Subject: Letter from Minister of Finance to PM Gusmao
TRANSLATION TRANSCRIPTS OF LETTERS FROM MINISTER OF FINANCE regarding:
Treasury Accounts (more specifically Missing Justification of Expenses for Advances Made in Favour of Some Ministries and Secretariats of State)
Ref.as: Letter from Minister for Finance addressed to: Xanana Gusmao (of 9 January 2009)
Issue: "Reform of outstanding advancements"
Summary: Advances made by Ministry of Finance "to all Ministries":
i. disbursed from "Recurrent Fund" and "normally used to respond to administrative demands of each Ministry";
ii. Advances in anticipation of being "transferred to district entities" to "respond to administrative demands";
iii. Advances made, at times ex post facto, without there being any justification having been presented for the expenses for which there were prior advances;
iv. The National Treasury Directorate "wrote to all Ministries on 9 October requesting all to present their justifications for expenses for which they received advancements made until 25 October" 2008;
v. Until the 9th of January 2008 "the total debt (moneys without justifications of expenditures) for all Ministries is now US$8,830 million;
vi. "It is possible that some Ministries have opened bank accounts in order to retain the moneys securely. Opening of such a bank account with any bank is expressly illegal";
vii. "The Minister for Finance has to close its books of accounts at the end of the current fiscal year. All advances have to be accounted for and included in the annual accounts in order to be examined and assessed by the National Parliament. It is not in the interests of the government to present the annual accounts containing such a large amount in debt".
Minister for Finances Letter to the Director General of BNU (Portuguese Bank) on 9 January 2009: Issue: "Closing of the Ministry of Finance's bank Account No. 4136469-10-001"
"You should proceed immediately with the following steps:
i. "Account No. 4136469-10-001 should be immediately closed. The credit balance should be transferred immediately to government account CFET 2-3711. From hereon in public receipts should not be credited to the above mentioned account."
ii. "All public receipts should be exclusively credited to account No. 2007125-10-001 with your bank."
iii. "Credit balances in account No. 2007125-10-001 should be verified in the Government account No. CFET 2-3711 with the banking and Payments Authority for daily closing balances of transactions."