Tuesday, February 21, 2017

Mr Owino is right; they're priority payments

I have written about the Consolidated Fund and Consolidated Fund Services. I argued,
Consolidated Fund Services...is an accounting term relied on by the National Treasury to make the payments required to be made as charges on the Consolidated Fund...Consolidated Fund Services encompasses all the payments that are a charge on the Consolidated Fund, that must be paid and are ordinarily not subject to the appropriations processes of the National Assembly.
Subsequently, Kwame Owino and I had a twitter argument on whether these charges on the Consolidated Fund are priority payments or protected payments. Mr Owino argues that they are priority payments, while I argue that they are protected.

This is what the Constitution provides in Article 221(6) and (7):
(6) When the estimates of national government expenditure, and the estimates of expenditure for the Judiciary and Parliament have been approved by the National Assembly, they shall be included in an Appropriation Bill, which shall be introduced into the National Assembly to authorise, and for the appropriation of that money for the purposes mentioned in the Bill.
(7) The Appropriation Bill mentioned in clause (6) shall not include expenditures that are charged on the Consolidated Fund by this Constitution or an Act of Parliament.
The purpose of an Appropriations Act is to authorise the withdrawal from the Consolidated Fund of the money needed for [the] expenditure but because charges on the Consolidated Fund are not subject to the approval of the National Assembly, they are not included in the Appropriations Bill. However, because they are part of the estimates of national government expenditure, they must be must be approved by the National Assembly.

I admit I am more confused now than when Mr Owino and I argued yesterday, and I think that in the absence of a clear interpretation of Article 221, Mr Owino is probably right about the prioitisation of payments that are charges on the Consolidated Fund. I say so because there are two stages in the appropriations process: approval of the estimates by the National Assembly and the introduction of an Appropriations Bill in the National Assembly. The approval of these charges fit into the first part; their payment is not subject to the Appropriations Bill.

Non-discretionary payments, the term Mr Owino and I agree describes these charges, because they are not subject to the passage of an Appropriations Bill by the National Assembly, may be paid as soon as the National Assembly approves their estimates. It isn't an explicit rule but it is a logical one. The National Treasury has made it a convention to pay them out first, thereby prioritising them.

Mr Owino, I will no longer quibble over whether the protected charges are also priority charges. You were right and I was not.

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