Procuring Entities Cannot Spend Funds That Have Not Been Appropriated

The Ministry of Finance and Public Service is reminding procuring entities that they cannot spend funds that have not been appropriated to them, even in times of emergency.

In a recent interview with JIS News, Chief Public Procurement Policy Officer at the Ministry, Jovell Barrett, said that the public procurement rules are clear – “they don’t have the money, they don’t have it to spend.”

He emphasised that the responsibility for ensuring compliance rests squarely with the head of each entity.

“In an emergency, each head of entity is the responsible and accountable officer for the spend of public funds. It is the responsibility of each head of entity to ensure that they are adhering to the fiscal rules and that they are not spending funds that have not been appropriated to them,” he said.

Mr. Barrett underscored that the fiscal responsibility framework continues to govern procurement activities, regardless of the circumstances.

“There are restrictions in terms of how you can spend, what you can spend. You don’t spend what has not been appropriated to you,” he added.

Mr. Barrett explained that each year, entities prepare detailed budgets outlining their procurement plans for the fiscal period, which are then submitted to Parliament for approval.

While some flexibility exists within approved allocations, he noted that the rules governing reallocations are clear.

“Now, the fiscal rules, as they are now, does allow for some reallocation for some items, some line items in the budget. However, the rules prevent you from making reallocations to other line items, including line items relating to compensation of employees,” Mr. Barrett explained.

He pointed out that limited adjustments may be made within certain categories, such as the ‘use of goods and services’ line item, where circumstances demand.

“You may have planned to do this particular activity, but because of the emergency, you need the funds to respond. And so, you may be allowed to reallocate those funds from that activity to respond to the emergency that you now have,” he said.

However, he emphasised that entities cannot exceed their overall approved budgets.

“If you don’t have the funds in terms of the total budget for an activity, you cannot spend it. If you don’t have the money in the budget, you cannot do a procurement activity,” Mr. Barrett said.

He advised that where an urgent response is required and funds are unavailable within the approved allocation, the appropriate approval must first be secured from the Financial Secretary to undertake that procurement.