Chief Secretary Farley Augustine. – THA
Chief Secretary Farley Augustine on Sunday said the finance ministry blamed “cash-flow” issues for tardy disbursement of funds to the Tobago House of Assembly (THA)
Augustine, the Secretary of Finance, Trade and the Economy, led a team from the division to meet with Minister of Finance Colm Imbert in Trinidad on December 22.
Questioned about the outcome of the meeting during a special post-Executive Council media briefing held virtually on Sunday, Augustine said Imbert did not deny that the disbursement of funds to the THA was not untimely.
On December 16, Augustine said that he had planned to impress upon Imbert that he and the ministry needed to “follow the law” regarding the issuance of money to the THA. He said the law requires that funds allocated to the Assembly must be disbursed quarterly, but at the moment the funds are disbursed irregularly and often on a monthly basis.
Augustine said Imbert offered an explanation for the irregular disbursement.
“He also indicated that part of the challenge is a cash-flow issue for Trinidad. However, we went on to discussing the fact that this is causing serious cash-flow issues for Tobago, and the fact that the THA now has an enormous overdraft facility that is unsecured and so the interest is extremely high. And so every time we do not receive monies on time or quarterly, it means we have to depend on the overdraft facility, which means we have to pay large sums of interest to the bank and that is large sums of interest that we did not budget to spend.
“In other words, there isn’t a line item in the budget or in any of the previous budgets to treat with that.”
He said the issue of the bond financing was also discussed.
“One of the questions I asked, was the question of what proposal did the THA or the former secretary…give to you concerning how we plan to pay down on the bond financing. It’s not free money, it’s money that has to be paid back for and we have to pay back for very soon.”
Augustine said: “I won’t tell you the answer that he gave. That was interesting, including the justification that was given for the bond financing. However, we had an appreciation for the fact that maybe we need to begin looking at a sinking fund, begin looking at mechanisms to put aside monies to pay for that bond financing and of course we discussed the remaining sums from the bond financing and whether we would like to have that now or later down the road.”
He said the meeting went well in addressing the important issues.
“I can assure you it was a very professional meeting, that as much as the political philosophies of the finance minister and his political party are not what I share or the new administration in the THA share, we had a professional meeting. At the end of the day, sometimes you just have to put aside idiosyncrasies and find ways to work together for the good of the people.”
He said he is looking forward to some significant outcomes from that meeting.