Procurement process blamed for unspent $6.5b in 2022-2023
Published:Wednesday | March 1, 2023 | 1:35 AMErica Virtue/Senior Gleaner Writer
The revelation that some $6.5 billion budgeted for capital projects would not be spent this fiscal year did not sit well with members of the Public Administration and Appropriations Committee (PAAC), which received and approved the fourth supplementary estimates at Tuesday’s sitting of the House of Representatives.
Members criticised the Public Investment Appraisal Branch (PIAB) of Government, formerly the Public Investment Management Secretariat (PIMSEC), which is responsible for pre-investment project appraisals and performs a technical advisory function, for the state of affairs. They blamed the unit for failing to process approvals in a timely manner.
The largest unspent chunk is $1.25 billion by the Ministry of Health & Wellness on programmes for the prevention and care management of non-communicable diseases. The ministry also failed to spend $66.6 million for the national HIV/AIDS response.
The Ministry of Education also failed to spend $625.7 million budgeted for its primary and secondary infrastructure programme and $210 million on the education transformation programme.
PAAC members expressed frustration with the Government’s tedious procurement processes, noting that members of parliament were facing the heat from constituents when capital projects take years to implement.
An unspent $1.3 billion budgeted for the purchase of ships for coastal surveillance for the Ministry of National Security prompted PAAC Chairman Mikael Phillips to ask Financial Secretary Darlene Morrison for an explanation.
“My understanding is that the payment will actually be made in April. The ships are not yet where they expected them to be at this point,” she responded.
Phillips asked whether the delivery timetable had been shifted, but Morrison said she was unsure.
A frustrated Lisa Hanna cited another $1.65 billion, which was unspent from the Ministry of Science, Energy and Technology, of which $789 million was for the energy management and efficiency programme.
“What has happened with the programme? Is it slow implementation or is it discontinued?” Hanna asked the financial secretary.
“It is not discontinued. It is the slow implementation. Implementation of this project has been significantly behind schedule. It is expected to continue in the next fiscal year,” Morrison explained.
“I am going to refer back to a debate we had in the House recently about PIMSEC, about the efficiency of programmes and how it is we programme them for the spending … . There seem to be some gaps in how it is these programmes are added to the Budget and the delay in implementation. My understanding is that PIMSEC was to help to streamline these programmes. Can you tell me if it is working or not, or is it a deliberate delay of the programme? “ Phillips asked.
NOT DELIBERATE
Morrison said there was no deliberate attempt to roll over the funds, but that the funds would not be spent for the time remaining in the financial year as a result of the many issues encountered.
Phillips asked about the more than $600 million which was unspent from the $889 million budgeted for the Ministry of Health (MOH) and the relatively small sum to be spent in a financial year for the Ministry of Education.
“For the Ministry of Education, there were procurement issues ... . They are not as far along as they were scheduled to be and so the funds will not be spent. The project for the MOH is being restructured and that has delayed some of the implementation,” the financial secretary said.
“On the procurement issues we continue to seek to improve how procurement is effected and we are hoping that in the near future, our procurements will go much more smoothly,” Morrison told the PAAC.
It was at this point that PAAC member Tova Hamilton suggested that a review of the procurement process may be needed urgently.
But Morrison defended the process.
“It is not necessarily the guidelines that are contributing to the delay. It is more the execution, how it is being applied, and the procurement rules are, in fact, under review. But, again, it is not really the guidelines, which are, in fact, in line with international standards,” she said.
The response did not ease Hanna’s frustration.
A road in her St Ann South Eastern constituency did not get to procurement after a year as it was dependent on the meetings of the procurement committee of parish councils.
“What can we do to help? Because all of us in here, our hands are tied. We are sitting ducks at this point, and we have capital expenditure projects that are not and cannot be executed,” she said, adding that radical change was needed as the process would choke if all 63 members of parliament go to procurement at the same time.