Government Spending Review Reveals Shortfall in Capital Grants and Questionable Expenditure

A recent review of government spending in 2020 has highlighted a significant shortfall in capital grants, as well as questionable expenditure from the Contingency Fund. The National Audit Office report provides insight into the government’s financial management and accountability.

Capital Grant Shortfall

The review reveals that capital grant revenue fell short by $16 million, with four ministries not receiving budgeted funds and four others receiving significantly less than expected. Capital grants were estimated to be $25 million for nine ministries, but actual collection only amounted to $9 million.

Notable Variations

• Four ministries did not receive the funds they had been budgeted for.
• Four other ministries received significantly less than expected.

Contingency Fund Concerns

The Contingency Fund was used to finance various expenses, including COVID-19-related costs and election expenses. However, the audit report suggests that some of these expenses may not have been properly justified or budgeted for.

Notable Expenditures

• The largest expenditure from the Contingency Fund was $8.3 million on COVID-19-related costs by the Ministry of Health.
• Election expenses and expenditure on the Alternative Lifestyle Pathway Fund held at the Development Bank of St. Kitts and Nevis were identified as areas of concern.

Recommendations

The National Audit Office has made several recommendations to improve government financial management and accountability, including:

Establishing Clear Criteria for Contingency Fund Expenditure

• The Ministry of Finance should establish clear criteria for expenditure from the Contingency Fund to ensure that it is used only for urgent and unforeseen expenses.

Improving Financial Management and Accountability

• The Government should improve its financial management and accountability by creating a policy document outlining criteria for expenditure from the Contingency Fund.
• Ensuring that spending is properly justified and monitored is crucial to maintaining transparency and accountability in government financial management.

Key Findings

• Capital grant revenue fell short by $16 million, with four ministries not receiving budgeted funds and four others receiving significantly less.
• The Contingency Fund was used to finance various expenses, including COVID-19-related costs, but some expenditures may not have been properly justified or budgeted for.
• Five ministries exceeded their original budget figures by over $1 million each.
• Election expenses and expenditure on the Alternative Lifestyle Pathway Fund were identified as areas of concern.