The raging battle for the control of multi-million government special funds has taken a new twist with the Gambling Authority seeking legal opinions against the government in a fight for access to a multi-million-Pula levy fund, The Telegraph has established.
The battle for the Gambling levy funds which reportedly stands at P28 million comes at the time when Cabinet has taken a decision to strengthen the financial management of Special Funds in the wake of the National Petroleum Fund (NPF) corruption claims.
Documents passed to the The Telegraph show that in its long running battle with the Ministry of Investment, Trade and Industry, the Gambling Authority sought legal opinions from Collins Chilisa Consultants and Armstrongs Attorneys.
The Authority intends to defend its refusal to turn over the money accrued from the levy to the Ministry of Finance.
Minister of Finance and Economic Development, Kenneth Matambo recently told Parliament that the special funds would now be managed as part of the government cash balances held at the Bank of Botswana.
He explained that the use of the funds would be closely monitored to ensure compliance with both the Public Finance Management Act and the Fund Orders.
“The case of the National Petroleum Fund has emphasised the need for an urgent review of government Special Funds and improvement in their management,” Matambo informed the just ended session of Parliament.
According to the documents passed to The Telegraph, “there is a difference of opinion between the Ministry of Investment, Trade and Industry and the Gambling Authority in respect of which entity is charged with the responsibility of managing, controlling and administering the fund.”
The documents also show that the Ministry takes the view that it is the Minister responsible for Finance and Development Planning who is burdened with the duty of managing, controlling and administering the fund.
The Ministry of Trade and Industry premises its position on the provisions of sections 27, 37 and 38 of the Public Finance Management Act.
Section 37 states that “any fund of public revenues established by or under any written law for some specific purpose: any trust fund held by the Government and any fund created by the Minister in exercise of the powers conferred upon him or her by section, shall subject to the provision of subsection (2) be deemed to be a special fund.
The Gambling Authority on the hand takes the view that it is the Authority that manages and administers the levy.
In their legal opinion, Collins Chilisa Consultants found that the Levy Fund is a special fund.
“Having regard to the definition of a Special Fund, there is no doubt whatsoever that the Levy Fund is a Special Fund. It is fund of public revenue…” the attorney stated.
They also stated that “the obligation for the levy payments received requires that the Gambling Authority keep a record and control of financial expenditure of the Levy Fund. The duty to account presupposes that the Gambling Authority has administrative control over the Levy Fund.”
According to the lawyers, “On a consideration objectives of the Act, the purpose of the Levy Fund and the responsibilities of the Disbursement Agency there is no doubt that the Gambling Authority is the entity that is charged with the responsibility of administering the Levy Fund.”
The lawyers also found that “The administration of the Levy Fund by the Gambling Authority is not inconsistent with the Public Finance Management Act (PFMA) which requires in section 40(1) that a Special Fund should be administered in a manner provided for in written law.”
They argued that the Gambling Authority is a written law which provides, albeit in broad terms, for the manner in which the Levy Fund shall be administered.
“The Gambling Act implicitly places the custody and control of the Levy Fund under the Gambling Authority, by requiring that it collects the levies and that it must account for them. It therefore requires that the Levy Fund be kept by the Gambling Authority,” they further argued.
For their part, Armstrong Attorneys found that “It is abundantly clear that the purpose of the Agency is, amongst others, to disburse and account for funds that a received by the Authority.
“It is the role of the Gambling Authority (as per the Act to oversee the gambling industry in Botswana). It is for this purpose, amongst others, that the Agency has as one of its functions, to disburse the funds,” reads the document from Armstrongs Attorneys.
They further stated that “We must once more, highlight that the fund sought to be established, is not a fund that stands to be established under the provisions of the Public Finance Management Act, but rather the Gambling Authority.”
It would be amiss of the Minister, the lawyers stated, to seek to exercise powers under the Public Finance Management Act (with respect to the establishment of a Fund) whereas the Gambling Authority Act is specific as to the Act which the Minister would be establishing a Fund.
“The control of the fund would lie with the Authority and that it is the role of the Minister to establish the Fund in order to enable the Authority to give effect to its statutory mandate,” the lawyers concluded.
Responding to The Telegraph queries, Gambling Authority’s Chief Executive Officer Thuli Johnson would not share the amount of money at the centre of dispute.
“…we can confirm that we have obtained legal advice with respect to the establishment of levy funds. In this instance, we needed guidance/opinions with regard to the Gambling Levy Funds,” said Johnson.
He added that “However, we are not able to disclose the details of the opinions as these are still to be discussed internally and indeed with our Parent Ministry as appropriate. At the appropriate time and in due course we will communicate these and other updates.”
“The interpretation of statutes is a discussion that we will have, and differences may arise with various of our stakeholders including with licensees and other stakeholders,” he said.
He further stated that “In that instance, it is prudent that each of us consult widely and debate the issues so that we reach an acceptable decision that is in the public interest and in the interests of the mandates given each of us. In that regard, we would never describe that normal discussion as “having differences” as that scenario is far from the reality.” But this is in sharp contrast to one of the private law firms engaged to offer legal opinion which found that “there is a difference of opinion between the Ministry of Investment, Trade and Industry and the Gambling Authority.”