Govt will regularise lotto funds spending -President By Gitanjali Singh Stabroek News October 14, 2000 In deference to Auditor General, Anand Goolsarran, President Bharrat Jagdeo said yesterday, government's use of its share of the lotto funds would be regularised. He said this was in spite of the fact that the Government Lotteries Act of 1963 sanctioned the government's use of its share of the lotto proceeds. Goolsarran had argued that the Financial Administration and Audit (FAA) Act, superseded the Lotteries Act of 1963 and mandated that all public revenues be paid into the Consolidated Fund and expenditure from lottery proceeds be appropriated through Parliament. In his report to Parliament this year, he said government spending from the account without parliamentary appropriation was illegal as was the retention of the government licence fees in the Government Lottery Fund. The President, noting his finance bias, agreed that the FAA superseded any other law in the absence of anything to the contrary but pointed out that the contract with Canadian Bank Note (CBN) to run the national lottery on behalf of the government cited the Lotteries Act (Chapter 80:07) as governing its operations. However, only selective parts of that Act would apply to the Guyana Lottery Company's operation as it was not a government owned and managed operation and the firm could not call on the Consolidated Fund to make good any deficit if necessary, as the Act provided. Rather, should there ever be a deficit, the government would more likely pull the licence of CBN, the President indicated. "I respect the Auditor General's office tremendously and I do not have a problem with using the Financial Administration and Audit Act to govern the lotteries provision[ing]... but we were operating under this act [the Government Lotteries Act] and we have done nothing illegal," the President told reporters yesterday. He said the government was willing to pay sums into the Consolidated Fund and have the expenditure voted through supplementary provisions. He also said he wanted every cent of the money spent from the government's share of the lottery proceeds (24% of gross revenues per month, representing the licence fee) audited by the Auditor General's office. But Jagdeo was also worried over the spending of lotto funds being made into a big political issue. He said he was convinced that it was not really the method of use of the funds that was of concern to some but his Youth Choice Initiative which was funded by the government's share of the lotto proceeds. Rhetorically asking himself why the initiative was only now being implemented, Jagdeo pointed out that he had only been President for 15 months. He said his detractors were worried about the political impact of the project. He noted that projects funded by the lotto proceeds such as the Dental Clinic were not criticised. He opined that the Public Accounts Committee--which recommended an immediate halt to the government's practice of spending the lotto funds without parliamentary approval and keeping the resources outside the Consolidated Fund--was not familiar with the lotteries act. He noted that a Lotteries Commission usually ensured the safekeeping of the government's proceeds and Cabinet would approve expenditure from the proceeds. As to the need for an integrated approach to planning as it related to the Youth Choice Initiative, the President indicated he is not averse to any suggestions to make the initiative better. Permanent Secretary in the Ministry of Health, Doorga Persaud, had already made such suggestions. In a letter to Ministerial Adviser on Empowerment, Odinga Lumumba, Persaud advised against the mixing of lotto monies in an account for sick children at the ministry with monies for the President Youth Choice Project. He said it would be "highly inappropriate and irregular" to do so. Instead, he advised Lumumba to set up a special unit to coordinate and implement the youth conferences/projects. He said a coordinator needed to be hired, supported by an administrative officer/accountant and at least one accounts clerk, a confidential secretary, a driver and an office assistant. There should also be two qualified project officers who would report to the coordinator. Persaud further suggested that this unit have a steering committee comprising representatives from the Ministry of Finance, the Office of the President, the Ministry of Culture, Youth and Sports, the Ministry of Local Government, the National Lotteries Commission and relevant interest groups. The coordinator of the unit should report to the steering committee. This unit, Persaud said, could establish a special account for funds for the youth initiative and the coordinator, administrative officer/accountant and a member of the steering committee, who should preferably be a representative of the Ministry of Finance or the National Lotteries Commission should be signatories to the account. "A proper accounting system should be established and appropriate books and records should be kept for scrutiny and auditing," Persaud advised. Persaud told Lumumba that his ministry was prepared to turn over all the records pertaining to $11 million already spent from the lotto account for the sick children for the youth conferences but insisted that his ministry was not accountable for the funds spent on the Presidential Youth Conferences, but rather, Lumumba was. Jagdeo said yesterday that all employees of the government were required to comply with the government's financial regulations and he also stressed that no one ought to be disrespectful to Goolsarran. Another section of the media said that Lumumba accused Goolsarran of misrepresenting the law and Jagdeo asked Lumumba to apologise to Goolsarran and this was done in writing. However, other sections of the media said Lumumba was misquoted. To date the government has received close to $1.4 billion as its share of the lottery proceeds. In 1993/4, the late President Cheddi Jagan invited interest in setting up a national lottery in Guyana as a means of raising funds for social projects. CBN won the tender and was awarded a ten-year licence to run the national lottery in Guyana on behalf of the government. CBN gets 12% of the gross revenues, the government 24% (licence fees), prizes 48%, advertising two percent, administrative cost six percent and commissions eight percent. Follow the goings-on in Guyana in Guyana Today