public Enterprises has forwarded a Report recently titled “Proposals for Strengthening of Parliamentary Control over Public Finance”, and inter-alia has stated – “The revision of the Budget approved by the Parliament for the year 2006 by Rs. 220.2 billion at the discretion of the Officers, as explained in detail in (2) Paragraph of Part II of this report can be cited as an example. The revision of the budget by Rs.220.2 billion at the discretion of the officers in terms of provisions in Section 5 of the Appropriation Act, No. 39 of 2005 including Rs.166 billion in terms of authority granted under Section 6 of the said Act raises the question whether it tantamount to a partial abdication of the powers of full control over the Public Finance vested in the Parliament by Article 148 - As compared with Rs.609 billion originally approved for expenditure for the year 2006 and Rs.1,072.8 billion stated as the actual expenditure, that sum of Rs.220.2 billion represents a very high percentage”.
“This becomes more serious as this form of version left to the discretion of the Officers has been arranged in such manner, it does not need the approval or sanction of the Parliament as well as that of the Cabinet of Ministries or even the Minister. In addition to such revisions made to the provisions at the full discretion of the officers, instances of non-implementation of Budgets approved by Parliament properly abound as follows – i) Savings of approved provisions due to non-release of funds for Budget implementation – ii) Savings of approved provisions due to various other reasons – iii) Irregular excess spending over the provisions – iv) Discretionary expenditure within the approved provision contrary to estimates – v) Non-achievement of expected Performance despite expenditure incurred.”

Clauses 5 and 6 have given authority for varying specified authorised limits to the Secretary to the Treasury, including transfers from one specified authorised limit to a another, without any Order of the Minister of Finance and/or without Parliamentary approval for exceeding specified authorised limits, and ‘deeming’ that money so transferred to have been covered by ‘Supplementary Estimates’ submitted by the Minister of Finance for Parliamentary approval, which is also ‘impliedly deemed’. Transfer to an ‘authorised and approved limit’, would be an ‘increase’ in the allocation approved by Parliament for that limit, and such ‘increase’ would require approval by Parliament.

Ameresekere in his Petition has prayed for the following determinations from the Supreme Court: determine that in terms of Article 148 and Article 152 of the Constitution, the full control over public finance shall be exercised only by Parliament, except under and in terms of Articles 150(3) and 150(4) of the Constitution: determine that Parliament is debarred from abdicating and / or alienating and/or transferring its Constitutional duty to exercise full control over public finance, in terms of Article 148 and Article 152, read with Article 76(1) of the Constitution:
determine that Parliament could approve the withdrawal of public funds from the Consolidated Fund only for specified public services and/or for specific public purposes, in terms of Articles 150(2), 149(1) and 151(3) of the Constitution: determine that Parliament is debarred from approving the withdrawal of public funds from the Consolidated Fund, where the public service and/or the specific public purpose is not specified, in terms of Articles 150(2), 149(1) and 151(3) of the Constitution :

determine that any urgent and/or unforeseen expenditure for any specified public service or specific public purpose approved by Parliament, in respect of any Head and/or Programme in the Appropriation Bill could only be made from the Contingencies Fund and replaced thereafter by a Supplementary Estimate approved by Parliament in terms of Article 151 of the Constitution: determine that any excess expenditure, over and above the authorised limit for any specified public service or specific public purpose approved by Parliament, could only be approved by Parliament, as and by way of Supplementary Estimates and/or Amendments to the Appropriation Act, prior to such expenditure being incurred, in terms of Article 150 of the Constitution: determine that the grant of power to the Secretary to the Treasury in terms of Clauses 5 and/or 6 of the Appropriation Bill amounts to the abdication and / or the alienation and/or transfer of the powers of Parliament and such abdication and / or alienation and/or transfer of powers by Parliament is prohibited, in terms of Article 148 and Article 152, read with Article 76(1) of the Constitution:

determine that all funds of the Government not allocated by law to specific purposes shall form one Consolidated Fund in terms of Article 149(1) of the Constitution: determine that the Appropriation Bill should disclose all other funds of the Government and the utilisation thereof, in terms of Article 149(1), read with Articles 148, 150(1), 150(2) and 152 of the Constitution: determine that one or more of the Clauses of the Appropriation Bill is / are inconsistent with the provisions of the Constitution: determine that one or more of the Clauses of the Appropriation Bill require a Special Majority in Parliament and approval by the People at a Referendum under and in terms of the Constitution, for such Clauses to become law: determine that one or more of the Clauses of the Appropriation Bill, could not be legitimately passed by Parliament to become law, in view of the specific prohibitions in the Constitution: determine that public finance cannot be put beyond the reach, supervision, direction and control of Parliament by the Government investing such funds, wholly or partly, in limited liability companies, excluded in the definition of ‘public corporations’ in terms of Article 170 of the Constitution, and that the investment of public funds in any such company, wholly or partly, is prohibited in terms of the Constitution: determine that Clauses of the Appropriation Bill read with the Schedules thereto, are not in conformity with the mandatory requirements of the Fiscal Management (Responsibility) Act No. 3 of 2003.

The Constitution mandates that the President, Cabinet of Ministers and Ministers are responsible to Parliament; - Article 42 - “The President shall be responsible to Parliament for the due exercise, performance and discharge of his powers, duties and functions under the Constitution and any written law, including the law for the time being relating to public security” - Article 43 (1) – “There shall be a Cabinet of Ministers charged with the direction and control of the Government of the Republic, which shall be collectively responsible and answerable to Parliament” - Article 45 (3) “Every Minister appointed under this Article shall be responsible and answerable to the Cabinet of Ministers and to Parliament.” The Constitution mandates that Parliament cannot abdicate or alienate its legislative power - Article 76 (1) – “Parliament shall not abdicate or in any manner alienate its legislative power, and shall not set up any authority with any legislative power.”