Government in 2004 recorded a deficit, borrowed excessively, had a high loan rate to finance operating expenditures, and funded deficits through treasury bills according to the latest findings of the Public Accounts Committee.
After scrutinizing the Auditor General’s report on Government Accounts & Finances for 2004, the Committee notes that the revised deficit was forecast at $371.4M, however the actual deficit was 18 percent less than the revised forecast.
The Committee said the government had borrowed over that amount by $155.5M and had also taken out short term loans through treasury bills totaling $12M.
According to the Committee report, the excessive borrowings reflected poor cash management on the part of government and emphasized the stark reality of weak revenue base, forcing government to rely heavily on its financiers for its day to day operations.
The Accounts Committee said the use of loans for operating expenditures continued to escalate and in 2004 over 55 percent of the total loans were to fund government's operating expenditures.
The Committee further states that funds that should have been used for capital works were diverted.
The Public Accounts Committee also found that 48 percent of the total loans were raised through treasury bills alone.
The report states that despite the $585M loan to cover the deficit of $303 million in 2004, the government still found it necessary to take out excessive loans in the form of treasury bills totaling $12M.
The Committee said it discovered that borrowing through treasury bills in 2004 was to cover the shortfall in revenue collections.
