Slush Fund for Protecting Ministerial Salaries

Joy MacPhail has caught Finance Minister Gary Collins playing a shell game to the financial benefit of six cabinet ministers including himself. Expenditures that have traditionally been allocated to the Ministry responsible for the spending have instead been allocated to a contingency fund. That allows Ministers who have gone over budget to collect their salary bonus, and it permitted Collins to make the misleading claim that all Ministries were at or under budget for the first time in BC history.

Many private sector offices use petty cash. If stamps are purchased from petty cash, at year end the company's accountant allocates the expenditure to postage, not to petty cash. Petty cash is a convenience for making a payment; it is not a spending category. The same argument applies to the government "contingency vote". Money that is spent from it should be allocated to the Ministry responsible for that spending, and the relevant Minister should take responsibility and take the consequences for that spending.

This year's budget documents report that "The fiscal plan includes a CRF contingencies vote of $170 million in 2003/04 and $200 million in 2004/05 and 2005/06, to help offset unforeseen spending pressures." CRF is the consolidated revenue fund which consists of all the ministries. Page 99 of the 2003 budget documents contains Table 4.3 which shows how $127 million was spent from last year's contingency vote up to February 2003. The problem for the government is that most of that spending cannot be described as an "unforeseen spending pressure". The list includes:

Contingencies allocation:

Advanced Education
grant to University of BC (UBC) Foundation - UBC library --- $10 million

Agriculture, Food and Fisheries
grant for transition of the Okanagan Valley Tree Fruit Authority to the private sector ---$9 million

Children and Family Development
school-based programs --- $31 million

Energy and Mines
offshore oil and gas development --- $2 million

Finance
seismic mitigation grants --- $18 million

Public Safety and Solicitor General
Emergency Program Act - floods --- $15 million

Public Safety and Solicitor General
missing persons investigation --- $16 million

Transportation
Public Transit --- deferred interest and start-up costs $26 million

It is probably true that the $15 million for floods was a legitimate use of contingency funds for "unforeseen spending". The other items should have come out of the Ministry's budgets. The allocation of that spending to any other account must be seen as hiding spending so as to keep Minister's from losing 10% of their salary and from facing the political embarrassment of being over budget.

Table 4.8 in the 2003 budget compares the 2002-03 budget with the revised forecast for each ministry. At least six of the Ministries listed above would be over budget if the spending allocated to the contingency vote were properly allocated to the respective Ministry - that includes the budget for Finance Minister Gary Collins. It will be July or August before the audited versions of the spending for each Ministry are released by the Comptroller General. Until then, the Minister of Finance should not approve the release of bonus cheques for the Ministers responsible for the Ministries listed here.