Govt disputes HIPC report

The Ministry of Finance and Economic Planning has said that a SEND Foundation report on the management and disbursement of HIPC funds “is inaccurate and misleading.”

A statement issued by the Ministry described as “false and dangerous”, SEND’s claim that “the expenditure of HIPC funds was not done with the approval of Parliament, contrary to the relevant provisions of the Constitution.”

We publish, below, unedited, the statement, signed by the Ministry’s Head of Communication, Mr Kwaku Kwarteng. “THE SEND REPORT IS FLAWED”

The Ministry of Finance & Economic Planning has taken note of a report prepared by the SEND Foundation on the management and disbursement of HIPC funds. The conclusion in the report that the management and allocation of HIPC funds have not followed due procedure is inaccurate and misleading. In particular, the claim that ‘The expenditure of HIPC funds was not done with the approval of Parliament contrary to the relevant provisions of the constitution” is both false and dangerous.

Ghana took the decision to access the HIPC Initiative in March 2001. From the outset, the yearly savings from the Initiative and their intended allocations have been declared in the national budget statements for debate by Parliament and subsequent Parliament approval.

We refer to paragraphs 513 and 526 of the 2002 Budget Statement, paragraphs 503 to 525 of the 2003 Budget Statement, paragraphs 718 to 741 of the 2004 Budget Statement, paragraphs 916 to 934 of the 2005 Budget Statement and paragraphs 1061 to 1079 of 2006 Budget Statement.

These paragraphs also contain accounts of how the funds were disbursed in the preceding financial year. The entire contents of these budget statements were duly debated by Parliament and given parliamentary approval in accordance with the constitution. The suggestion that the expenditure of HIPC funds did not get the approval of Parliament is therefore irresponsible.

The Growth and Poverty Reduction Strategy (GPRS) provides the policy framework within which reliefs flowing from the Initiative are allocated. Each year, Cabinet considers submitted project proposals and gives approvals. The proposals are made by the District, Municipal and Metropolitan Assemblies, and also, government Ministries, Departments and Agencies. The coordination of the applications is done by the ministry of Local Government and Rural Development.

The Ministry of Finance and Economic Planning, guided by the Cabinet approvals, authorises the Controllers and Accountant General to make disbursement for the approved programmes and projects.

The application of HIPC funds to HIPC designated projects is done in harmony with the allocation of resources to other growth and poverty reduction programmes. And these happen within the overall management of resources from other sources. The discussion of HIPC funds as though it were the only and stand-alone resource intended for the total achievement of the country’s poverty reduction objective is unhelpful.

Monitoring and auditing of HIPC expenditures have been taken seriously. HIPC disbursements are captured separately and alongside other discretionary expenditures under the National Expenditure Tracking Systems (NETS). But this system, the Controller & Accountant General’s Department assigns codes that facilitate classification of all expenditures. These are reported in monthly and annual reports on financial statements on the Consolidated Fund.

Additionally, government has allocated resources to civil society groups to help build their capacity for carrying out independent monitoring of the management of HIPC funds.

While the public is advised to take interest in the managements of all public funds, the public is also cautioned that misleading and inaccurate commentaries on the management of HIPC funds could undermine the programme and deny the country of further benefits.”