HomeLocal NewsLatest audit reports reveal shambolic public finance management system

Latest audit reports reveal shambolic public finance management system

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In a commendable effort to address the perennial problem of delayed auditing of government accounts, the Comptroller and Auditor-General (C&AG) recently submitted several audit reports to the House of Assembly.

The reports, which were tabled in the House when it resumed sitting on Tuesday this week, continue to show serious weaknesses in the country’s public finance management system.

This is despite the promulgation of the Public Finance Management Act whose objective is to secure transparency, accountability and sound management of revenues, expenditure, assets and liabilities of government entities.

The main reports that were tabled in the House of Assembly include the C&AG reports for the financial years ended December 31 2009 and December 31 2010 and C&AG reports for State parastatals and enterprises for the years ended December 31 2009 and 2010.

There are also audit reports for ZINARA and two value-for-money audits.

The submission of value-for-money audits should be applauded because these focus on the economy, efficiency and effectiveness in the management of public funds in addition to whether or not funds have been used for intended purposes and proper policies and procedures have been followed. Just like in the 2008 annual audit report, the C&AG could not express an opinion on the 2009 audit.

The main reason she gave for not expressing an opinion in 2008 was the hyper-inflationary environment experienced during that period which rendered transactions meaningless.

This time around, the Auditor-General (AG) cited the constant breakdown in the public finance management system in the government leading to the bulk of the transactions being processed manually.

The AG said her office was unable to ascertain whether or not all transactions processed manually were fully captured in the accounts.

Surely, this is unacceptable in a country no longer experiencing hyper-inflation, and where new legislation to manage public funds has been in place for more than three years now.

The other issues raised by the C&AG are the absence of boards of inquiry in some ministries to investigate loss of assets and inadequate or lack of asset registers.

The C&AG highlighted poor corporate governance as a big problem in most of the parastatals and government agencies.

Just like in ministries, most of the State enterprises did not maintain up-to-date registers for their assets. Lack of detailed and accurate asset registers exposed these assets to abuse and theft. There are examples in the audits reports where some of the assets could not be located.

What was worrying was that the absence of boards of inquiry meant there would be no action taken on those responsible.

This will only serve to perpetuate the mismanagement. It will not be surprising to discover that future audit reports will still highlight the same problems experienced over the years.

For example, a significant number of financial statements from ministries, government entities and statutory funds have not been audited for many years due to either late submission or non-submission of these reports.

Late submission or non-submission of reports for audit is due to reasons such as lack of skills and technical capacity in the ministries, inadequate supervision, poor work ethics and attempts to hide cases of occupational fraud and abuse, waste and incompetence.

Whatever the reason, the end result is poor or complete lack of accountability and transparency to Parliament and the public by those who are tasked to account.

This is a serious offence given that these funds are funded from taxpayers’ money. What is most worrying is the number of years that these funds have been failing to account with no sanction imposed on the culprits.

It is therefore important that public finance management system and audit processes do not allow such trends of late submission and or non-submission of reports for audit to go unsanctioned.

Heavy penalties must be legislated and applied on all who are supposed to account, but fail to do so.

What I also find very disturbing in this country is the deafening silence from the Zimbabwean public, which is tantamount to condoning abuse of public funds and assets.

Where are all those civil society groups and associations which purport to represent public interests?

I thought the mismanagement of public funds was an issue of major public interest!

And why is Parliament not making continued noise on these issues? If this was to happen in countries with strong public accountability systems, certainly heads would have rolled.

While we are aware that the Public Accounts Committee (PAC) is the one mandated with scrutinising audit reports by the C&AG and reporting to Parliament, other members of Parliament must support the work of the PAC by coming up with questions for Question Time and introducing motions for debate. In its last report on the Central Mechanical and Equipment Department (CMED), the committee noted with concern that there were “serious role, viability and internal governance issues at the CMED”.

The PAC went on to recommend an organisational capacity assessment of CMED.

Areas to be covered by this assessment include board performance, policies and procedures for all departments, the overall governance structure covering procurement, human resources and internal audit, among others.

This is an excellent recommendation which has to be followed up to ensure implementation. The problem is that committees come up with findings and make pertinent recommendations that are not taken on board.

Without following up on recommendations, the PAC is rendered a toothless bull dog.

Now that we have many reports tabled in Parliament by the C&AG, the PAC has a responsibility to analyse these reports and reach out to as many civil groups and interested stakeholders as possible, in order for the public to have a say in how their money has been utilised.

Hearings by the PAC will assist in building an accountable governance system. Parliament must insist on action being taken on those who continue to mismanage and steal public funds and assets.

Above all, Parliament must demand enforcement of statutes governing public finance management in order to address these recurring problems.

John Makamure is the executive director of the Southern African Parliamentary Support Trust writing in his personal capacity.
Feedback: john.makamure@gmail.com

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